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High Court Of Delhi
RAM LAL AGRAWAL AND COMPANY - Appellant
Versus
MUNICIPAL CORPORATION OF DELHI - Respondent
Decided On : 05/01/1998
ARBITRATION - ELECTRICITY TARIFF - DISPUTE - ARBITRABILITY - LOW POWER FACTOR RESULTING IN HIGHER DEMAND CHARGES - NOT REFERABLE TO ARBITRATION - TERMS OF TARIFF CANNOT BE CHALLENGED IN ARBITRATION PROCEEDINGS.
Fact of the Case:
Petitioner, a partnership firm, challenged the electricity bills issued by the respondent, claiming them to be excessive and unreasonable. The petitioner also questioned the method of conversion of KW to KVA, alleging it to be a change in the condition of tariff and supply without the State Government's sanction.
Finding of the Court:
The court held that the impugned bills were based on low power factor, which resulted in higher demand charges. The petitioner could not challenge the terms of the tariff in the arbitration proceedings. The increase in billing demand was also not referable to arbitration. The court further held that the petitioner's grievance with regard to the bills was confined to the increased KVA resulting from low power factor, which was a direct and inevitable result of the meter readings and the application of the tariff terms.
Issues: 1. Whether the dispute regarding the electricity bills, including the increase in billing demand and the method of conversion of KW to KVA, was referable to arbitration. 2. Whether the petitioner could challenge the terms of the tariff in the arbitration proceedings.
Ratio Decidendi: 1. The court held that the dispute regarding the electricity bills was not referable to arbitration as it questioned the terms of the tariff, which was statutory in nature. 2. The court also held that the petitioner could not challenge the terms of the tariff in the arbitration proceedings.
Final Decision: Both the petitions under Section 20 of the Indian Arbitration Act were dismissed as the disputes sought to be raised in substance and reality questioned the terms of the tariff and the same was not referable to arbitration.
( 1 ) BY this common judgment, I would be disposingof two petitions under Section 20 of the Arbitration Act, 1940, bearing Suit Nos. 2182 of 1992 and 2224 of 1992, filed by the petitioner-firm.
( 2 ) THE facts as averred by the petitioner in Suit No. 2182 of 1992 may be briefly noted:
(I) The petitioner is a partnership firm having its factory at A-77, Naraina Industrial Area, Phase-1. The petitioner was sanctioned an electric connection for carrying on its manufacturing business and had been regularly paying the electricity bills asraised. The petitioner in the year 1986 had applied for and was sanctioned extra additional load of 312 H. P. The petitioner deposited the requisite charges for this and the respondent No. 2-DVB provided the extra load. (ii) The petitioner states that all along till the year 1990, it We"- receiving average monthly bills in the range of Rs. 16,000. 00 to Rs. 18,000. 00 , which were paid in due course. However, in the year 1991, the petitioner received bills in the range between Rs. 32,000. 00 to Rs. 35,000. 00 per month. The petitioner claims that there was no change in the nature of its business and the petitioner did not instal any additional machinery or equipment. Accordingly, the petitioner claimed that the aforesaid bills were not correct and were excessive and unreasonable. The petitioner was entitled to refund from the year 1991. The petitioner on 29. 4. 1992, suddenly received the bill for the month of April, 1992 in the sum of Rs. 99,978. 00. In this bill the respondent had without any reason raised the bill demand from 309 KVA, which is the sanctioned load of the petitioner, to 1193 KVA, without any basis. The petitioner claims that the said bill had been raised without any inspection. The petitioner further assails the amount raised by the respondent as being arbitrary and illegal. The petitioner also questions the method of conversion of KW to KVA as amounting to change in the condition of tariff and supply, which cannot be done without the prevision sanction of the State Government. (iii) The petitioner has set out the disputes in paras 12 and 13 of the petition, which are as under: "that the petitioner is entitled to the refund of all the amounts paid by the petitioner for the period of 1st January, 1991 to 30th April, 1992 in excess of Rs. 18,000. 00 which is a normal bill payable by the petitioner and the said bills are excessive the amounts have been claimed without any basis and the bills in excess of this amount are liable to be set aside and quashed. " "that the bill raised by the respondents for the month of April, 1992 is illegal, un-justified and is without any basis and the bill is liable to be set aside and the petitioner is not liable to pay any amount in excess of Rs. 18,000. 00 and odd which was the normal electricity bill payable by the petitioner. "
( 3 ) IN the second petition being Suit No. 2224/92, the petitioner reiterated the same averments as in Suit No. 2182/92 and questioned the increase in KVA demand based on the low power factor. The petitioner specifically challenged the bill received for the month of May, 1992 in the sum of Rs. 86,167. 00 , which had been raised on the basis of billiiig demand at 1094 KVA. The petitioner sought reference of the disputes under Clause 25 of the Arbitration Act to an Arbitrator.
( 4 ) THE respondents have filed the written statement in the two petitions. It is claimed that the petitioner has a sanctioned load of 325 H. P. (IP) + 1okw (CP) for A. C and 10 KW (CP) for A. C x 1. 1807. An objection has been raised to the maintainability of the petition. It is claimed that the bills raised on the petitioner are strictly in accordance with the tariff of the years 1990-91, 1991-92 and 1992-93, wherein the rates have been different for the years in question. The petition is said to be lacking in material particulars inasmuch as the bills are simply questioned as being excessive. It is not the petitioner s case that th
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