Back
IN THE HIGH COURT OF CALCUTTA
Aniruddha Bose, J.
M/s. Besco Limited (Foundry Division) and Anr. - Petitioners
Versus
The West Bengal State Electricity Distribution Company Limited and Ors. - Respondents
W.P. No. 17031 (W) of 2013, C.A.N. No. 26, 298 and 12111 of 2014
Decided On : 21.7.2015
ELECTRICITY - CONTRACT DEMAND REDUCTION - FORCE MAJEURE - WEST BENGAL ELECTRICITY REGULATORY COMMISSION (TERMS OF CONDITIONS OF TARIFF) REGULATIONS, 2011, CLAUSE 4.3.6 - CONSTITUTIONALITY - ARTICLE 14 OF THE CONSTITUTION OF INDIA - SECTION 61(d) OF THE ELECTRICITY ACT, 2003 - APPLICABILITY TO CONSUMERS - DISPUTE RESOLUTION - GRIEVANCE REDRESSAL OFFICERS.
Fact of the Case:
The petitioner, a manufacturing unit, sought to reduce its contract demand with the distribution company due to an illegal strike and suspension of work. The distribution company denied receiving the request and raised bills based on the original contract. The petitioner challenged the bills and the vires of Clause 4.3.6 of the West Bengal Electricity Regulatory Commission (Terms of Conditions of Tariff) Regulations, 2011, which allowed the distribution company to rely on Force Majeure events but not the consumers.
Finding of the Court:
1. The petitioner's plea for reduction of contract demand based on supervening impossibility under Section 56 of the Contract Act was rejected as the entire contract did not become impossible to perform. 2. The petitioner's reliance on the principles of Force Majeure was not supported by any Force Majeure clause in the contract. 3. Clause 4.3.6 of the Regulations, which provided for Force Majeure benefits only to the distribution company, was not struck down as discriminatory as the petitioners failed to establish that the classification was irrational or that they were entitled to the same benefit. 4. The factual dispute regarding the receipt of the petitioner's request for load reduction on 12th March 2013 was not resolved due to conflicting evidence and required witness action. 5. The petitioners were directed to approach the Grievance Redressal Officers for adjudication of their dispute, considering the disputed factual issues involved.
Issues: 1. Whether the petitioner could rely on Section 56 of the Contract Act to be exempted from undertaking their part of the obligation under the contract. 2. Whether the petitioner's case could be founded on the principles of Force Majeure in the absence of a Force Majeure clause in the contract. 3. Whether Clause 4.3.6 of the Regulations, which allowed the distribution company to rely on Force Majeure events but not the consumers, was discriminatory and violative of Article 14 of the Constitution of India. 4. Whether the factual dispute regarding the receipt of the petitioner's request for load reduction on 12th March 2013 could be resolved in a writ petition.
Ratio Decidendi: 1. The doctrine of supervening impossibility under Section 56 of the Contract Act is not applicable where the entire contract does not become impossible to perform. 2. The principles of Force Majeure cannot be invoked in the absence of a Force Majeure clause in the contract. 3. A statutory provision cannot be struck down as discriminatory merely because it provides for different treatment of different classes of persons. The classification must be irrational or violative of fundamental rights to be declared unconstitutional. 4. Factual disputes involving witness action are not suitable for determination in writ proceedings.
Final Decision: 1. The petitioner's writ petition challenging the impugned bills and the vires of Clause 4.3.6 of the Regulations was dismissed. 2. The petitioners were directed to approach the Grievance Redressal Officers for adjudication of their dispute regarding the reduction of contract demand.
Aniruddha Bose, J.
1. The dispute in this writ petition is over plea of the petitioners for reduction of contract demand or load in relation to supply of electricity to their manufacturing unit at Baruipur. The petitioners contend that their request for such reduction was not complied with. The petitioner no. 1 is engaged in the business of manufacture of railway wagon components and other engineering items. The first petitioner had entered into an agreement with the West Bengal State Electricity Distribution Company Limited (the distribution company) on 16 January 2010 for supply of high voltage supply of electricity, specifying their contract demand to be 5 500 KVA for the first year and 6500 KVA for the next four years in respect of their production unit of Baruipur, 24 Parganas (South). Clause 17 of this agreement, a copy of which has been Annexure `P1' to the writ petition, stipulates:-
"17 (1) In the event of the Consumer(s) desiring to increase his/its/their contract demand during the continuance of the Agreement, the WBSEDCL may require the Consumer(s) to intimate in the writing stating the quantity of the power required for the next 5 year period of operation whereupon the WBSEDCL shall take steps as per WBERC's Regulation applicable thereof subject to compliance of necessary formalities including those specified herein below by the consumer.
(2) The Consumer(s) shall pay to the WBSEDCL any expense incurred by reason of alteration and/or extension in respect of any Service Line, Switchgear, Meters and other equipment necessitated to meet such altered Contract demand.
(3) The security deposit may be increased to take into account the altered Contract demand.
(4) The request for downward revision of contract demand will be considered as per WBERC's Regulation applicable thereof."
2. It has been submitted on behalf of the petitioners in this case that their workmen had resorted to an illegal strike with effect from 4 March 2013 which ultimately led to declaration of suspension of work with effect from 11 March 2013. Because of this situation, which the petitioners refer to as "Force Majeure" situation, the petitioners allege to have written a letter seeking reduction of contract demand 100 KVA. A copy of this letter dated 12 March 2013 has been annexure `P4' to the writ petition. This letter stipulates:-
"To
The Regional Manager
24 Parganas (South),
Baruipur,
Kolkata - 700 144
Consumer No. C- 11004
Sub : Reduction of contract demand to 100 KVA
Sir,
We would like to inform you that due to gross Industrial unrest, the Management has been forced to declare "Suspension of Work" w.e.f. 10.03.2013 until further Notice. We enclose a copy of Notice dated 10.03.2013 in this respect which is self explanatory.
You are under the circumstances requested to reduce our Contract Demand to 100 KVA for lighting load only till further notice.
Thanking you
Yours faithfully,
For BESCO Limited (Foundry Division)
Mihir Mukherjee
General Manager (Legal & Admn.)
Enclo : as above"
3. Complaint of the petitioners in this proceeding is that this request was not acceded to and the distribution company went on raising bills on the basis of their original contract and demands for payment of charges were raised on the petitioners as per the original contract. In the writ petition, the petitioners have applied for quashing of two bills raised on them by the respondent company dated 7th May 2013 and 31st May 2013, copies of which have been made Annexures "P-9" and "P-16" to the writ petition. The bill dated 7th May 2013 requires payment of L 29,09,457/- which includes demand charge of L 17,47,046/-, whereas payment required to be made as per the bill dated 4th May 2013 is L 27,77,312/-, that includes demand charge for L 17,31,545/-. The petitioners also seek a declaration to the effect that clause 4.3.6 of the Est Bengal Electricity Regulatory Commission (Terms of Conditions of Tariff) Regulations, 2011 is ultra vires the provisions of Article 14 of the Constitution of
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
