Jiyajeerao
Cotton Mills Limited & Anr Vs. Madhya Pradesh Electricity Board & Ors
[1988] INSC 269 (12
September 1988)
Sharma,
L.M. (J) Sharma, L.M. (J) Sen, A.P. (J)
CITATION:
1989 AIR 788 1988 SCR Supl. (2) 978 1989 SCC Supl. (2) 52 JT 1988 (4) 737 1988 SCALE
(2)1039
ACT:
Indian
Electricity Act, 1910--Section 22B--Company entering into agreement with
Electricity Board for supply of electricity--Board supplying additional energy
and billing at penal rates--Action of Board--Whether valid and legal.
% Madhya
Pradesh Electricity (Supply and Consumption Regulation) Order 1975/Madhya
Pradesh Electricity (Generation, Control and Consumption) Order 1975: Clause 3(i)
Regulation Order--Consumers to reduce consumption-- Board entitled to
disconnect supply for breach or charge penal rates for excess energy
consumed--Generation Order provided for assessment of generating capacity of
captive power of consumer.
Words
and Phrases: `Regulate'--Meaning of.
HEAD NOTE:
In
October 1971 the appellant company entered into an agreement with the Madhya
Pradesh Electricity Board, respondent No. 1, for supply of electricity. The
quantity of electricity to be supplied varied from time to time.
To
meet the situation arising out of insufficient generation of electricity, the
State of Madhya Pradesh issued two orders. By the Madhya
Pradesh Electricity (Supply and Consumption Regulation) Order, 1975 the
consumers were asked to reduce their consumption failing which they would have
to pay charges at penal rates for excess consumption, without prejudice to the
Board's power to disconnect the supply. By the Generation Order, the consumers
who had alternative sources of captive power were required to generate
electricity to the maximum extent technically feasible, from their own sources
of electricity.
After
the assessment of their generating capacity, the appellant was directed to
generate additional electricity of 2,500 K.W. Sub-Clause (iii) of Proviso to
clause 3 of the Generation Order provided that if in certain contingencies
there was reduction in the generation of electricity by the PG NO 979 consumer,
the Board would try to make good the deficit against the appropriate charge for
it. Under this provision the appellant, on pleading emergency, was supplied
additional energy from time to time. For excess consumption drawn without the
Board's prior approval, the appellant was sent bills at penal rate.
The
appellant company challenged the demand before the High Court by filing a writ
application under Article 226 of the Constitution, which was dismissed by the
High Court except for granting some minor reliefs.
Before
this Court, it was contended by the appellant:
(l)
There is no sanction in Law for charging at the Penal rate for the electricity
consumed beyond what is permissible under the Generation Order.
(2)
That the assessment of their generating capacity was not made by the authority
empowered to do so. i.e. the Divisional Engineer, and
(3) that
the assessment was based on irrelevant and extraneous considerations Dismissing
the appeal, it was,
HELD:
(1) A
perusal of the documents on record, including admissions on the part of the
appellant company.
furnishes
unimpeachable evidence, proving that the assessment of the maximum feasible
capacity of the appellant's capative power sets was duly made in accordance
with the Generation Order, and that the Divisional Engineer, who had been authorised
by the Generation Order to assess the appellant's generating capacity, reached
the conclusion after personally considering the matter thoroughly.
(2) In
pursuance of the assessment of the generating capacity the required direction
was issued which was acted upon by the parties for a number of years. The
Company not only took steps to generate the additional energy as was required
of it, it also took advantage of the provisions of proviso (iii) to clause 3 of
the Generation Order and benefited by it from time to time. [988A-B]
(3)
The appellant company was fully conscious of the fact that it was consuming
electricity beyond its entitlement under the two Orders. For several years the
Company was particular to obtain the permission of the Board PG NO 980 for
drawing electricity in excess of what it was entitled to by the agreement, as
modified by the Regulation Order and the Generation Order, but later, it not
only stopped seeking the advance sanction in this regard, it did not even care
to inform the Board of the excess drawal. [1001B-C;F-G]
(4)
Section 22B of the Indian Electricity Act, 1910 permits the State Government to
issue an appropriate order for regulating the supply, distribution and
consumption of electricity. [1010B]
(5)
The expression "regulate" occurs in other statutes also, as for
example, the Essential Commodities Act, 1955, and it has been found difficult
to give the word a precise definition. It has different shades of meaning and
must take its colour from the context in which it is used having regard to the
purpose and object of the relevant provisions, and as has been repeatedly
observed, the Court while interpreting the expression must necessarily keep in
view the object to be achieved and the mischief sought to be remedied.
[1010C-D]
(6)
There does not appear to be any doubt that either under S. 49(1) of the 1948
Act read with the agreement or under s. 49(3) or under both the provisions the
respondent Board was fully authorised to levy and to make a demand at a higher
rate than the usual tariff.[1014E-F]
(7)
The necessity for issuing the two orders arose out of the scarcity of
electricity available to the Board for supplying to its customers. The
situation did not leave any option to the Board but to make limited supply of
electricity to its consumers. and it must be held to have, in the
circumstances,. the right to stagger or curtail the supply. The orders were
issued in this background and to make the direction mentioned therein effective
it was considered essential to impose sanctions which could take any reasonable
from; either disconnection in case of gross violation or the lesser sanction of
enhanced tariff.
Hence
none of the two Orders was illegal or unreasonable.
Adoni
Cotton Mills v. A.P. State Electricity Board, [1976] 4 SCC 68; State of U.P. v Hindustan Aluminium Corporation, [1979] 3 SCC 229
and New Central Jute Mills v U.P. State Electricity Board, [1986] Supp. SCC581.
CIVlL
APPELLATE JURISDICTION: Civil Appeals Nos. 3510- 3511 of 19822.
PG NO
981 From the Judgment and Order dated 23.9.1982 and I8/ 19.10.1982 of the
Madhya Pradesh High Court in Misce. W.P. NO. 888/81 and Review M.C.C.No. 352 of
1982.
D.
Gupta, M.C. Bhandare, O.P. Khaitan, Anil Bhatnagar, Krishan Kumar, Dhruv Agarwal
and Mrs. Kiran Choudhary for the Appellants.
S.N. Kacker,
M.L. Jaiswal, Vivek Gambhir and S.K. Gambhir for the Respondents.
The
Judgment of the Court was delivered by SHARMA, J. The dispute in these appeals
is in regard to the additional demand of electric charges made by the
respondent no. 1 on the appellant no. 1 for energy consumed.
By a
writ application filed before the Madhya Pradesh High Court the appellant
challenged the demand of Rs. 1,86,97,880.97 for the period 12.11.1979 to
30.6.1981.
Except
for granting a minor relief as indicate in paragraph 45 of its judgment, the
High Court dismissed the writ application. The writ petitioner-appellants have
impugned the judgment before this Court by special leave.
2. The
appellant no. 1 Jiyajeerao Cotton Mills Ltd. hereinafter referred to as the
Company which runs a textile mill in Gwalior, entered into an agreement dated
27.10.1971 with the respondent no. 1 Madhya Pradesh Electricity Board in short
the Board a licensee under the Indian Electricity Act, 1910 hereinafter
referred to as the 1918 Act for supply of electricity in accordance with the
terms and conditions mentioned therein. The quantity of electricity to be
supplied varied from time to time under supplementary agreements and the Board
had to supply 2,500 K.W. on A.T. basis with effect from 1.11.1973. Since 1975
the Board is not able to generate sufficient electricity to meet the full
demand of the consumers and with a view to ease the situation two orders were
issued by the States of Madhya Pradesh under s. 22B of the 1910 Act on 4.4.1975
called as the Madhya Pradesh Electricity Supply and Consumption Regulation
Order, 1975 and the Madhya Pradesh Electricity Generation, Control and
Consumption Order. 1975. The learned counsel for the parties have in their
arguments referred to these orders as Regulation Order and Generation Order
respectively. By the Regulation Order , the consumers were asked to reduce
their consumption in accordance with the provisions therein. It was further
provided that without prejudice to the Board's power to disconnect the supply
in PG NO 982 the event of any violation thereof, the consumer will have to pay
the charges at penal rates for the excess energy consumed. The Generation Order
said that if a consumer had an alternative source of generating power from his
own generating set (described as captive power by the parties) it may be
required to generate electricity to the maximum extent technically feasible and
the supply by the Board would be reduced to that extent. The Order in Clause 3
provided for assessment of the generating capacity of the captive power of the
consumer. The contract demand under the agreement was directed to remain
reduced accordingly. Sub clause (iii) of Proviso to Clause 3 said, that if in
certain contingencies, there was reduction in the generation of electricity by
the consumer, the Board would try to make good the deficit against an
appropriate charge for it. An arbitration clause with respect to any dispute
was included in the 6th paragraph of the Order as its last term.
3.
Both the Orders came into force with effect from the 7th of April, 1975. The
Divisional Engineer, Gwalior informed the appellant Company by the letter dated
17.5.1975 (marked as Annexure `B', page 121, Vol. II of the paper book) that
its additional generation capacity technically feasible by its own generating
sets had been assessed at 2,700 K.W. In view of the contract under which the
Board was to supply 2,500 K.W. with effect from 1.11.11973,, the Company was
directed to generate additional electricity to that extent, thus reducing the
demand on the Board to nil.
After
several letters passed between the parties, which will be dealt with at some
length later, another letter dated 10.10.1975 (marked as Annexure `O', page
136, Vol. II of the paper book) was sent to the Company issuing a fresh
direction for generating additional electricity to the extent of 2,500 K.W.
with effect from 31.10.1975.
