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1998 Supreme(Gau) 245
GAUHATI HIGH COURT
N.C.Jain, P.G.Agarwal, JJ.
National Boards Ltd.: Kamrup Paper Mills Ltd.; Federation of Industries; Assam Carbon Products Ltd.; Jayshree Tea and Industries Ltd.and Ors. -Appellant
Versus
Assam State Electricity Board -Respondent
Writ Appeal No. 541 of 1995, 343, 344, 358, 426, 445 and 451 of 1997, 38 of 1998, Civil Rule Nos 1580, 4519 of 1995, 4920 to 4925, 4927 to 4929, 4934 and 4935 of 1997
Decided On : 21-08-1998
S.K.Kejriwal, S.Shyam, S.Kejriwal, S.D.Devnath, S.C.Kayal, S.Ahmed , R.Bhattacharjee , P.K.Goswami, N.N.Saikia, S.P.Roy, M.Hazarika, N.M.Lahiri, J.Parajuli , D.Thakur, C.K.Sharma Barua, B.W.Phira , A.K.Das, N.Choudhary, A.Dey
The court held that the surcharge imposed for delayed payment of electricity bills was interest, not a penalty, and that the court had the power to grant restitution to consumers who had made delayed payments due to a stay order or injunction.
Headnote:
ELECTRICITY - SURCHARGE - VALIDITY - TERMS AND CONDITIONS OF SUPPLY, 1988, CLAUSE 18 (C) - INTERPRETATION - INTEREST FOR DELAYED PAYMENT - REASONABLENESS - COURT'S POWER TO GRANT RESTITUTION.
Fact of the Case:
Consumers challenged the imposition of a 5% per month surcharge on electricity bills for delayed payment, arguing that it was arbitrary, unjust, and unreasonable. They also challenged the vires of the relevant provision, clause 18 (c) of the Terms and Conditions of Supply, 1988.
Finding of the Court:
The court held that the surcharge was not a penalty but rather interest for delayed payment, intended to ensure speedy payment of bills by consumers. It also held that the grant of additional interest of 18% on the surcharge by the lower court was unwarranted.
Issues: 1. Whether the surcharge imposed for delayed payment of electricity bills was a penalty or interest? 2. Whether the imposition of a 5% per month surcharge was arbitrary, unjust, and unreasonable? 3. Whether the court had the power to grant restitution to the consumers who had made delayed payments due to a stay order or injunction?
Ratio Decidendi: 1. The court relied on previous Supreme Court decisions to hold that the surcharge was interest for delayed payment, not a penalty. 2. The court found that the surcharge was not arbitrary or unreasonable, as it was provided for in the Terms and Conditions of Supply, 1988, which were enacted under the Electricity Supply Act 1948. 3. The court held that it had the power to grant restitution to the consumers, as they had made delayed payments due to a stay order or injunction.
Final Decision: The court allowed the appeals, set aside the impugned order, and directed the appellants to pay surcharge at 18% per annum on the due amount.
By this common judgment we propose to dispose of the above mentioned writ appeals and the civil rules. All the appellants/petitioners are consumers of electricity except appellant in Writ Appeal No.343 of 1997 which happens to be Federation of Industries, NE Region (FINER) representing various Associations of industries. The Assam State Electricity Board, hereinafter referred to as the 'Board' issued a notification revising tariff wef 8.9.94. Thereupon the present appellants and other consumers approached the High Court by filing writ petitions. Vide order passed on 3.9.94 in Civil Rule 3428 of 1994 this Court directed that during the pendency of the writ petition the Board may prepare the bills on the basis of revised tariff but the enhanced amount shall not be realised until further orders. The Board approached the Hon'ble Supreme Court in Special Leave Petition (Civil) No. 15734 of 1994. The Apex Court directed that the revised tariff may be recovered from the consumers to the tune of 50% of the enhancement and stayed the realisation of balance 50%.
2. Vide order dated 17.2.95 the learned Single Judge allowed the writ petition whereupon the Board preferred Writ Appeal No. 51 of 1995. The Division Bench of this Court, vide interim order dated 23.2.95 allowed the Board to recovered the revised tariff to the tune of 25% but restrained the Board from adjusting the excess payment made by the consumers. The matter again went to the Supreme Court and the Apex Court directed that the Board is entitled to recover 50% of the revised tariff and for the remaining 50% the respondent-consumers are to furnish bank guarantee. The bank guarantees were furnished as per the direction of the Court.
3. Vide order dated 22.9.95, the Division Bench of this Court allowed the writ appeal filed by the Board and also dismissed the cross appeal filed by the consumers. The consumers thereafter preferred Special Leave Petition (SLP) but the same was rejected. After disposal of the writ appeals the Board issued bill demanding the balance 50% of the enhanced tariff and surcharge @ 5% PM as provided under clause 18 (c) of the Terms and Conditions of Supply, 1988. Thereupon, a number of writ petitions were filed by the consumers challenging the imposition of surcharge mainly on the following grounds:
(i) That there was no fault on the part of the consumers and the payment was made as per the order of the Court ?
(ii) that, the imposition of surcharge at 5% PM ie 60% PA is arbitrary, unjust and unreasonable.
4. The appellants also challenged the vires of clause 18 (c) of the Terms and Conditions of Supply, 1988.
5. Vide judgment and order dated 24.4.97 the learned Single Judge passed the following order:
“Accordingly, all the petitions are dismissed. It is directed that the petitioners shall pay the surcharge as when it becomes due with interest @ 18% from the due date till realisation. All the petitions are dismissed with costs of Rs. 10,000. The costs shall be Shared equally by all the petitioners. Stay orders are vacated, it is needless to say that as the amount of surcharge is a heavy one, the parties may approach, the ASEB for granting them a reasonable time to pay it by way of installments.”
6. In the impugned judgment it is stated that these matters are similar and covered by the judgment passed in Kamrup Paper Mills Ltd vs. ASEB & others, reported in 1997 (1) GLT 887 (1997 (2) GLJ 549). Against the said judgment, writ appeal being Writ Appeal No. 1186 of 1995 has been filed and the same is disposed of by this common judgment.
7. We have heard learned counsel for both sides. The learned counsel for the appellants have submitted that the payments at the revised tariff were not made by the consumers in view of the grant of stay by this Court and also by the Hon'ble Supreme Court and, as such, they are not liable to pay the surcharge.
8. In the case of Kanoria Chemicals and Industries Ltd & others vs. JP State Electricity Board & others, (1997) 5
