Modi
Tele Fibres Ltd Vs. U.P. State Electricity Board & Ors [2007] Insc 1230 (6 December 2007)
R.V.
Raveendran & P. Sathasivam
CIVIL
APPEAL NO. 5976 OF 2001 P. Sathasivam, J.
1)
This appeal is directed against the final judgment and order dated 23.09.1999
passed by the Division Bench of the High Court of Judicature at Allahabad in
Civil Misc. Writ Petition No. 37862 of 1999, whereby the High Court dismissed
the writ petition preferred by the appellant-herein.
BACKGROUND
FACTS:
2) The
appellant-Modi Tele Fibres Ltd. was carrying on business of manufacturing
threads at Modinagar, Dist. Ghaziabad.
However,
the appellant-Company started suffering huge losses on account of various
factors such as fall in production, non-availability of capital funds for meeting
operational expenses etc. which were beyond the control of the appellant. The
appellant, on 16.06.1994, wrote a letter to respondent No.1-U.P. State
Electricity Board (hereinafter referred to as the 'UPSEB') to provide electric
supply directly to the residential colonies as the appellant was unable to
continue the payment directly on account of lack of funds. It is pertinent to
mention here that electricity to the residential colonies is fed through Modi
Tele Fibres Ltd. Service Connection No. 1008. The appellant-company entered
into an agreement on 30.09.1994 in supersession of an earlier agreement dated
28.09.1983, with the UPSEB for supply of electricity for 4000 KVA load of 11 KV
voltage through the above-said Service Connection. It is also pertinent to
mention that an amount of Rs.67,46,700/- is lying with the UPSEB as security,
whereas the appellant has already been paying regularly the bills for the
electricity consumed by the company and the residential colonies. The appellant
wrote another letter on 30.06.1995 to the UPSEB informing that an application
has been made to the State Government for closing down of the unit and the
UPSEB should discontinue permanently the supply of electrical energy to the
appellant vide S.C. No. 1008 reiterating its earlier request to provide
separate domestic connection to residential colonies. It was also reiterated
that w.e.f. 01.08.1995, the appellant-company shall not be liable for the
supply made. Despite repeated requests, the UPSEB continued to supply
electricity through the service connection to the company as well as the
residential colonies at commercial rates. In reply, respondent No.2, vide
letter dated 13.07.1995, informed the appellant that only the person who had
signed the agreement with the UPSEB is empowered to apply for permanent
disconnection and the request of the appellant for permanent disconnection was
not being considered. Thereafter, on 07.08.1995, the then Chairman of the
appellant-Company who had signed the agreement wrote a letter for permanent
disconnection and to provide separate domestic connections to the residential
colonies reiterating that w.e.f. 06.09.1995, the Company shall not be liable
for the supply. Thereafter, on 04.09.1995, because of the heavy losses being
incurred, the appellant- company had to effect permanent closure and a notice
of closure dated 02.09.1995 was issued to all the employees. It is an admitted
position that the company w.e.f 04.09.1995 was not using any electric power for
its factory, but electricity was being given to the residential colonies
through service connection No. 1008. The appellant also brought to the notice
of UPSEB that for realizing the electricity dues from the residents of the
colony, the High Court, in a similar case, passed an order in pursuance of
which bills directly were charged from the persons occupying the residential
quarters.
Under
these circumstances, the appellant again requested that it would hand over all
the infrastructure free of cost which is already used to provide separate domestic
connection to the residential colonies and asked to immediately discontinue
electric supply through the service connection. However, no heed was paid to
the request of the appellant and UPSEB kept on sending bills including the
bills of electricity consumed by the residential quarters. In the meantime,
Punjab National Bank which extended financial assistance to the appellant
initiated recovery proceedings before the Debts Recovery Tribunal. The Tribunal
passed an interim order whereby the appellant was restrained from leasing out
the factory premises. Against that order, the appellant filed a petition under
Article 227 of the Constitution before the Delhi High Court, which vide order
dated 08.03.1999 allowed the appellant to lease out the factory with a
direction that 50% of the rent amount shall be paid directly to the Punjab
National Bank. Thereafter, 50% of the rent is being received by the Bank and
50% rent by the appellant from the lessee.
3) On
24.02.1999, UPSEB raised a bill demanding Rs.11,35,80,301/- from the appellant
for the period from April, 1995 to February, 1999 which includes electric
supply to the factory and to the residential quarters, surcharge, penalty etc.
The appellant raised an objection to the said bill on 24.04.1999 stating that
it has repeatedly objected inasmuch as firstly after closure of the factory on
04.09.1995 no electricity was being consumed and was used by the factory and
the bills pertain to consumption by the residential quarters for which it had
time and again requested for a separate connection.
4) On
24.07.1999 the Sub-Divisional Magistrate, Modinagar, Dist. Ghaziabad issued an
order to the lessee Lucky Tex Spinners Pvt. Ltd. directing that since an
amount of Rs.11,61,61,574.31 is due on the appellant as Government dues 50% of
the rent amount was attached and further directed to pay the same by pay order
every month directly to the Tehsildar. The UPSEB again issued a bill on
31.07.1999 for a sum of Rs.13,40,42,018/-. In the meantime, the appellant made
a reference to the BIFR under Section 15 of the Sick Industrial Companies Act.
On 20.08.1999, the appellant sent its objection reiterating the stand that they
were not liable to pay and returned the bills to the UPSEB for cancellation.