4. It
appears that the Board did not bill the appellant Company for any additional
energy supplied at the penal rate for the next several years. According to its
case the Company invoked the provisions of Proviso (iii) to Clause 3 of the
Generation Order pleading emergency. arising from time to time, covered by the
Proviso, and was supplied additional energy accordingly. The Company was under
a duty to place its difficulties before the Board and obtain permission before
drawing additional energy under this provision of emergency supply. It appears
that after 11.11.1979 additional power was drawn by the appellant without the
Board's prior approval and a letter Annexure `T' dated 5.8.1980 was ultimately
sent to the Company explaining the situation and telling it that the supply
availed by it with effect from 12.11.1979 would be billed at the penal PG NO
983 rate. In the meantime two additional contracts were executed by the
parties; the first one on 11.7.1979 (Annexure `C') for supplying additional 800
K.W., and the second one dated 26.2.1980 (Annexure `D' for additional 190 K.W.
Thus the total demand under the agreements added to 3,490 K.W. The Board by its
letter Annexure `U' dated 13.10.1980 reiterated its stand taken under Annexure
`T' intimating the appellant the maximum amount of electricity it was entitled
to consume at the normal rate. The letter further added that no additional
power would be allowed as emergency supply to the Company even during the
period of overhauling of the generating sets as was done earlier under Proviso
(iii) to Clause 3 of the Generation Order. The matter was debated for some time
and ultimately the additional demand for the period 12.11.1979 to 30.9.1980
amounting to Rs.94,41,745.60 was served on the appellant Company by the letter
Annexure `X' dated 15.1.1981. The further bills were also sent on the same
basis.
5. On
5.8.1981 the application under Article 226 of the Constitution was filed before
the Madhya Pradesh High Court challenging Annexure `H', `O', `T' and `U'. The
main case of the petitioner-appellant was rejected by the High Court, but
marginal reliefs with respect to the Board's demands for the period 12.11.1979
to 25.2.1980 and from 26.2.1980 to 31.7.1980 were allowed on the basis of
errors in calculation. The High Court also pointed out that under the terms of
the Generation Order the Board was under a duty to consider and allow the
additional emergency supply when conditions arose making the Proviso (iii) to
Clause 3 applicable and the Board could not refuse to do so as was observed in
some of its letters. Subject to these minor modifications the writ application
was dismissed by the judgment dated 23.9.1982. The Company thereafter filed an
application for review, which was dismissed by a speaking order of 19.10.1982.
The present appeals have been filed by special leave against these two
judgments.
6. The
appeals have been argued at considerable length by Mr Dipankar Gupta on behalf
of the appellant and Mr. S.N. Kacker representing the respondents with great
ingenuity and resourcefulness. Mr. Gupta appearing in support of the appeals,
however did not press some of the points urged on behalf of the appellant in
the High Court and relied upon some new grounds. We. therefore do not consider
it necessary to deal with all the points disposed of in the High Court
judgments except making reference to some of them while dealing with the points
urged before us.
PG NO
984
7. It
will be necessary to examine the relevant portions of the Regulation and
Generation Orders (Annexures `E' and G') before considering the arguments of
the learned counsel.
They
were both issued on 4.4.1975 by the State Government of Madhya Pradesh under s.
22B of the 1910 Act, which reads as follows:
"22.
B(1) If the State Government is of opinion that it is necessary or expedient so
to do, for maintaining the supply and securing the equitable distribution of
energy, it may by order provide for regulating the supply, distribution,
consumption or use thereof.
(2)
Without prejudice to the generality of the powers conferred by sub-section (1)
an order made thereunder may direct the licensee not to comply, except with the
permission of the State Government with-- (i) The provisions of any contract,
agreement or requisition whether made before or after the commencement of the
Indian Electricity (Amendment) Act, 1959,for or the supply (other than the
resumption of supply) or an increase in the supply of energy to any person, or
(ii) any requisition for the resumption of supply of energy to a consumer after
a period of six months, from the date of its discontinuance, or (iii) any
requisition for the resumption of supply of energy made within six months of
its continuance , where the requisitioning consumer was not himself the
consumer of the supply the time of its discontinuance." Clauses 3 and 4(i)
of the Regulation Order (Annexure`E') have been refer,red to by the learned
counsel for the parties repeatedly and they are quoted below:
"3.(1).
No consumer receiving supply electrical energy from the Board and consuming or
using electrical energy for any of the categories specified in column (2) of
PART- (of Schedule VII shall consume or use during any month or day electrical
energy in excess of that specified in PG NO 985 respective entry in column (3)
of the said Schedule;
(2) (a).
If at any time during the month, on inspection of the meter reader or any other
person authorised by the Divisional Engineer/Assistant Engineer of the Board
having jurisdiction, the consumer is found to have already reached or exceeded
the quantity of electricity indicated in column (3) of Part-A of Schedule VII
the Divisional Engineer/Assistant Engineer of the Board, having jurisdiction
over the area where the consumer's premises is situated, may by an order in
writing require the consumer not to utilise electrical energy for the rest of
the month and such order shall be complied with by the consumer forth- with.
Appeal shall, however, lie with the Deputy Chief Engineer of the Board having
jurisdiction whose decisions thereon shall be final.
(b)
Any H.T. consumer who makes default in complying with the directions contained
in sub-clause (1) and item (a) of this sub-clause shall be warned in the first
instance in writing by the Divisional Engineer/Assistant Engineer of the Board
having jurisdiction over the area where the consumer's premises is situated and
if the default continues, the said Divisional Engineer/Assistant Engineer shall
after reasonably satisfying himself disconnect power supply altogether to such
consumer and supply shall not be resumed without orders of the Deputy Chief
Engineer of the Board having jurisdiction." "4. Without prejudice to
the Board's powers to disconnect supply in the event of violation of Clause 3
above the Board shall bill the electricity consumed or used in excess of the
monthly limit specified in column (3) of the Schedule VII at the penal rates as
mentioned below:
(i)
All H.T. consumers as specified in Schedules I, II, III and IV--Four times of
normal tariff (both in respect of demand charges and energy charges) includ- ing
fuel cost adjustment charges." The expressions "average monthly
consumption", average demand" and "average daily
consumption" have been defined in Clause 2 of Annexure `E' by taking
January, February and March 1975 as the base period. The VIIth Schedule
mentioned PG NO 986 in Clause 3 above has not been included in the paper books
with reference to which arguments have been addressed but a copy thereof was
filed during the hearing and accepted as a correct copy by the both sides.
8.
This Regulation Order was substituted by another Order and later by still a
third Order, amending the penal rate and the Schedules to the Order. However,
the learned counsel for the parties stated that except for change in the penal
rate and the figures in the Schedules, the Order has remained the same all
through, and it is not necessary, therefore, to refer to the other Orders.
9. So
far as the Generation Order is concerned, it requires such consumers, who have
their private generating sets, to generate electrIcity to the maximum extent
technically feasible in the following terms:
"3.
Any consumer who is receiving electrical energy from the Board and also has an
alternative source of generation of power by his own generation set may be
required by the respective Divisional Engineer of the Board having jurisdiction
to generate electricity from his set (or sets) to the maximum extent
technically feasible in the opinion of the Divisional Engineer and the Board's
supply of electrical energy to such consumer shall be reduced to the extent of
additional generation assessed as feasible by the Divisional Engineer;
Provided
that--- (i) Before assessing the additional generation feasible and directing
the consumer accordingly, the Divisional Engineer shall consult the local Manager
or Engineer in charge of the set;
(ii)
The Board shall, during the period such a direction is in force, reduce the
contract demand of the consumer to a corresponding extent and
(iii) if
due to an emergency outage, which in the opinion of the Divisional Engineer of
the Board having jurisdiction is not due to any negligence or failure of those
responsible for maintaining and running the set. there is reduction is
additional generation, or if in the opinion PG NO 987 of the Divisional
Engineer, the set has to be taken out for maintenance during the period of such
emergency or maintenance outage the Board shall try its best to make good the
reduction to the consumer, levying an appropriate charge for it." Its 6th
Clause directed any dispute between the consumer and the Officer acting under
Clauses 3 and 4 to be referred to the Electrical Adviser and Chief Electrical
Inspector to the State Government, for his decision.
10.
While Regulation Order was meant for general application to all consumers, the
Generation Order was confined only to such consumers who were having captive
power source. It is also manifest that such a consumer was under a duty to
generate additional electricity only when the maximum technically feasible
capacity of the generating set or sets of the consumer was assessed under
Proviso (i) to Clause 3 and was followed by a direction to that effect.
The
main argument of the learned counsel for the appellant has been that none of
the two assessments and directions contained in Annexures `H' and `O' was
sustainable in law on the grounds that—
(a) in
making the assessment of the technically feasible maximum capacity, relevant
factors were not considered. and irrelevant and extraneous matters were taken
into account;
(b) the
requisite opinion was not arrived at and the assessment was not made by the
authority empowered to do so; and
(c) the
participation of the appellate authority in process of' assessment, completely
vitiated it in law.
Mr.
Gupta argued that instead of examining the point on its merit. the High Court
erroneously brushed it aside on the plea of waiver and acquiescence. Relying on
a number of letters sent by the appellant to the respondent Board it was urged
that the appellant Company was protesting against the impugned directions
issued by the Board and it is not right to shut it out on the technical ground
of estoppel. Mr. Kacker, on the other hand interpreted the High Court's
judgment differently. According to him none of the points raised by the Company
was rejected without examining the merits. He strongly relied on some of the
letters referred to in the argument of the Company itself as also a few other
letters in support of his submission that they furnished PG NO 988
unimpeachable evidence including admissions on the part of the appellant
Company proving that the assessment of the maximum feasible capacity of the
appellant's captive power sets was duly made in accordance with the Generation
Order and in pursuance thereof the required direction was issued which was
acted upon by the parties for a number of years.
The
Company not only took steps to generate the additional energy as was required
of it, it also took advantage of the provisions of Proviso (iii) to Clause 3 of
the Generation Order and benefitted by it from time to time.
