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1996 Supreme(Online)(Mad) 2
MADRAS HIGH COURT
A. R. Lakshmanan, J.
M/s. Annamalai Cotton Mills (P) Limited – Appellant
Versus
Tamil Nadu Electricity Board – Respondent
W. P. No. 11041 of 1995
Important Points
Subject
Administrative Law - Natural Justice
Act Referred
Indian Electricity Act: S.39, S.44, S.48
Indian Contract Act: S.74
Headnote
(B) Natural Justice - Violation - The court found that not affording a personal hearing and issuing vague notices constituted a violation of natural justice principles. The proceedings were quashed for failing to meet legal standards of due process. (Paras 11-90)
Facts of the case:
The electricity Board accused the petitioner mill of energy theft without proper evidence or hearing. The impugned orders pursuant to vague notices demanded extensive penalties without an appropriate legal basis.
Findings of Court:
The show cause notice was deemed vague, and no valid finding of theft was made prior to imposing the levy. The court emphasized that principles of natural justice constitute a fundamental requirement for any quasi-judicial authority.
Issues: The main issues were whether the terms and conditions of electricity supply were legally valid and whether the actions taken against the petitioner violated principles of natural justice.
Ratio Decidendi: The court held that arbitrary actions without a proper hearing violate natural justice and quashed the impugned notices.
Result: Writ petition allowed, and the impugned notice and order were quashed.
| Table of Content |
|---|
| 1. writ petition filed regarding allegations of theft of energy. (Para 1 , 2 , 3 , 4) |
| 2. petitioner's arguments against unlawful actions and procedures. (Para 5 , 6 , 10 , 11 , 13 , 14 , 15 , 16 , 20) |
| 3. court's analysis regarding procedural violations and importance of natural justice. (Para 25 , 26 , 30 , 76 , 89) |
| 4. determination of the validity of the board’s terms and conditions. (Para 32 , 59 , 72) |
| 5. the court quashes the impugned orders for violation of natural justice. (Para 90) |
1. This writ petition coming on for hearing on Wednesday, the 6th, Thursday, the 7th and Friday, the 9th day of December, 1995 upon perusing the petition and the affidavit filed in support thereof the order of the High Court, dated 10-10-95 and made herein and the counter and reply affidavits filed herein and the records relevant to the prayer aforesaid and comprised in the return of the respondents herein to the writ made by the High Court, and upon hearing the arguments of Mr. K. Ravi, Advocate for the petitioner, and of Mr. R. Krishnamoorthy, Senior Counsel assisted by Mr. S. Rajeswaran, Advocate for the respondents, and having stood over for consideration till this day, the Court made the following order: -
The prayer in the writ petition is to issue a writ of declaration the entire paragraph 9.00 and paragraphs 11 and 12 of Schedule Part I of the Schedule to the Revised Terms and Condition of Supply of Electricity formulated by the 1st respondent in B.P. Ms. (FB) No.61 dated 24-12-1988 and Appendix VI and VII thereto insofar as they relate to the theft of energy, as they stand now are ultra vires the powers of the 1st respondent and violative of Art.14 of the Constitution of India, and hence are void, illegal and invalid insofar as the petitioner is concerned.
2. The petitioner is a private limited company owning a spinning mill in the outskirts of Salem. The 1st respondent / Board is a statutory body constituted under S.5 of the Electricity (Supply) Act , 1948. The respondent's have been supplying High Tension Electrical Energy to the Mill right from the establishment of the mill. The Petitioner signed the necessary agreements, the last of such agreement is dated 16-4-1992. The mill was originally sanctioned 1250 KV A load by the Board. Subsequently, on 12-11-1990, the load was increased to 1750 KV A. The service connection given to the petitioner is referred to as HT SC. No. 30, 'High Tension Tariff I, Dasannaickenpatti Operation and Maintenance Section. The tariff rate presently applicable to the petitioner is Rs. 2.20 per unit.
3. On 11-5-1995, certain officers of the Board came to the mill along with local police and seized the meter installed in the mill to record consumption of electrical energy. According to the petitioner, the local police had registered a First Information Report against the Managing Director Co - Managing Director, Mill Manager and the Mill Electrician under S.39(1) and S.44(1) of the Indian Electricity Act charging them with the offence of theft of energy. The Mill Manager and the Electrician were taken into custody by the police. According to the petitioner, they were forced to write and sign certain letters and statements containing false particulars. Subsequently, the petitioner through their advocate issued a notice of retraction of those statements. Both the Managing Directors filed Crl. O.P. No. 3529 of 1955 in this Court for anticipatory bail and this Court granted anticipatory bail on certain conditions. This Court directed each of them to furnish personal bonds for Rs. 1 lakh and also furnish two sureties for Rs. 1 lakh each. Besides, they were asked to furnish a bank guarantee for rupees one crore in favour of the 3rd respondent herein, which they furnished.
4. The 2nd respondent issued a show cause notice dated 17-5-1955 to the petitioner. By such notice, the petitioner was informed that theft of energy in the petitioner's service connection had been 'reported'. In that nothing was sta