Being aggrieved by the order passed by the Sub Divisional Magistrate, the
appellant filed a writ petition in the High Court. The Division Bench of the
High Court by order dated 23.09.1999 dismissed the writ petition on the ground
that merely because the appellant had informed the UPSEB to provide separate
domestic connections to the residential colonies knowing fully well that they
were already consuming power through service connection No. 1008 in accordance
with the terms of the agreement, the liability will not cease. The High Court was
of the view that while on the one hand there was a prayer for disconnection but
on the other hand regular consumption not for a short period, but for years,
the only conclusion was that the consumer was enjoying the power supply and
therefore the liability to pay for the power consumed must be upheld.
Dissatisfied with the order of the High Court the appellant preferred the above
appeal.
5) We
heard Mr. Rajiv Dutta, learned counsel for the appellant and Mr. Pradeep Misra,
learned counsel for the respondents.
6) The
grievance of the appellant is that even after the closure of their mill and in
spite of requests by way of letters and reminders for stopping the electrical
supply to the residential colony and for providing a separate metre connection
to the residential quarters of their employees, the respondent-UPSEB was
unjustifiably claiming power consumption charges from the appellant herein.
Alternatively,
it was submitted that it had made payment upto March, 1995. However, if the
bills for the period upto the date of closure (i.e. upto 10.09.1995) are to be
taken into account, then for the period from 01.04.1995 to 10.09.1995, the
total amount of bills comes to Rs.1,14,10,734.00 Out of the above, a sum of
Rs.49,84,894/- is on account of supply of electricity to the residential
quarters which the appellant is not liable to pay as it had sent a notice in
June, 1994. In this regard, the admitted liability of the appellant is up to
10.09.1995 which comes to Rs.64,25,840.00. The appellant had a security deposit
of Rs.67,46,700/- with the UPSEB and after adjusting the same, it is entitled
to receive a sum of Rs.3,20,860/- from the UPSEB.
7) It
is not in dispute that the appellant was provided electric connection No. 1008
for supply of electrical energy and an agreement had been executed on
30.09.1994 for supply of 4000 KVA electric load. In the counter affidavit filed
on behalf of respondent-UPSEB, it has been specifically stated that the UPSEB,
the predecessor in the interest of UP Power Corporation, has no distributing
means or any kind of control for contribution and supply of electrical energy
to the residential colonies of the workers of the appellant. In fact in the
counter affidavit the Board has stated that they were not aware about
arrangements made by the appellant for supply of power to their workers and the
terms and conditions for such supply as to whether it was free supply or
whether the cost of electricity consumed was being deducted from their wages.
According
to them, the appellant was their consumer and bulk supply of 4000 KVA was being
given to it and no bifurcation in the connection as industrial or residential.
8)
Learned counsel appearing for the appellant, by drawing our attention to
various clauses in the agreement and requests made by them in the form of
letters seeking for dis-connection of power supply to the residence of their
employees and providing separate meter for their colonies, contended that the
respondents were not justified in demanding the amount as if arrears of power
consumed by them. We verified the requests made by the appellant. As rightly
pointed out by the respondents and in fact it was not disputed that electrical
connection was provided to the appellant-factory in service connection No 1008
for supply of electrical energy and an agreement had been executed for the same
on 30.09.1994 and supply to residential colony was made by appellant under
service connection No. 1008 of appellant. Therefore, appellant cannot escape
liability for electricity consumed in the residential colony. It should also be
noted that the requests for permanent disconnection made by appellant on
30.06.1995, 13.07.1995 and 07.08.1995 could not be acted upon as under the
terms of the supply agreement dated 30.09.1994, there could be no request for
termination before the end of two years. Significantly there was no letter for
permanent disconnection after the two year period, that is after 30.09.1996.
Insofar as letter dated 16.06.1994 requesting for electricity supply to
residential quarters, it has to be ignored in view of the subsequent agreement
dated 30.09.1994 without separating supply to residential colony.
9) As
rightly stated in para 15 of the additional affidavit filed on behalf of the UP
Power Corporation, in case the appellant did not want to supply the electricity
to the residential colonies of their workers they could have switched off the
supply form their distributing mains which were in their custody and
possession. Admittedly, the appellant having such a course available, did not do
so because of their anticipation that law and order problem would arise. Having
failed to disconnect the electricity supply themselves, the appellant can not
blame the respondents for not disconnecting the supply. It is true that
pursuant to the requests made by the appellant, the respondents/Board could
have provided separate connection for the residential connections in their
colonies for the benefit of appellant's employees. However, as pointed out in
the additional affidavit necessary charges, namely, costs and expenses for
separate domestic connections were not paid. On the other hand, the appellant
was drawing power to their residential colonies in order to provide
uninterrupted supply to their employees. In those circumstances and in the
light of the specific information furnished in the additional affidavit
particularly in paras 4,8,12 and 15, we are unable to accept the stand taken by
the appellant.
10)
With the materials place before us, we are satisfied that the appellant being
consumer and consumed electricity through their service connection No. 1008 it
has to pay the amount for the same. We are also of the view that the appellant
could have taken effective steps for providing separate power connection to the
residential colony of their employees by approaching the respondents depositing
necessary charges, cost and by complying with the provisions of the Indian
Electricity Act, the Electricity Supply Act, rules and regulations made
therein, which they failed to do. All the relevant aspects have duly been
considered and rightly rejected by the High Court. In regard to the alternative
contentions relating to excessive billing and non-adjustment of security
deposit, these factual aspects were not urged before the High Court and cannot
be urged for the first time before us. If there is any error in calculation of
the amount shown as due, it is open to the appellant to take up that issue
separately with the respondents.
11) We
do not find any ground for interference, consequently, the appeal fails and the
same is dismissed. However, there shall be no order as to costs.
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