11.
For appreciating the argument of the learned counsel for the appellant it is
necessary to examine some of the Orders and letters issued in March and April
1975. As has been mentioned earlier. the two Government Orders were issued on
4.4. l975. It appears that the matter was being discussed by the different
authorities of the State Government and the Electricity Board since before this
date and advisability to require the consumers having captive power to generate
as much energy as was technically feasible was under consideration for some
time. The question as to their capacity in this regard, naturally assumed
importance and some steps for assessing the same were taken a few days before
the Orders actually came into effect. On 28.3.1975 a letter sent from the Board
to Sri H.K. Aggarwal the Electrical Adviser and Chief Electrical Inspector to
the State Government (Annexure `R-1') referred to a telephonic talk in
connection with the assessment of the generating capacity of the captive power
set. It was mentioned "that it would be necessary to make a realistic
assessment in respect of each of the consumers" by keeping in mind the
suggested factors. The letter further said that with that object the Board had
constituted a Committee consisting of Sri Aggarwal himself. the Superintending
Engineer of the concerned Circle of the Board and the Divisional Engineer
(Generation), Jabalpur of the Board as Members. The appellant Company is
mentioned as one of the 17 consumers in this category. Along with his letter
dated the 3rd of May 1975 Sri Aggarwal sent the report as desired. It has been
contended on behalf of the appellant that the Generation Order authorised the
Divisional Engineer of the Board to assess the additional feasible capacity of
the captive power source and any other person or authority or Committee could
not usurp this jurisdiction. The impugned letter Annexure `H' issued by the
Divisional Engineer has been characterised as illegal on the ground that it was
based upon the assessment by the Committee headed by Sri H.K. Aggarwal and not
by the Divisional Engineer. the learned counsel proceeded to say that
immediately after receipt of the intimation by the Board, the Company protested
on 21.5.1975. The Board's reply dated 2.6.1975 has been relied PG NO 989 upon
as showing that the direction was issued on the basis of the assessment of the
Committee and not of the Divisional Engineer. It was also pointed out that
Electrical Adviser and Chief Electrical Inspector to the State Government (the
then incumbent being Sri H.K. Aggarwal) was the appellate authority under
Clause 6 of the Generation Order and could not, therefore, take part in the
original assessment proceeding. The reply of the Board is that the Committee no
doubt inspected the generating sets and discussed the matter with the
consumers, and thus collected relevant data for the purpose of assessment of
the capacity, but the Divisional Engineer while relying on the material
collected, did not mechanically accept the conclusion of the Committee.
He
(the Divisional Engineer) applied his mind before issuing the Order Annexure
`H'. Mr. Kacker further said that the matter did not rest there. After taking
into account the objection raised by the Company the Divisional Engineer took
up the matter afresh and applied his mind independently.
Ultimately
he came to a similar conclusion as is evident by the second direction as
contained in Annexure `O' dated 10.10.1975. The argument of Mr. Kacker appears
to be well founded.
12. On
receipt of the letter Annexure `H' dated 17.5.1975 whereby the Divisional
Engineer directed the Company to generate 2,500 K.W. of electricity by its own
generating sets, the appellant Company protested by its letter dated 21.5.1975
(at page 195 of the Paper Book Vol. II). Mr. Gupta strenuously relied on this
letter which stated that the Company failed to understand as to how its
additional generating capacity had been assessed at 2,700 K.W. It will be
necessary to discuss this letter in some detail later in the judgment while
dealing with another point as Mr. Kacker also has relied on certain statements
made therein. At this stage, however, we should like to point out that the
appellant did not challenge the assessment on the ground that it was not made
by the authority mentioned in the Generation Order; and in the last paragraph
the request made was for "review". The next document referred to by
the learned counsel for the appellant is the letter dated 30.5.1975 (page 305
of the Paper Book Vol. II), wherein the Company stated that:
"as
desired by the Board, we have started generating about 2,000 K.W. additional
power at our generating station tonnes daily for this additional
generation." PG NO 990 Finally a request was made in the letter to the
Superintending Engineer of the Board to recommend the appellant's case for
allotment of additional wagons for transport of coal. Instead of advancing the
appellant's case, the letter shows that the assessment and the direction
mentioned in Annexure `H' were accepted by the Company and steps were taken to
implement the same. Chronologically proceeding, the letter dated 2.6.1975
(Annexure `I' at page 122 of the Paper Book Vol. II) was relied on by Mr. Gupta
as proving the fact that the assessment of additional generating capacity had
been done by the Committee mentioned in the letter dated 28.3.1975 (supra) and
not by the Divisional Engineer as required by the Generation Order. The learned
counsel far the parties next placed before us the letters dated 3.6.1975
(document no. 3 at page 302 of the Paper Book Vol. II) and dated 4.6.1975
(document no. 1, at page 300 of the Paper Book Vol. II), another letter of the
same date (Annexure `J' at page 123 of the Paper Book Vol. II) and then dated
8.8.1975 (Annexure `K' at page 132 of the Paper Book Vol. II) and 1().10.1975
(Annexure `O' at page 136 of the Paper Book Vol. ll).
13.
The argument of Mr. Kacker has been that the Divisional Engineer applied his
mind independently to the question of assessment of the capacity of the
appellant's generating sets, and while so doing took in consideration the
factual data collected by the Committee mentioned in the letter of 28.3.1975.
It was pointed out that all the three persons constituting the Committee were
very highly placed officers and there could not be any legitimate objection if
the Divisional Engineer referred to the data collected by them in presence of
the Company's Officers after personally verifying them. Even a judicial
tribunal or a regular court is allowed to rely upon evidence collected by an
enquiry officer or commissioner. The learned counsel heavily relied on the
letter dated 3.6.1975 from the Divisional Engineer to the Superintending
Engineer (document no. 3). On behalf of the appellant it was said that the
Company had no knowledge of this letter in 1975. We do not think that this is a
correct stand. The letter mentions an inspection of' the Company's power House
by the Divisional Engineer and the materials supplied by the Company to him.
The
details with respect to the boilers of the Company and the other figures
mentioned therein correctness whereof is not challenged by the appellant, fully
establish that the inspection was made in presence of and the figures were
collected with the assistance of the officers of the appellant Company and the
conclusion regarding the assessment was reached after taking into account the
case of the Company. It has been argued on behalf of the Board before us that
the method adopted by the Divisional Engineer as disclosed by this letter
(document No. 3) was different PG NO 991 from that followed by the Committee,
as a result of which there was some difference in their final result. On the
basis of his independent assessment the Divisional Engineer issued another
instruction as contained in Annexure 'O' dated 10.10.1975 (at page 136 of the
Paper Book Vol. II), mentioned earlier. This second direction which was
effective from 31.10.1975 naturally superseded the earlier one under Annexure
`H'. The Board's impugned demand does not relate to any period before
31.10.1975 and, therefore, it is immaterial if the direction in Annexure 'H' is
completely ignored on account of its supersession by Annexure 'O' or on any
other ground and it be assumed that in absence of a feasible assessment of the
capacity, the Generation Order was not applicable to the appellant Company
before 31. 10. 1975.
14.
Mr. Gupta relied on the letter dated 4.6.1975 (document No. 1), referred to
above, for showing that the Company emphatically protested against the
assumption that it could generate additional 2500 K.W. It was said that its
capability in this regard was limited to 1200 K.W. The learned counsel referred
to the other letters also for a similar purpose. We think that in view of the
revised order of the Divisional Engineer passed on 10.10.1975, vide Annexure
'O', earlier correspondence is not material for the purpose for which the
appellant is trying to use them. The learned counsel for the respondent has
relied on some of them for his argument on the other points and we will have to
deal with them again when we take up those points. So far as the question as to
whether an assessment of the feasible capacity of the generating sets of the
appellant Company was made by the Divisional Engineer as required by the
Generation Order is concerned, we have no hesitation in deciding the issue in favour
of the respondent.
15. On
behalf of the appellant it was urged that since the Electrical
Adviser-cum-Chief Electrical Inspector of the State Government who has been
mentioned as the appellate authority under Clause 6 of the Generation Order was
associated with the assessment by acting as a member of the Committee (vide
Annexure 'R-1' at page 256 of the Paper Book Vol. II), the entire process in
this regard should be held to be completely vitiated. In view of our finding in
the preceding paragraph, the argument has to be rejected.
Besides,
it is not correct to assume that an appeal against the assessment was provided
by Clause 6 of the Generation Order which reads as follows:
"6.
In case of any dispute between the consumer and the Divisional Engineer acting
under Clauses 3, and 4, it shall PG NO 992 be referred to the Electrical
Adviser and Chief Electrical Inspector to the Government of Madhya Pradesh
whose decision shall be final." The above is obviously an arbitration
clause in case of a dispute and since the maintainability of the appellant's
writ application before the High Court was decided in its favour, it cannot
make a grievance on this score. Besides, if the appellant Company had a
grievance against the assessments which were made in 1975, it ought to have
challenged the same then and not to have waited for a number of years before
approaching the High Court.
16.
