1993 JLJ 306
S.K. Dubey and S.K. Chawla, JJ.
Gwalior Steel sPvt. Ltd. (M/s) v. M.P.E.B.
M.P.No.23 of 1992; Decided on 3.12.1992.
(2) Electricity (Supply) Act, 1948 -- S. 49 -- supply of electricity by the Board -- it can fix tariff -- purpose of fixing consumption and minimum charges -- such clause in agreement is not unreasonable.
It is well to notice here the concept of minimum charges. The idea behind imposition of minimum charges is to ensure for the producer of electrical energy, a fair return on his capital out-lay. AIR 1936 Cal. 265 relied on.
The minimum charge is intended to compensate the supplier for keeping in a state of readiness the generating capacity and facilities for supplying electricity. AIR 1982 Born. 580 relied on.
The clause with regard to minimum charges cannot be said to be unreasonable "in as much as the supply of electricity to a consumer involves incurring of overhead installation expenses by the Board which do not vary with the quantity of electricity consumed and the installation has to be continued irrespective of whether the energy is consumed or not." AIR 1990 SC 699 followed. [Para 12]
(3) Electricity (Supply) Act, 1948 -- S. 49 -- agreement of fixed minimum charges -- licensee able to consume electricity to the level of minimum charges -- he cannot complain power-cuts for some hours in a day., There is no getting away from holding that despite the alleged power-cuts, usually not exceeding 7 hours a day, with 16 to 18 hours always available to the petitioner to consume electrical energy, the petitioner could have easily consumed electrical energy to the level of minimum charges during each month. If the petitioner even then was not able to utilise electrical energy to the level of minimum charges, that was not because it was prevented from using electrical energy but because it was not able to run the plant to its full capacity or because the plant remained idle for some time. The entire thrust of the petitioner‘s case that it was prevented from using electrical energy and so, could not consume to the level of minimum charges, is belied and falls to the ground. On this short ground, the petitioner deserves to be given no relief. [Para 8]
Power cuts have been specially provided in clause 12 of the agreement. A consumer under clause (a) thereof agrees to restrict or regulate his consumption of electrical energy during peak hours as may be directed by the Chief Engineer of the Board in writing and also during other hours if required to do so, if power position or any other emergency in the power system warrants such a course of action. A consumer under clause (b) thereof further agrees to his electricity supply curtailed, staggered, or cut off altogether by the Board, if the power position or any other emergency in the power system warrants such a course of action. The petitioner cannot justly complain about power cuts applied to it, in view of this clause 12. For that reason, it cannot also contend that it may be required to pay lesser than minimum monthly charges, which it stipulated to pay whether it consumed electricity or not. AIR 1976 SC 1100, AIR 1989SC 1030 and AIR 1991 Kant. 220 distinguished. AIR 1982 Bom.580 and AIR 1989 AP 14 relied on. [Paras 18 to 22]
S.K. Chawla, J.--1. The question involved in this writ petition is, whether a consumer of high tension industrial power, on account of interrupted supply of electrical energy due to power cuts, is relieved of the obligation to pay minimum monthly charges and is liable to pay only to the extent of electrical energy actually consumed by him'?
2. The petitioner, M/s. Gwalior Steels Private Limited, is a Company under the Companies Act, 1956, having a Mini Steel Plant at Banmore, District Morena, M.P., manufacturing special alloy steel castings and sections. The plant was granted high tension industrial power connection by Madhya Pradesh Electricity Board (respondent herein) under an agreement, Annexure-A. It was undertaken under the agreement, that the petitioner would be supplied electricity for a load of 3500 K.V.A. (Kilo Volt Amperes) on 33 K.V. That demand of electricity having been contracted to be supplied is called "contract demand", a phrase which may have to he used in discussion hereafter.
3. It is easy to visualise that there may be two kinds of bases to charge for the electricity. One basis may he to charge it on the rate of in low or load of electricity supplied, i.e., on K.V.A. Another basis may be to charge it on the actual consumption of electricity, measured in units. It was undertaken under the agreement in question that the petitioner would pay each month minimum charges on the K.V.A., at the rate of consumption of 100 units per K.V.A. of the contract demand, whether any energy was consumed or not. This was subsequently raised to the rate of consumption of 150 units per K.V.A. of the contract demand. The contract demand being 3500 K.V.A., the minimum charges came to 3500 multiplied by 150, that is equal to 5,25,000 units. At the tariff rate of 93 paise per unit, the total minimum monthly charges worked out to Rs. 4,88, 250/-. In other words, the petitioner undertook to pay monthly minimum charges of Rs.4,88,250/- per month for the load of energy contracted to be supplied to him. It will be seen that in order to save loss on the price of electricity it was necessary that the petitioner should have consumed each month at least 5,25,000 units of electrical energy.
4. The Mini Steel Plant in question of the petitioner came to be energised on 22nd August, 1991. Right from that time, power cuts were applied by M.P.E.B. (hereinafter referred to as "the Board") with the result that there never Was continuous uninterrupted supply of electricity throughout 24 hours in a day. The consumption of electricity in units by the petitioner could never reach the level of minimum monthly charges in any month.
5. The case of the petitioner company is that during the period from August, 1991, i.e. inception of the plant, till December, 1991, the power-cuts were to the extent of a total of 560 hours as detailed in Annexure-E to the petition. As per clause 11 of the agreement, Annexure-A, the Board was obliged to ensure uninterrupted and continuous supply of electricity to the petitioner's plant. The Board had failed to live-up to this obligation. As a result, the petitioner was prevented from consuming electricity even up-to the level of minimum charges. The electricity actually consumed by the petitioner, measured in units, for the period August, 1991 to December, 1991,cameto 10,71.384-60 units of the value of Rs.9,96,026-40 p., whereas the minimum charges for this period came to Rs.20,61,500-00. The details and break-up are given in paragraph 14 of the petition. Thus, the minimum charges exceeded by about rupees ten lacs over the value of electricity consumed during this period. The minimum charges in fact exceeded actual consumption even for subsequent months until the present petition was filed. The case of the petitioner is that in such a situation clause 23 of the agreement, Annexure A, was attracted and under it the petitioner was liable to pay only to the extent of energy actually consumed by it. On this ground a writ has be
2. Mukund Iron and Steel Works Ltd: v. M.S.E. Board in = AIR 1982 Bom. 580
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