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2012 Supreme(Ori) 515
IN THE HIGH COURT OF ORISSA
Mr. S.K. Mishra., J.
BALASORE ALLOYS LIMITED - APPELLANT
Versus
NORTH EASTERN ELECTRICITY SUPPLY COMPANY OF ODISHA LTD. - RESPONDENT
W.P.(C) No. 33090 of 2011
Decided On : 24-08-2012
Parag Tripathy, Senior Advocate, S.P. Sarangi, P.P. Mohanty, D.K. Das and P.K. Das, Advocates, for the Appellants; Sanjit Mohanty, Senior Advocate, P. Mohanty, D.N. Mohapatra, S. Mohanty, P.K. Nayak and S.N. Das, Advocates, for the Respondents
The main legal point established in the judgment is that the notice issued by the NESCO under Section 56(1) of the Electricity Act for disconnection of electricity was not hit by the limitation prescribed under Sub-section (2) of Section 56 of the Act.
Headnote:
Electricity Act - Disconnection Notice - Section 56(1) - Summary of Acts and Sections: The court discussed the provisions of the Electricity Act, 2003, particularly Section 56(1), which allows the licensee to disconnect the electricity supply for non-payment of charges. The court also interpreted the provision of Sub-Section 2 of Section 56, which limits the recovery of dues after two years from the date when such sum became first due unless continuously shown as recoverable as arrear of charges for electricity supplied. The court held that the notice issued by the NESCO to the petitioner company under Section 56(1) of the Electricity Act for disconnection of electricity on the non-payment of the electricity dues was not hit by the limitation prescribed under Sub-section (2) of Section 56 of the Act.
Fact of the Case:
The petitioner, M/s. Balasore Alloys Limited, sought to quash a disconnection notice issued by the NESCO for outstanding dues. The petitioner claimed to have settled the old outstanding dues as per the minutes of discussion dated 31.1.2005 and the letter dated 31.8.2007 of opposite party no.3. The petitioner argued that the disconnection notice was illegal, arbitrary, and bad in law.
Finding of the Court:
The court found that the settlement dated 31.1.2005 was cancelled due to default on the part of the petitioner-company. The court also found that the amount claimed by NESCO to the tune of Rs. 80,77,19,560.07, shown as a provisionally withheld amount in its bill, was recoverable as arrear of charges for electricity supplied and the disconnection notice issued by NESCO was not hit by the limitation prescribed under Sub-section (2) of Section 56 of the Electricity Act.
Issues: The issues before the court included the maintainability of the writ petition in view of the availability of an alternative remedy, whether the settlement dated 31.1.2005 was acted upon or cancelled, the interpretation of the letter issued by the petitioner company on 05.03.2011, and whether the disconnection notice issued by NESCO was hit by the limitation prescribed under Sub-Section 2 of Section 56 of the Electricity Act.
Ratio Decidendi: The court held that the writ application was not maintainable, as there was no arbitrary action on the part of the electricity company or the licensee, and there was no violation of Article 14 of the Constitution. The court also held that the notice issued by NESCO under Section 56(1) of the Electricity Act for disconnection of electricity was not hit by the limitation prescribed under Sub-section (2) of Section 56 of the Act.
Final Decision: The writ application was dismissed by the court.
JUDGMENT :
S.K. Mishra, J. - In this writ petition, petitioner no.1, namely M/s. Balasore Alloys Limited (hereinafter referred to as the "petitioner-company"), has prayed to quash the disconnection notice issued by the Executive Engineer, Central Electrical Division, Balasore, opposite party no.2, on 16.12.2011.
2. The petitioner-company pleads that a disconnection notice under Section 56(1) of the Electricity Act, 2003 (hereinafter referred to as the "the Act" for brevity) read with Regulation 100 of the Odisha Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 2004 (hereinafter referred to as "the Code" for brevity) was issued demanding a sum of Rs. 1,65,51,26,499/- as outstanding dues as on 16.12.2011. The petitioner-company pleads that in the year 2004, the petitioner-company and opposite party no.1, North Eastern Electricity Supply Company of Odisha Ltd. (hereinafter referred to as "the NESCO" for brevity), mutually decided to settle the old outstanding dues by way of one time settlement. After series of negotiations and discussions, it was agreed that the arrear dues payable by the petitioner-company to the NESCO would be Rs. 3885.98 lacs as on 31.12.2004. The petitioner-company was required to deposit the said amount in twenty monthly instalments. It was further agreed that the petitioner-company shall deposit an amount of Rs. 480 lacs towards additional security deposit in nine monthly instalments. The aforesaid decisions were recorded in the minutes of discussion dated 31.1.2005 and signed by the authorized officers of the parties.
It is further pleaded by the petitioner-company that in accordance with the aforesaid minutes of discussion, it started making payment of the first ten monthly instalments as per the schedule indicated in the minutes of discussion. However, in view of the recession in the international market, the petitioner-company could not pay the balance ten instalments and requested the NESCO to defer payment of the balance amount for a period of twelve months. While matter stood thus, the petitioner-company on 20.11.2006 and 30.11.2006 paid two further instalments which were duly received by the NESCO. In the meantime the petitioner company deposited the entire additional security amount of Rs. 480 lacs in accordance with the schedule set out in the minutes of discussion dated 31.1.2005.
The petitioner-company after having paid twelve monthly instalments requested the NESCO to re-schedule the repayment dates and the balance dues and on consideration of the same, on 31.8.2007 the Chief Executive Officer, NESCO, opposite party no.3, extended the due dates for payment of the balance eight instalments subject to the condition that the petitioner-company opens a letter of credit in a scheduled/nationalized bank at Balasore for an amount of Rs. 16 crores which would cover the balance eight months instalments payable. It is, therefore, pleaded by the petitioner company that the decision taken by opposite party no.3 on 31.8.2007 in effect superseded and/or modified the dates of payment of instalments set out in the minutes of discussion dated 31.1.2005. Pursuant to the letter dated 31.8.2007 of opposite party no.3, on 4.9.2007, 5.10.2007, 6.11.2007, 7.12.2007, 7.1.2008, 13.2.2008, 14.3.2008 and 17.4.2008 the petitioner company paid the balance outstanding dues of Rs. 16 crores in eight instalments through letter of credit. It paid the aforesaid balance outstanding dues of Rs. 16 crores to NESCO in addition to the monthly energy bills. After payment of the first instalment of Rs. 2 crores as per the terms and conditions of the letter dated 31.8.2007 of opposite party no.3, the arrear was reduced to the tune of Rs. 80 crores approximately by NESCO in the energy bills w.e.f. the month of August, 2007. Hence the NESCO accepted the terms and conditions of minutes of discussions between the NESCO and the petitioner-company dated 31.1.2005 by way of revising the energy bill.
While the matter stoo