Mr. Gupta challenged the assessment still on another ground. He contended that
while making the assessment, the relevant factors were ignored, and irrelevant
and extraneous considerations were taken into account. The argument which is
based on certain scientific technical hypothesis proceeded thus: The Company
had 3 Generator Sets described as M.V. Turbo Generator Set, B.B. Turbo
Generator Set and AEG Turbo Generator Set; and five Boilers. Another Boiler was
added in 1977. Every generator set has a rated capacity which has been
described by the learned counsel as the level at which operation can continue
satisfactorily for indefinite period. This rated capacity is declared by the
manufacturer and can be accurately ascertained without difficulty. The terms
'overload' and 'overload capacity' have been explained by the learned counsel
as "one exceeding the level at which operation can continue satisfactorily
for an indefinite period" and "excess capacity of a generator over
that of its rating", respectively. It was urgued that overloading may lead
to distortion or to overheating with risk of damage, depending on the type of
circuit or device, and so in many cases only temporary overloads are
permissible. The overload capacity, it has been said, is referrable generally
for a specified time. The criticism against the report of the Committee is that
the Committee took into account the overload capacity of the sets and not the
rated capacity. Mr. Gupta stressed on the point that the AEG Turbo Generator
Set was maintained as a standby to be operated only when other sets were not
available for any reasons. He also said that the feasible generation capacity
of a set is also dependent on other factors and conditions, namely, age and
condition of the set, availability of coal of requisite quality and
specification, adequate and continuous supply of water etcetera. Referring to
the report of the Divisional Engineer dated 3.6.1975 (document No. 3 at page
302 of the Paper Book Vol. Il) it was argued that the Divisional Engineer
picked out a moment of time when the plants reached the generation PG NO 993 of
7500 K.W. and concluded therefrom that the appellant was capable of generating
1800 extra K.W. from its captive plant. It was further suggested that in any
view of the matter on the basis of the aforesaid opinion of the Divisional
Engineer the appellant Company ought to have been asked to generate only 1800
K.W. more and not 2500 K.W.
Finally
it was argued that the Board has to be confined to the reasons in support of
the assessment orders which are mentioned therein and cannot be allowed to
travel beyond the same.
17.
Mr. Kacker took great pains in going into the reports and specially through the
aforementioned report of the Divisional Engineer dated 3.6.1975, with a view to
meet the criticism of the appellant and support the report as a correct one on
merits. He also relied on a number of letters sent by the appellant showing
that the assessment was accepted as binding on it and claiming from time to
time benefits under Proviso (iii) to Clause 3 of the Generation Order which was
allowed for a number of years. The learned counsel relied on this aspect as
furnishing strong circumstantial evidence in support of the correctness and
binding nature of the assessment impugned belatedly when the appellant
approached the High Court.
18. It
is significant to note that at no point of time either in 1975 or later the
appellant chose to get a scientific assessment of its generating sets made by
an expert, nor even after filing the present writ petition in the High Court
did it file any opinion of a person having scientific expert knowledge showing
the impugned assessments to be erroneous or undependable. It is also important
to appreciate that the appellant has not either earlier or now made any
complaint of mala fides or bias against any of the members of the Committee or
the Divisional Engineer or for that matter against any officer of the
respondent Board or the State. On the other hand, the Officers of the Board
appear to have taken a very sympathetic attitude towards the appellant for more
than four years and allowed it the benefit of additional energy under Proviso
(iii) to Clause 3 of the Generation Order very generously. It was only when the
Board discovered in 1980 that the appellant had stopped even informing the
Board and obtaining its prior approval as envisaged by the Generation Order
before consuming extra energy that the matter was closely examined by the
Board's Officers. Mr. Kacker is also right in relying upon the conduct of the
parties for about four or five years after the assessment was made as
furnishing important circumstance relevant to the issue. We may, therefore,
examine a number of letters in this regard some of which have already been
mentioned earlier.
PG NO
994
19.
The very first letter of the appellant Company after receiving the impugned
direction in Annexure 'H' dated 17.5.1975 was sent within 4 days on 21.5.1975
and is included at page 195 of Vol. II of the paper book. It will be seen that
the protest against the assessment referred to by the learned counsel for the
appellant was not founded on any of the grounds pressed know. The basis was
"only due to steam limitation", assuring that "once our boiler
under erection starts steaming, we can enhance our generation to the full
installed capacity." The prayer in the end of the letter was to
"review the whole matter". The Divisional Engineer, as mentioned
earlier, personally examined the entire matter be novo. Although in its letter
dated the 21st May 1975 the Company had stated that it was not advisable to
generate more than 12 K.W. from its own sets, by the next letter dated
30.5.1975 (page 305, Vol. II) the appellant informed the Board that they were
generating about 2000 additional K.W., but were in the need of additional coal,
for which the Board was requested to make a recommendation.
In
Annexure 'J' dated 4.6.1975 (page 123 Vol. II) the protest against the
assessment was once more reiterated on account of some trouble with the
boilers. The first paragraph of this letter indicates that the question was
under discussion of the Divisional Engineer with the Company's representatives
who was armed during the conference "with all relevant records". In
this background the fresh independent assessment was made by the Divisional
Engineer as per the document No. 3 dated 3.6.1975 (page 302, Vol. II). Before
the fresh independent direction by the Divisional Engineer as contained in the
impugned Annexure 'O' dated 10. l0.1975 was issued, a suggestion was made on
behalf of the Board to the appellant Company for its satisfaction as to the
correctness of the assessment by "actually taking the load on the set,
after running it in parellel with the Board's supply system". The learned
counsel for the parties before us explained the scientific implications of the
test by "parellel running", but we do not consider it necessary to go
in its technical details.
The
Board requested the Company's consent for such a test, to be communicated
positively within a week. By its reply dated 25.8.1975 Annexure 'L' (page 133,
Vol. II) the Company rejected the suggestion on two grounds, namely, that it
was "not having protection system like power relay etc. "and" in
case of tripping of Board's supply we would be doing the parellelling of the
sets"; which was not safe. In reply thereto the Board satisfactorily met
the objections by its next letter Annexure 'M' dated 25.10.1975 (page 134, Vol.
II). It was pointed out that the parellel running test will be undertaken only
for a short period after which the captive sets would be separated from the
Board's system; and a disturbance free period could be chosen for the same.
Besides,
the objections to the suggested test have to be PG NO 995 rejected as frivolous
in view of the stand of the Company itself as indicated in the letter Annexure
'N' (page 135, Vol. II) dated 6.11.1975, stating that it had no objection into
the suggested trial, which the appellant claims to have sent to the Board which
fact is however denied. In the meantime the second assessment order under
Annexure 'O' had already been communicated. It was, therefore, open to the
appellant either to accept and act upon this fresh assess-of the boilers in
steam generation as the ground for not being able to generate additional
electricity as required by the impugned directions. It was also mentioned that
after a sixth boiler became available, the difficulty would stand resolved. In
this background Mr. Kacker placed before us several letters starting with the
letter of the Company dated 14.2.1977 (at pages 4 to 8 of additional paper book
PG NO 996 prepared and filed by the respondent Board, which was referred to by
the learned counsel as Vol. IV of the Paper Book). The Company, by this letter
requested the Board to charge at the normal tariff for the additional
electricity consumed by the Company as emergency supply as per Proviso (iii) to
Clause 3 of the Generation Order. The statements made in the letter appear to
be extremely important for the purpose of the Board's case and it may be useful
to consider them in some detail.
21. In
the first paragraph the Company stated that it was again placing for the
Board's consideration, the reasons why it could not generate the additional
power according to the direction issued. In the second paragraph the main
difficulty has been mentioned as steam limitation and reason therefor has been
stated in the third paragraph as the inferior quality of coal. Later it was
stated thus;
"These
problems would not have arisen in case our Sixth Boiler recently erected was
commissioned and running without any trouble." It was said that although
the sixth boiler was taken in August, it did not work properly for some time.
Proceeding further the letter stated:
"It
is only since the beginning of January the Sixth Boiler has been in continuous
service, as a result of which we were in a position to repair our other Boilers
also.
Since
the last week of January, we are generating our full requirement and not even
availing the 6U0 K.W. allowed by the Board.
In the
penultimate paragraph of the letter, the case for normal tariff on the
additional electricity already supplied by the Board was argued in the
following manners:
"Considering
all the above facts, we sincerely hope, that as due to no fault of our own we
had to take power from M.P. E.B., more than allotted to us, it is requested
that the charges made to us may be on the usual terms as previously granted by
the Board for which we will be ever grateful. " (emphasis added) The
letter is not only conspicuous by the absence of the objections which were
taken later in 1980 before filing of PG NO 997 this writ case, but it positively
indicates that the Company accepted the assessment as correct, and as expected,
it was actually able to generate the required additional electricity after the
addition of the sixth boiler and was pleading for normal tariff for the
additional electricity already consumed earlier. This position is re-inforced
by several further letters of the Company, but before we go to them we would
like to point out another very important fact emerging out of this very letter.
At page 7 of Vol. II of the paper book the letter dealt with another aspect
highly relevant to the present dispute. Another Limited Company known by the
name of "Gwalior Rayons" is having a factory near the appellant
Company's factory and the appellant was supplying electric energy to the other
factory illegally and without the permission of the Board. On an objection by
the Board this matter was dealt with in the following words:
"It
is not out of place to mention in this appeal that we had given now and then
some power in the past to the Gwalior Rayons, in emergency for their Beam
Dyeing Plant whenever M.P.E.B. power failed. This was due to the fact as the
Beam dyeing plant is a pressure dyeing plant, with a continuous process, there
used to be heavy damage to very costly Beams. Since this issue was raised by
your Divisional Engineer, we have completely stopped this type of supply to
them, though the same was given to them after reducing our humidity or waste
plant load.
It is
again our request here that the same may be allowed in emergency under whatever
arragement the Board may so decide to avoid costly damage to the cloth.
A
fervent appeal in the interest of the other factory belonging to a different
Limited Company altogether was made in the above terms. It has to be remembered
that in view of the provisions of s. 28(1) of the 1910 Act, the Company was
prohibited from supplying any energy to the other factory.
