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2022 Supreme(UK) 126
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
SHARAD KUMAR SHARMA, J.
Bharat Heavy Electricals Limited - Petitioner
Versus
Uttarakhand Power Corporation Limited and others - Respondents
Writ Petition (M/S) No. 1609 of 2020
Decided On : 17.05.2022
For the Petitioner:Mr. V.K. Kohli, Senior Advocate, assisted by Mr. Kanti Ram.
For the Respondents: Mr. Dharmendra Barthwal.
Disputes falling within the scope of a contract's arbitration clause must be addressed through the specified recourse, as per the Indian Arbitration Act, 1940.
Headnote:
Electricity Supply Agreement - Dispute Reference to Arbitrator - Indian Arbitration Act, 1940
Fact of the Case:
The petitioner entered into a contract with UPCL for the supply of electricity. A dispute arose regarding payment, and the matter was referred to an arbitrator as per the terms of the contract. The petitioner sought a reduction in the sanctioned load of electricity, which was denied by UPCL based on UERC Regulations.
Finding of the Court:
The court found that the dispute regarding reduction of load fell within the ambit of the contract's Clause 18, and the appropriate recourse for the petitioner was to resort to Clause 18 for redressal of the grievance. The court dismissed the Writ Petition, allowing the petitioner to resort to Clause 18 for the denial of load reduction.
Issues: Dispute over reduction of sanctioned load, applicability of UERC Regulations, interpretation of Clause 18 of the contract
Ratio Decidendi: The court held that the dispute over load reduction fell within the scope of Clause 18 of the contract, and the petitioner's recourse was to be sought under Clause 18 for redressal.
Final Decision: The Writ Petition was dismissed, with the petitioner allowed to resort to Clause 18 for the denial of load reduction.
JUDGMENT :
Sharad Kumar Sharma, J.
As per the agreement for supply of electricity and energy to the petitioner, a contract was executed between the petitioner and the UPCL, for the purposes of supply of 34 MVA of electricity. As per the terms and conditions contained under the Supply Agreement under Clause 18, it had provided that if there arises any controversy emanating from the terms and conditions of the contract, all the disputes, were made referable to the Arbitrator, provided therein, the procedure of which, was supposed to be governed by the provisions of the Arbitration Act of 1940. Clause 18 of the contract, reads as under:-
“18. All disputes and differences between the supplier and the consumer (settlement of adjustment of which is not herein before provided for or arising out of this agreement, shall be referred to a single arbitrator if the parties agree upon one otherwise two arbitrators on to be appointed by the supplier and one by consumer which arbitrator shall appoint before proceedings with the reference and the decision of sole arbitrator of arbitrator or empire as the case may be for shall be final and the binding on the parties and this clause shall in all respect be deemed and construed at the reference to the arbitrator within the meaning of Indian Arbitration Act, 1940 and the provisions of said act. Or any statutory modification or re-enactment thereof for the time being enforce shall apply to such references.
PROVIDED THAT if the question dispute or difference relates to or concerns any dues chargeable to the consumer in terms of this agreement, no reference to the arbitration shall at the instance of the consumer be made till the consumer has deposited with the supplier the amount of dues in disputes, in case.
In case of reduction / addition of load the consumer hereby convenience that for all the purposes he shall be deemed as old registered consumer of the supplier having taken supply for different load before execution of this agreement. The supplier shall treat him accordingly.”
2. The respondents/ Corporation, on an accrual of a dispute with regard to the payment of the bills, which was claimed by the respondents/ Corporation, had invoked Clause 18 of the Supply Agreement, and had sought a reference of dispute, before the Arbitrator, which was decided by the Arbitrator, vide its award dated 13th July, 2011.
3. What would be relevant to observe herein is, that the issue, which was sought to be referred to be adjudicated by the Arbitrator, was summarised by the Arbitrator in the proceedings before him in the following manner :-
“The main questions for our consideration are as follows :-
1. Whether the agreement dated 31.05.2000 is void-ab-initio or has become redundant or is illegal in any manner ?
2. Whether clause 12 (a), (b) and (c) of the agreement dated 31.05.2000 is against the statute of Electricity Reforms Act 1999? If so, its effect.
3. What is the effect if any of the tariff notification made from time to time on the agreement dated 31.05.2000 ?
4. Whether the UPCL is stopped from challenging the agreement dated 31.05.2000 ?
5. Whether the bill dated 16.09.2006 raised by the UPCL is barred estoppels ?
6. Whether the UPCL has acquiescence in accepting the agreement dated 31.05.2000 as binding on it ?
7. Whether the claim of the UPCL raising the bill for the amount of rebate given in earlier bills is barred by law of limitation ?
8. Whether the claim as aforesaid by UPCL is barred by the Section 56 (2) of the Electricity Act ?
9. Whether the UPCL can raise the bill dated 16.09.2006 ?
10. Whether the claimant can raise the bill for late payment surcharge ?
4. In the present Writ Petition, the grievance as agitated by the petitioner is, as against the denial of their claim for reduction of the sanctioned load of electricity from 34MVA to 28MVA, for which, the petitioner had applied, but the same has been declined to be considered on the ground of Sub-clause (3) of Clause 9 of UERC Regulation, which reads as u
