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IN THE HIGH COURT OF ALLAHABAD
R. A. SHARMA, N. L. GANGULY
HINDUSTAN FERRO ALLOYS LTD. - Appellant
Versus
EXECUTIVE ENGINEER, U.P.STATE ELECTRICITY BOARD - Respondents
C. M. W. P. 16810 Of 1990
Decided On : 02/16/1994
ELECTRICITY ACT - MINIMUM CONSUMPTION GUARANTEE CHARGES - SECTION 22, 49 - BOARD'S POWER TO FIX MINIMUM CONSUMPTION GUARANTEE CHARGES - APPLICABILITY OF SECTION 22 AND CLAUSE VI OF THE SCHEDULE - INTERPRETATION - COURT'S ANALYSIS AND CONCLUSION.
Fact of the Case:
Petitioner, a public limited company, established a factory in District Hamirpur and applied for a power connection of 5000 KVA. The U.P. State Electricity Board (Board) sanctioned the connection, and an agreement was executed for that purpose. The petitioner challenged the electricity bills issued by the Board for various periods, claiming exemption from minimum consumption guarantee charges based on a government policy decision and arguing that the Board was estopped from charging such fees. The petitioner also contended that the Board could not impose minimum consumption charges exceeding 15% of the cost of the service line, as per the Indian Electricity Act (Act).
Finding of the Court:
The court held that the Board had the power to fix minimum consumption guarantee charges under Section 49 of the Electricity (Supply) Act, 1948, and not under Section 22 read with Clause VI of the Schedule of the Act. The court found that Section 22 of the Act was not applicable to the Board due to the first proviso to Section 26 of the Electricity (Supply) Act, 1948. The court also held that the Board's action of disconnecting the petitioner's electricity supply without giving proper notice was illegal and unsustainable.
Issues: 1. Whether the Board was estopped from charging minimum consumption guarantee charges. 2. Whether the Board was bound by the government's policy decision granting concessions to new industries. 3. Whether the Board could impose minimum consumption charges exceeding 15% of the cost of the service line.
Ratio Decidendi: 1. The court held that the Board was not estopped from charging minimum consumption guarantee charges, as the petitioner had not laid a foundation for applying the Rule of Estoppel. 2. The court held that the Board was not bound by the government's policy decision granting concessions to new industries, as the policy was not binding on the Board. 3. The court held that the Board could not impose minimum consumption charges exceeding 15% of the cost of the service line, as per the proviso to Section 22 of the Act. However, the court found that Section 22 was not applicable to the Board due to the first proviso to Section 26 of the Electricity (Supply) Act, 1948.
Final Decision: The court dismissed Writ Petitions Nos. 16810 of 1990, 8028 of 1991, 201 of 1992, 23594 of 1992, and 642 of 1993, which challenged the electricity bills issued by the Board. The court allowed Writ Petition No. 35691 of 1993, which challenged the disconnection of electricity supply, and quashed the impugned order dated 27-9-1993. The court directed the respondents to determine the petitioner's liability after giving notice to it within one month from the date of presentation of the certified copy of the judgment.
( 1 ) PETITIONER is a public Ltd. Company. It established a factory in District Hamirpur for manufacturing ferro silicon/ ferro alloys. For running its factory it applied for power connection of 5000 KVA and the U. P. State Electricity Board (hereinafter referred to as the Board) sanctioned the same and an agreement was executed by the petitioner with the Board for that purpose.
( 2 ) PETITIONER filed Writ Petition No. 16810 of 1990, challenging the electricity bills sent to it by the Board for the months of April and May, 1990. Writ Petitions Nos. 201 of 1992, 23594 of 1992 and 612 of 1993 were filed by the petitioner, challenging the electricity bills issued to it by the Board for various other periods. In all the above writ petitions as well as in Writ Petition, No. 8028 of 1991 prayer for writ of mandamus commanding the Board to comply with the policy decision of the Government, granting concessions to new industries has also been made. Writ petition No. 35691 of 1993 has been filed by the petitioner, challenging the order of disconnection of electricity.
( 3 ) GOVERNMENT of U. P. decided in April, 1990 to give incentives/concessions for establishment of new industries in various districts of this State. One of the concessions was exemption from payment of minimum consumption guarantee charges for a period of five years for new industries. In pursuance of the above policy, the Government issued an order dated 15-10-1990. As the bills issued by the Board included the minimum consumption charges also, the petitioner has filed these writ petitions, challenging the above action of the Board.
( 4 ) LEARNED counsel for the petitioner in support of the petitions has made three submissions. Namely, (i) the Board is estopped by Rule of Estoppel from charging the minimum consumption charges, (ii) the policy decision of the Government of April, 1990 and as contained in G. O. dated 15-10-1990 is binding on the Board and it has to give the concessions announced thereby; and (iii) in any case in view of Section 22 and Clause VI of the Schedule of the, Indian Electricity Act (hereinafter referred to as the Act) Board cannot impose minimum consumption charges more than 15% of the cost of service line required to comply, with, the requisition.
( 5 ) THE first two points raised by the learned counsel for the petitioner have been decided against it by a Division Bench of this Court in the case of Sarvodya Ispat Pvt Ltd. v. U. P. State Electricity Board, (1993) 1 Civil and Revenue Cases Reporter 658, wherein similar contentions were rejected.
( 6 ) AS regards the third submission learned counsel for the petitioner has placed reliance on proviso to Section 22 read with Clause VI of the Schedule of the Act. According to the proviso to Section 22, a licensee is entitled to demand and realise such minimum annual sum as will give him reasonable return on the capital expenditure and will cover other standing charges incurred by him in order to meet the possible maximum demand of the consumer. Proviso (a) to Clause VI of the Schedule lays down that the licensee is to supply the power on the basis of a written contract with sufficient security to be given by the consumer binding himself to take supply of energy for not less than two years to such an amount not exceeding 15% of the cost of service line required to comply with the requisition.
( 7 ) IN view of the first proviso to Section 26 of the Electricity (Supply) Act, 1948, Section 22 of the Act does not apply to the Board. Second proviso to the same Section lays down that Clause 71 of the Schedule will apply to the Board in respect of that area where distribution mains have been laid by the Board and the supply of energy through any of them has commenced. Section 26 of the Act is reproduced below:"26. Board to have powers and obligations of licensee under Act 9 of 1910. Subject to the provision of this Act, the Board shall, in respect of the whole State, have all the powers and
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