This
aspect was stressed in term 2(b) of the agreement between the appellant and the
Board as per Annexure 'A (page 62 of Vol. II). It was not the appellant's case
then or before us now that it had obtained the previous sanction of the State
Government for so doing. Under Cluase 4 of the Generation Order which reads as
follows, jurisdiction was vested in the Divisional Engineer ot the Board to
direct a consumer having captive source of power to supply electricity to the
Board or to any other consumer only if the consumer was having surplus
generation:
PG NO
998 "4. If the consumer having own generating set(s) can have, a result of
additional generation reasonable in the opinion of the Divisional Engineer of
the Board having jurisdiction, energy, surplus to his requirement, the
Divisional Engineer may direct him to supply the surplus to the Board or to
another consumer nearby who has been taking supply from the Board and who is
willing to take the supply from the consumer having generating sets:
Provided
that
(i) the
contract demand of and the supply to the other consumer from the Board shall be
reduced correspondingly, whether or not the other consumer avails of the supply
from the consumer having the set,
(ii) the
other consumer shall pay to the consumer having generating set(s) for such
supply as if it is supplied from the Board,
(iii)
if the payment receivable by the consumer having the set under the last
preceding clause is less than his incremental cost of additional generation,
the Board shall make good the difference to the consumer having the set(s) and
(iv) the
consumer having the set(s) will not be required to incur any additional
expenditure for laying lines for transmitting energy to the other consumer;
such lines if required being laid by and at the cost of the Board."
How
could, in these circumstances, the appellant pass on to a third party some of
the electricity meant for it, there is no explanation on the records. Mr. Gupta
the learned counsel for the appellant argued that since the other factory was
in the neighbourhood it was in the interest of the appellant Company for the
sake of security to see that other factory was not plunged in darkness when the
supply was inter-rupted on account of tripping. Mr. Kacker rightly pointed out
that no such suggestion was ever made on behalf of the appellant in any of its
letters. On the other hand, the reason pleaded in the letter quoted above was
to save the other Company from incurring loss due to costly damage to the
cloth. In his final reply Mr. Gupta said that the appellant was passing on some
electricity to the Gwalior Rayons only after reducing its humidity or waste
plant load as stated in the letter. The explanation is too vague and it cannot
be PG NO 999 assumed that the appellant was making the contribution to its
sister concern by creating artificial shortage of supply to its mills. The
appellant's conduct cannot be explained except on the premise that it was able
to generate adequate additional electricity for its purpose and was taking for
granted the sympathetic attitude of the Officers of the Board in liberally
allowing it additional emergency supply at normal tariff.
22.
Another letter which calls for a detailed consideration was sent by the appellant
on 30.5.1979 and is included at pages 16 to 20 of Vol. IV. A fresh request for
emergency supply under Proviso (iii) to Clause 3 of the Generation Order was
made in this letter on the ground that the sixth boiler was out for annual
overhaul. It was stated in the opening sentence that this boiler was giving
some trouble earlier but later 'stabilised'. The Company was, therefore,
self-sufficient "without drawing any power from the Board so far".
The letter proceeded to state that the sixth boiler would be going for annual
overhaul and after that the annual overhauling of the other boilers would be
carried out; and therefore, 1875 K.W. should be allowed to be drawn for the period
mentioned therein. Assurance about the future was held in the following terms:
Now
when our Sixth Boiler has been stabilised we would normally not draw any power
from the Board after 15.9.1977 when overhauling of all the boilers is complete
except in case of emergency due to outage of any of the boilers.
It was
further requested that during the period of breakdown emergency power as
detailed should be supplied and.
"we
would request you that for the power availed by us from the Board for above
purpose, say up to a total of 7 days in a month. we may be charged at the same
tariff .
Insisting
again that it should be allowed to supply electricity to Gwalior Rayons,
described as its sister concern. the letter read as follows:
"Here
we may also mention that we have been supplying power to our sister concern M/s
Gwalior Rayons. in accordance with the provisions of sanction granted to us
under Section '8 of the I.E. Act vide Govt. Order No. PG NO 1000
1313/6U61/XIII/74 dated 8.4.1975. However. it had not been possible for us to
obtain prior Permission from S.E. Gwalior before switching over power to Gwalior
Rayons. It may be mentioned here that power has to be supplied to M/s Gwalior Rayons
during the period the Board's supply remained off. and it is not practically
possible to obtain prior permission for supply in such cases. We would,
there-fore, request you that prior permission should be given once for all for
supplying power to the Gwalior Rayons during the period supply from the Board
to M/s Gwalior Rayons remained off ' This letter dated 30.5.1977 confirms the
conclusions derived from the earlier letter dated 14.2.1977 and clarifies that
the first letter was not sent by some mistake on the part of the appellant
Company. Request for emergency supply was, however, made from time to time in
1978 and for some time in 1979, which was allowed by the Board. The other
letters including those dated 30.5.1978, 29.6.1978, 7.7.1978 and D 9.9.1978 are
all consistent with a correctly made binding assessment of the feasible
additional capacity from the generating sets belonging to the Company.
23.
Mr. Gupta contended that throughout the period 1975 to 1979 there was never a
demand made by the Board for any energy consumed by the appellant at the penal
rate and it was only in 1980 that the Board suddenly decided to press for the
additional demand on the basis of the Generation Order. The learned counsel emphasised
that before the provisions of the Generation Order can be relied upon by the
Board it is essential for it to make an assessment of the consumer's capacity
to generate electricity from its captive power plant. The fact that no demand
was made for many years leads to the conclusion that such an assessment as
required by the provisions of the Generation Order to be made, had not in fact
been made, and alternatively assuming that factually the capacity had been
assessed, the same must be ignored on account of the conduct of the parties for
several years. The stand of Mr. Kacker, as has been stated earlier, is that the
parties acted on the basis that an assessment had been made in accordance with
the Generation Order and on that basis the appellant demanded the benefit under
Proviso (iii) to Clause (3) of the Order. The documents relied on by him and
discussed in the preceding paragraphs support the respondents' stand. They also
explain as to why demand on the penal rate wa. not made earlier. but it would
be helpful to consider a few more facts relevant to this aspect.
PG NO
1001
24.
The system of supply of power to the consumers is such that they can go on
drawing electricity beyond their entitlement without any further positive step
by the officers of the Board. The Board is, however, in a position to, by
keeping a certain switch known as Air Break Switch open, put a restriction on
the consumer from drawing excess energy. A letter dated 4.6.1975 (document no.
l, at page 300 of Vol. II) sent by the appellant has been strongly relied on by
Mr. Kacker for showing that Air Break Switch was permitted to remain closed
with a view to assure uninterrupted supply of the appellant at its request. The
result was that the appellant was in a position to draw excess electricity
without reference to the officers of the Board. That letter indicates that the
Board was contemplating to keep the switch open and the Company by this letter
made a request not to do so. The appellant Company was fully conscious of the
fact that it was consuming electricity beyond its entitlement under the two
Orders, by claiming the benefit of the provisions dealing with emergency
supply. and was also alive to the fact that this had to be done only with the
prior approval of the Board. The relevant portion of the letter is in the
following terms:
"Further
at no time it may kindly be noted that power has been availed from MPEB without
prior intimation by phone either to Divisional Engineer or Supdt. Engineer. By
keeping the A.B. Switch open at your end, the delay in supply to J.C. Mills
will be considerable which will cause very heavy losses to the J .C. Mills for
no fault of their own. This may kindly be reviewed and ...." The learned
counsel for the Board was right in saying that on account of this request by
the appellant the line was kept open for it unhindered. This did not mean that
the Company was entitled to misuse the privilege, draw extra energy without
prior permission and thereafter refuse to pay higher charges when demanded. It
has been conclusively established by a large number of letters on the records
of the case that for several years the Company was particular in obtaining the
permission of the Board for drawing electricity in excess of what it was
entitled to, by the agreement as modified by the Regulation Order and
Generation Order, but later, it not only stopped seeking the advance sanction in
this regard, it did not even care to inform the Board ot the excess drawal. The
Branch of the respondent Board at Gwalior sent the bills on the basis of the normal tariff, as the question of
grant of additional emergency supply was being dealt with by the Head Office at
Jabalpur.
The Gwalior
Office was not at all dealing with the matter PG NO 1002 relating to the excess
emergency supply which aspect was being exclusively dealt with at Jabalpur, and as soon as the relevant facts
came to the knowledge of the Head Office of the Board it took up the matter
with the appellant Company.
The
entire conduct of the parties furnishes strong circumstantial evidence in
support of the Board's case.
25.
Another argument addressed by Mr. Gupta is based on the letters Annex. `P'
series sent by the Board to the appellant Company from time to time. They have
been included at pages 137 to 156 of Vol.
Il of the paper book, and according to
Mr. Gupta they are inconsistent with the Board's case regarding the appellant's
entitlement to receive the amount of energy from the Board. He has pointed out
that these letters do not suggest that the contract demand had been reduced to
nil in accordance with Annexures `H' and `O'. By way of illustration he relied
on the letter dated 31.10.1975 (at page 138 of Vol. II) stating that the
Company's maximum demand should not exceed 1875 KW".
We do
not find any merit in the submission. The letters marked as `P' series did not
deal with the entitlement of the appellant Company as a result of both the
Orders-- Regulation and Generation. The Regulation Order was ot universal
application to all the consumers while the Generation Order applied to only
such of them who had their own generating sets. Under the Regulation Order the
contract demand was reduced by a certain percentage and provided for payment of
charges at penal rate in case of excess consumption. The rate of cut and the
penal rate for additional consumption did not remain constant, and were revised
from time to time. It appears that as and when the revision in the rates took
place the consumers were informed as to the effect of the Regulation Order as
it stood after modification. Mr. hacker was right in saying that since the
Regulation Order was applicable to all the consumers and letters similar to
those marked as Annexure P' series were being addressed to all of them, there
could not be any objection in the Board sending similar letters to the
appellant and others having their private generating sets dealing with the
effect of the Regulation Order alone, without taking into account the
Generation Order. A perusal of these letters fully supports the respondents'
stand that they were being issued with reference to the Regulation Order alone.
Further, a close examination of the Generation Order would show that the
maximum permissible limit available under the Regulation Order had not ceased
to be relevant even after the application of the Generation Order.
The
entitlement of the appellant due to emergency outage under Proviso (iii) to
Clause 3 ot the Generation Order was limited to the original contract demand as
reduced by the Regulation Order. It was, therefore, important for the PG NO
1003 appellant to keep in mind that at no point of time it could be entitled to
ask for beyond this limit as emergency supply on any ground what-soever. As
this limit fluctuated from time to time on the change in the percentage of
reduction in the Regulation Order, the appellant was rightly reminded of the
latest position in this regard. The learned counsel for the respondents was
also right in saying that these letters could not have misled the appellant in
any manner. The numerous letters discussed earlier clearly indicate that the
appellant correctly appreciated its position and repeatedly made requests for emergency
supply under the Generation Order on the assumption that its entitlement had
been rendered to zero. The appellant's letter dated 30.5.1977 (at page 16 of
Vol. IV) referred to earlier, fully demonstrates that the plea raised by the
appellant is devoid of any merit. A portion of the said letter (not dealt with
earlier) is in the following terms:
"During
the period of break down we would request you to agree to the following
arrangement:
i.
Before availing Board's power during the emergency we will intimate the B.E.,
MPEB, Gwalior as well as S.E.MPEB, Gwalior and send a copy of our letter to the
Director (Com), MPEB, Jabalpur.
ii(a)
In case 6th boiler is out and other boilers arc working satisfactorily we may
be allowed to draw power upto 1200 KW.
(b) In
case 6th boiler is on range and one of our M V boilers is out we may be allowed
to draw power upto l200 KW.
(c) In
case 6th boiler is not and one of our M.V. boilers is also out we may be
allowed to draw power upto 1875 KW.
If
present stand of the appellant be assumed to be correct, there was no occasion
for it to claim varying quantities of power in changing circumstances as
mentioned above.
26. It
was also urged on behalf of the appellant that the Board's letter dated
13.10.1980, Annexure `U', (at page 182. Vol. II) impugned by the appellant is
also inconsistent with the Board's stand in the present case. By this letter
the appellant was informed that the contract demand of 3490 PG NO 1004 KW as
per the agreements between the parties was going to be reduced to 1250 KW under
the provisions of the Generation Order, and on further reduction under the
Regulation Order it would come down to 875 KW only. The appellant was
accordingly directed to draw power upto 875 KW with effect from 1.8.1980. The
Board further informed the appellant that no additional power will be supplied
during the period of overhauling of the private generating sets. This part of
Annexure 'U' has been set aside by the High Court on the ground that under
Proviso (iii) to Clause 3 ot the Generation Order the Board was under a duty to
permit the appellant to draw additional electricity on satisfaction ot the
relevant conditions for emergency supply, which it could not deny. The Board
has not challenged this part of the High Court's decision, and the same is not
relevant for purposes of the present appeal. Reliance on behalf of the
appellant has been placed on the earlier part of the letter directing it to
limit its drawal to 875 KW. Mr. Gupta explained the situation thus: The
contract demand as per the original agreement and the subsequent agreements by
the date on which the letter was issued admittedly was 3490 KW. If the Board's
case that the appellant's capacity to generate electricity from its own sets
was assessed at 2500 KW be accepted as correct, then the appellant would have
been held entitled to draw KW only and not 1250 KW as mentioned in the letter.
Mr. Gupta invited us to consider this aspect along with the Board s earlier
letter Annexure `R' dated 28.12.1979 (page 158 of Vol. II), informing the
appellant that additional power to the extent of l90 KW had been sanctioned.
The admitted position in regard to different agreements between the parties is
that initially the parties entered into a contract with respect to 1500 KW only
which was later raised to 2500 KW. The Regulation and Generation Orders came
into existence at that stage. In July 1979, a supplementary agreement was
executed between the parties for supply of additional 800 KW. and in December
1979 the Board further sanctioned l90 KW. The relevant part of the letter
relied on by Mr. Gupta is quoted below:
"The
Board has sanctioned l90 KW additional power (over and above 3300 KW) at 33 KV
subject to the following conditions:
(1)
The Contract Demand shall be reduced in terms of Govt. Control Order No.
1254/2048/XIII/75 dated 4.4.75 after the decision of the Committee headed by
the Electrical Adviser & Chief Electrical Inspector to Govt. of M.P.
regarding re-assessment of the capacity of the consumer's generating set is known."
PG NO 1005 The argument is that the Board could mention about a Committee
proceeding to assess the capacity of the consumer's captive plant only if there
had not been earlier any assessment. The reduction in the contract demand under
the Generation Order should have been made after the assessment work was
completed, but as a matter of fact, no such assessment was made and ultimately
the letter Annexure `U' dated 13.10.1980 was issued arbitrarily without any
basis. In absence of an assessment of the capacity under the Generation Order,
no reduction was permissible.
27.
Mr. Kacker's reply is that since the appellant for the period of more than 4
years was pleading for emergency supply from time to time on one ground or the
other, an internal Committee of Superintending Engineers which had visited the
Company's plant on 25.9.1980 suggested that the appellant Company be granted
additional power to the extent of 260 KW on regular basis instead of examining
the grounds relied upon by the appellant every now and then. The latter part of
the letter informing the appellant that it would not in the future be supplied
additional power on the ground of emergency has been referred to in support of
this argument.
Mr. Kacker
further said that unfortunately the Board was held liable for the emergency
supply if the necessary conditions were satisfied and thus the appellant has
got double advantage and this cannot be the basis for accepting the appellant's
case. The learned counsel proceeded to say that the letter Annexure `R' was
issued in connection with the sanction of 190 KW additional power, subject to
the Government Orders, and the reduction there under was only a matter of
arithmetical calculation which should have been done without reference to a
Committee. The letter was not sent in connection with any controversy about the
assessment of the generating capacity under the Generation Order, and it cannot
be interpreted in the manner as suggested on behalf of the appellant. It was
further pointed out that admittedly there was no question of a committee headed
by the Electrical Adviser and Chief Electrical Inspector to the Government of
Madhya Pradesh to make a fresh assessment under the Generation Order or to
undertake the realistic assessment of the additional capacity over again. The
assessment had to be made by the divisional Engineer of the Board. It was
lastly said that this argument addressed by Mr. Gupta before this Court was not
advanced before the High Court nor was the point taken in the writ petition or
any affidavit there. On a consideration of the documents and the re,levant
circumstances we agree with Mr. Kacker. The use of the word
"re-assessment" in the letter quoted above instead of
"assessment" also supports the respondents' case. The term
"re-assessment" implies that there had already been an PG NO 1006
assessment earlier. Even interpreting the letter as suggested by Mr. Gupta, the
existence of the earlier assessment by the Divisional Engineer cannot be
ignored. If the appellant was not satisfied with it, it should have taken
appropriate step for getting the same quashed in 1975 itself and should not
have waited for four or five years before approaching the High Court, and in
the meantime taking the benefit of the provisions regarding emergency supply on
its basis.
28.
Now in this background let us come back to the argument of Mr. Gupta as
mentioned earlier in paragraph 16 above. In reply Mr. Kacker asserted that it
is not correct to assume that a machine can function on a regular basis only
according to the rated capacity as declared by the manufacturer. By way of
illustration he relied upon the specifications relating to a machine issued by
the Bharat Heavy Electricals Ltd. indicating that the "Peaking capacity'
of the machine with "No time limit" was higher than the "rated
output" mentioned. The learned counsel also analysed the report of the
Divisional Engineer along with the data mentioned by the Committee which in his
opinion indicated that the maximum capacity of the appellant's sets technically
feasible was much more than that actually assessed and could not be less by any
calculation even before the 6th boiler was erected. After the sixth boiler
became available the capacity rose to at least 9700 KW but the Board taking a
generous view did not call upon the appellant to generate further additional
electricity than that directed earlier.
29. We
have heard the learned counsel at considerable length on this aspect and we
think that the question as to what should be considered the correct feasible
capacity of the appellant's sets is one involving complex technical knowledge
and the High Court (or for that matter this Court) was well advised not to have
attempted to determine it. We must reiterate the circumstances which appear to
be highly relevant, namely,
(i)
that the Divisional Engineer who has been rightly considered by the Generation
Order to have sufficient expert knowledge in this regard reached the conclusion
which is under challenge in the present case after personally considering the
matter thoroughly along with the Officers of the Company as is apparent by many
of the letters;
(ii) the
figures collected by the members of the Committee are not challenged as
incorrect or inaccurate;
(iii)
it is not suggested that any of the members of the Committee or the Divisional
Engineer or for that matter any Officer of the respondent Board or of the Stale
Government had any prejudice or bias against the appellant Company;
PG NO
1007
(iv) the
appellant did not get an independent assessment of its generating sets made by
any person having expert knowledge;
(v) the
appellant avoided to get the correctness of the assessment verified by the parellel
running test as suggested by the Board; and
(vi) the
conduct of both the appellant and the respondent Board as emerging from the
documents placed by the parties on the records of the case furnish valuable
circumstantial evidence in support of the respondents' case. The argument of
the appellant challenging the assessment as illegal must, therefore, be
rejected.
30.
Mr. Gupta by way of an alternative plea pressed an argument for granting a
limited relief. He urged that even assuming that the assessment of maximum
feasible capacity of the appellant's sets was correctly made in 1975 so as to
be binding on the appellant, it is fully established even by the letters of the
Board that the position stood materially altered by November 1979 which called
for a re-assessment.
The
Board s letters dated 27.11.1979 (page 157 Vol. II) and 28.12.1979 (page 158,
Vol. 11), according to the learned counsel. indicate that irrespective of
whether the initial assessment was good or not, the Board accepted the position
that steps for re-assessment had to be taken and after taking into account the
circumstances, decided to grant an ad hoc benefit of 260 KW by its letter
Annexure `U' dated 13.10.1980 (page 182, Vol. Il), discussed earlier.
Although
the appellant does not agree that the grievance of the appellant was properly
met by the grant of the additional 260 KW but since this was allowed by the
Board itself, the relief should have been granted with effect from November
~979 and not from 1.8.1980 as mentioned in Annexure `U'. The plea of the
respondent that this additional power was allowed on account of the recurring
demand by the Company for emergency supply under Proviso (iii) to Clause 3 of
the Generation Order has been challenged as incorrect. It is urged that the
letter Annexure `U' granting additional 260 KW over and above 875 KW the
appellant was held entitled to draw, must be read in the background of Annexure
Q dated 27.11.1979 (page 157, Vol. II) and Annexure 'R' dated 28.12.1979 (page
158, Vol. II). These letters have been discussed earlier while dealing with
another argument. The argument of the appellant is that the Board had recognised
the need of re-assessment of the capacity and had decided to entrust the work
to a committee and it must be presumed that the team must have submitted some
report. However, no such report has been placed by the Board on the records of
this case and the suggestion is that it is a case of suppression by the
respondent and the Board cannot be heard to say that the team did not go i~ e
question of re-assessment. Since the matter was raised by the appellant in
November 1979 PG NO 1008 which ultimately resulted in the partial relief up to
260 KW about 11 months later, the benefit ought to have been allowed with
effect from November 1979 if not earlier. The stand of the Board with respect
to this additional 260 KW has already been mentioned earlier. It is argued by
the Board that the Generation Order contemplates only a single assessment
leading to a single direction and the appellant was not entitled to
re-assessment. The word "re-assessment" in Annexure 'R' was,
according to the respondents, mentioned due to inadvertence or under a
misconception of the exact legal position. In any event the additional energy
was allowed as the result of the repeated demand by the appellant for emergency
grant. With a view to meet the situation which was arising every now and then a
generous attitude was taken to allow additional 260 KW. It is contended that no
further claim can be legitimately founded on this act of generosity. As a
result of the High Court's decision the appellant's claim for emergency supply
was being considered on merits. The appellant is thus having the advantage of
the double benefit with effect from 1.8.1980.
because
the Board has neither appealed against that part of the High Court judgment,
nor has it withdrawn the special benefit of 260KW, but a further claim cannot
be allowed on account of this sympathetic attitude. In view of our finding that
a proper and binding assessment of the capacity of the appellant's generating
sets was made in 1975 by the Divisional Engineer in pursuance of which the
direction in Annexure O was issued and in view of the further fact that on that
basis the appellant from time to time asked for and was allowed emergency
relief under proviso (iii) to Clause 3 of the Generation Order, the argument of
Mr. Kacker appears to be correct. The appellant has, in our view. failed to
establish any right ot additional relief from an earlier date.
31.
The next point taken on behalf of the appellant is that there is no sanction in
law for charging at the penal rate for the electricity consumed beyond what is
permissible on application of the Generation Order. Section 22B of the 191()
Act confers powers of framing subordinate legislation on the State Government
for the purposes and to the extent mentioned therein and consequence of contravention
of any such Order is provided in s.42 (e) mentioned below:
"42.
Whoever .......................................
(e) makes
default in complying with any order issued JIYAJEERAO COTTON MILLS v.
ELECTRICITY BOARD [SHARMA. J ] 1009 to him under section 22B or sub-section (2)
of section 34; shall be punishable with fine which may extend to one thousand
rupees, and, in the case of a continuing offence or default, with a daily fine
which may extend to one hundred rupees." The argument is that s. 22B cannot
be so construed as to include a delegated power to impose penalty of the
delegate's choice for the contravention of an order issued under the Section.
Since the legislature itself exercised its legislative power in that field by
including s. 42 in the statute, the State had or has no authority to take any
further step for the enforcement of its Order, except by resorting to s. 42.
Dealing with s. 78-A of the 1948 Act which says that in the discharge of its
functions, the Board shall be guided by such directions on questions of policy
as may be given to it by the State Government. Mr. Gupta contended that it
cannot be interpreted to effectively clothe the State to direct the Board to do
a thing which it is itself nOt empowered to do. The Board, therefore. should
have either prosecuted the appellant under s. 42(e) or disconnected the
electric supply altogether, but it was not entitled to demand penal charges.
Mr. Kacker countered by saying that s. 42 of the 1910 Act belongs to the group
of sections 39 to 50 dealing with Criminal Offences and Procedure as is
apparent by the heading just above s. 39, and deals with the criminal liability
only. The same set of events may give rise at the same time to civil rights as
well as to a criminal offence and it is not correct to suggest that merely
because provisions arc specifically included in the Act dealing With criminal
liability, the civil liability is deemed to have disappeared. By way of
illustration, a simple case of theft ot movable article may be considered: the
owner ot the property can set the criminal law in motion and at the same time
may claim the property or compensation for it under the civil law. Mr. Kacker
appears to be right in his stand that merely because the appellant became
liable to the penalty as mentioned in s. 42(e) it cannot on that ground defend
an additional demand on account of supply of the extra energy , if otherwise
maintainable under the law. Besides, s. 48 puts the matter beyond controversy
by expressly stating that the penalty imposed by the aforesaid section shall be
in addition to, and not in derogation of, any liability in respect of the
payment of compensation which the offender may have incurred.
32.
While commencing his argument, Mr. Gupta had indicated that one of the points on
which the appellant relied upon, related to the validity of Clause 3 of the PG
NO 1010 Generation Order mandatorily requiring a consumer to generate maximum
feasible electricity from its own generating set. It was suggested that the
provisions in the said Clause being in excess of the power under s. 22B, were
ultra vires. After completing his argument on the other points he said that he
was not pressing this point. Mr. Kacker, therefore, did not address us on this
aspect. We may not in these circumstances detain ourselves on this question
except mentioning the decisions in Adoni Cotton Mills v. A.P. State Electricity
Board, [1976] 4 SCC 68; State of U.P. v. Hindustan Aluminium Corporation,
[1979] 3 SCC 229; and New Central Jute Mills v. U. P. State Electricity Board,
[1986] Supp. SCC 581, showing in unambiguous terms that the power is there. S.
22B permits the State Government to issue an appropriate order for regulating
the supply, distribution and consumption of electricity The expression
"regulate ' occurs in other statutes also, as for example, the Essential
Commodities Act, 1955, and it has been found difficult to give the word a
precise definition. It has different shades of meaning and must take its colour
from the context in which it is used having regard to the purpose and object of
the relevant provisions, and as has been repeatedly observed, the Court while
interpreting the expression must necessarily keep in view the object to be
achieved and the mischief sought to be remedied. The necessity for issuing the
two Orders arose out of the scarcity of electricity available to the Board for
supplying to its customers. The situation did not leave any option to the Board
but to make limited supply of electricity to its consumers, and it must be held
to have, in the circumstances the right to stagger or curtail the supply. The
Orders were issued in this background and to make the direction mentioned
therein effective it was considered essential to impose sanctions which could
take any reasonable form; either disconnection in case of gross violation or
the lesser sanction of enhanced tariff. By the Order issued under s. 22B and
quoted in paragraph 7 of the judgment in Adoni Cotton Mills case (supra) the
State Government directed a reduction in supply of electricity to the extent of
75% of the previous average monthly demand and provided for payment of the
charges for excess consumption at double the tariff rates.
The
Electricity Board thereafter proceeded to impose further restrictions.
Aggrieved by these measures the Adoni Cotton Mills, an aggrieved consumer
approached the Court, but its challenge was repelled. On behalf of the
appellant Mr. Gupta attempted to distinguish the decision on the ground that
the fixing of a higher tariff for the excess consumption was against public
policy and that this aspect was not considered by this Court in Adoni Cotton
Mills case. We do not find any merit in this argument. The demand of higher
charges/tariff PG NO 1011 for electricity consumed beyond legally fixed limit
is a reasonable deterrent measure providing an appropriate sanction--not as
harsh as disconnection of supply of energy altogether--and cannot be opposed on
the ground of public policy. We, therefore, hold that none of the two Orders is
illegal or unreasonable.
33.
Mr. Gupta alternatively contended that the provisions fixing the electric
charges at 4 times the normal tariff for the excess consumption are to be found
only in the Regulation Order and since there is no corresponding provision in
the Generation Order, there is no sanction for demanding the penal rate for the
electricity consumed in contravention of the Generation Order. He proceeded to
say that there is no language in either of the two Orders to link them with
each other. The different measure taken under the two Orders operate under
different conditions and circumstances, and they cannot, therefore, be lumped
together. In reply to the argument of Mr. Kacker that since the Schedule to the
Regulation Order refers to the 'contract demand' which expression denotes the
original contract demand as reduced by the provisions of both the Regulation
Order and the Generation Order, leading to the conclusion that the provisions
regarding the payment of penal charges take into account both the Orders
together, Mr. Gupta contended that although it is true that by reason of the
Generation Order the contract demand is reduced but it cannot be said that a
new contract comes into existence for the reduced amount to justify the
argument of Mr. Kacker, because the reduction is as a result of operation of
law. In other words, the reduced amount cannot be termed as 'contract' demand
as it is in supersession of the contract demand. The contract demand,
therefore, remains the same as before although there is introduced a statutory
bar from drawing it in full measure. Applying this logic, it was argued by the
learned gcounsel that the Generation Order has to be kept apart while working
out the effect of the Regulation Order. He also referred to the subsequent
Regulation Order of 1978 in which the relevant Schedule prescribes 50 KW as the
minimum entitlement which is inconsistent with the Board's case. It is urged
that the argument on behalf of the Board that the two Orders have to be read
together must, therefore, be rejected.
24.
The reply of Mr. Kacker is three-fold: he point was not taken in the writ
application before the High Court nor in the grounds before this Court and
since it is not a pure question of law it should not be allowed to be raised in
the argument; (ii) the two Orders were issued on the same date with the common
object to remedy the same problem as is evident from their preambles and so
they cannot be read in PG NO 1012 isolation; and (iii) in any event the
Electricity Board in levying and making the impugned demand must be deemed to
have exercised its power under s.49 of the 1948 Act which it is certainly
entitled to.
Mr.Gupta
said that it was not right to suggest that the point was not raised in the High
Court. He placed before us the review petition filed in the High Court after
the disposal of the writ case and relied on the statement in paragraph 3 of the
judgment disposing of the review petition. He stated that the written arguments
of the Company consisted of three parts under the heads 'list of dates, notes
of argument' and a 'reply'. Mr. Gupta fairly conceded that the point was not
taken in the writ petition before the High Court and he was not in a position
to assert that it was actually argued on behalf of the Company in the first
argument addressed before the High Court. but he claimed that the Company did
press the point during the final reply. He could not deny that the point was
not taken when the present appeals were filed in this Court. The judgment of
the High Court does not deal with the point. In the circumstances, the question
arises as to whether the question should be allowed to be urged now and if so
how should it be answered .
35 Mr.
Gupta contended that merely because the two Orders are issued under the same
provision of law on a particular date, they cannot be dovetailed. The
similarity in the preamble of the two Orders is described as not great
consequence as it merely borrows the language from s.22B.
Many
Orders are issued under s. 3 of the Essentila Commodities Act,the argument
proceeds, and it cannot, there fore, be suggested that the penalty imposed in
one has to be applied to the other without express language to that effect in
either of two Orders. We do not think in view of the fact that the point was
not taken on behalf of the Company while instituting the writ application in
the High Court and filing the present appeals in this Court, it should be
allowed to be urged at the hearing. Let us assume that the argument of Mr.
Gupta is correct. Immediately the next question would arise as to whether the
Board is otherwise authorised in law to levy and demand charges for the excess
electricity at the higher rate and if so whether the Board can be said to have
exercised its power in this regard. Mr. Kacker contended that apart from the power
of the state Government to limit the supply of electricity to the consumers by
an order under s. 22B and direct payment of penal charges for excess
consumption, the Board is also empowered to impose sanctions by charging
enhanced tariff and the authority to do so is derived both under s. 49(3) PG NO
1013 of the 1948 Act and s. 49(1) read with the original argeement. The
relevant provisions are quoted below:
"49.
Provision for the sale of electricity by the Board to persons other than
licensees.
(1) Subject
to the provisions of this act and of regulations, if any, made in this behalf,
the Board may supply electricity to any person not being a licensee upon such
terms and conditions as the Board thinks fit and may for the purposes of such
supply frame uniform tariffs.
(2)
....................................................
(3)
Nothing in the foregoing provisions of this section shall derogate from the
power of the Board, if it considers it necessary or expedient to fix different
tariffs for the supply of electricity to any person not being a licensee,
having regard to the geographical position of any area, the nature of the
supply and purpose for which supply is required and any other relevant factors.
(4) In
fixing the tariff and terms and conditions for the supply of electricity, the
Board shall not show undue preference to any person.
Reliance
was placed on several decisions of this Court of the High Courts. It was
further contended that it is not essential for the Board to frame regulations
tot the exercise of such power. The leaned counsel appears to be right. In Adoni
Cotton Mills ' case (supra) the State Government had made an order under s. 22B
of the 1910 Act limiting the supply to 75% of the previous consumption as was
done in the present case and directed the payment of punitive rates for excess
consumption. The Board made supplementary orders for placing further onerous
conditions on certain groups of consumers. This was challenged before the High
Court inter alia on the ground that since the State Government had already
acted under s. 22B, the Board could not further pass supplementary orders and
that in any event since the Board had not made regulations laying down the
principles under s. 79(j) of the 1948 Act, the orders were bad. Both the points
(along with several others) raised by PG NO 1014 the appellant in that case
were rejected by this Court.
Referring
to s. 49(1) of the 1948 Act, the Court observed that the power to enhance the
tariff is included in the Section and the expression that "the Board may
supply electricity .. upon such terms and conditions as the Board thinks
fit" in s. 49(1) iS related to the terms and conditions of the agreement
between the parties. Sub-section ( 1) confers power on the Board to supply
electricity upon such terms and conditions as it thinks fit and the terms and
conditions include the power of the Board to enhance the rates. S. 49(3)
permits the Board to fix different rates for the supply of electricity having
regard to certain conditions mentioned therin and ''any other relevant
factors". It was held that the expression "any other relevant
factors" could not be considered ejusdem generis because there is no genus
of the relevant factors. In New Central Jute Mills Co. Ltd. v. U.P. State
Electricity Board, (supra) the situation again was similar to the present case.
The
argument pressed before the Supreme Court inter alia was that the Board had no
authority to make the demand in excess of the agreed rate under the agreement.
Repelling the contention, the Court observed in paragraph 4 of the judgment
that the agreement itself did not envision the supply of electricity in
violation of the ban imposed by the State Government in exercise of its power
under s. 22B of the 1910 Act; nor did the agreement stipulate the rate at which
such supply should be charged if notwithstanding the ban against the supply a
consumer drew electricity in excess of the permissible quantity. In the
circumstances, the Board was justified in invoking the power under s. 49(3) of
the 1948 Act which authorised it to supply electricity by charging different
tariff having regard to certain conditions and ' any other relevant
factors". S. 49(3) was interpreted to be wide enough to cover a situation
where electricity in excess of the quantum is drawn in disregard of the ban
imposed under s. 22B of the l9 10 Act. We do not consider it necessary to
multiply the decisions as there does not appear to be any doubt that either
under s. 49(1) of the 1948 Act read with the agreement or under s. 49(3) or
under both the provisions the respondent Board is fully authorised to levy and
to make a demand at a higher rate than the usual tariff. It is also clear that
it is not essential for the Board to make regulations indicating the basis for
such levy before making the demand. The appellant has not been able to
successfully show before us that the power by the Board has to be exercised in
a particular manner and by adopting a particular mode. If it is assumed that a
particular formality has to be completed before a demand can be legitimately
raised, the appellant cannot be allowed to claim now that the same is lacking
in the present case in the absence of a proper pleading in the original writ
petition before the High Court. If the point had been raised in time, the
respondent Board could have placed relevant materials on the issue. If at the
end of the hearing of the case in the High Court the point was mentioned in the
appellant's final reply and included in the PG NO 1015 last instalment of its
written argument, it cannot cure the defect in the pleading specially when the
judgment of the High Court dismissing the writ application does not deal with
the point.
In
that view it is not necessary to test the correctness of the argument of Mr. Kacker
that the appellant's entitlement to receive the quantum of electricity from the
Board at the normal tariff can be determined only by a combined reading of the
two Orders. We do not, therefore, consider it necessary to decide as to what
would have been the precisely correct answer if the point had been properly
raised before the High Court at the appropriate stage.
36. We
do not find any merit in any of the points urged on behalf of the appellant. We
were informed by the learned counsel for the parties that the appellant does
not accept the correctness of the calculations in the letter 'P' series and the
question is being examined by the High Court in a pending case. The appellant
also asserts that even during the period commencing from November 1979 the
Company had pleaded for emergency supply. The High Court has in the present
case directed the prayer for emergency supply to be considered on merits. Since
these questions are not involved in the present appeals, arguments relating to
these points have not been addressed before us. We, in the circumstances, make
it clear that any observation made in the present case shall not be treated to
have decided those points which are the subject matter of a pending case in the
High Court.
37. It
was also pointed out at the Bar that several interim orders were issued by this
Court during the pendency of the present appeals and final direction should be
given in regard to them. While granting special leave this Court by its order
dated 5.11.1982 directed the appellant Company as condition for interim relief
of restoration of electric connection to pay a sum of Rs.50,00,000 within a
fortnight and another sum of Rs. 1,50,00,000 within six months with interest
from l. 1.1983 at the rate of 12% per annum until payment. The future payment of
the electricity bills was ordered to be made within four weeks from the service
of the bills. The Court also said that the applications made by the appellants
for consideration of emergency supply of the electricity should be
expeditiously disposed of by the Board on merit, and all payments by the
appellants will be subject to adjustment in the light of the decision on the
emergency applications. By the order dated 24.11.1982 the time for payment of
Rs.50,00,000 was extended to 6.12.1982. With respect to the payment of Rs. 1,50,00,000
the Court by its order dated 6.5.1983 permitted the amount to be deposited in
PG NO 1016 two equal instalments. The Court also said that if it was ultimately
found that the appellant had paid any amount in excess of the total liability,
the Board shall repay such excess amount with interest at the rate of 12% per
annum. By a subsequent order dated 23.4.1984 the appellant was required to pay
a sum of Rs. 1,28,00,000 to the Board by the 10th of May, 1984 and to keep the bank guarantee
alive till the final disposal of these appeals as condition for continuance of
the interim order. During the hearing of the appeal a grievance was made on
behalf of the respondent Board that the bank guarantee had not been effectively
renewed and the learned counsel for the appellant undertook on behalf of the
Company to correct the defect. Subsequently it was stated at the Bar that
proper bank guarantee had been furnished in accordance with the Court's
direction. In view of our present decision the respondent Board, besides being
entitled to retain the amount already paid to it in pursuance of this Court's
direction, is further entitled to enforce the bank guarantee. The appellant
Company, therefore, must arrange to make the payment withount delay, failing
which the Board shall be entitled to take steps for enforcement of the bank
guarantee. The dispute regarding the appellant s claim to receive emergency
supply is pending before the High Court. The appellant shall be entitled to
adjustment in the light of the final decision on this point.
38. In
the result, the appeals fail and are dismissed with costs payable to the
respondent No. l.
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