Kerala High Court
George Joseph vs Kseb on 14 October, 2008
Author: S.Siri Jagan
Bench: S.Siri Jagan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP.No. 26123 of 1999(I)
1. GEORGE JOSEPH
... Petitioner
Vs
1. KSEB
... Respondent
For Petitioner :SRI.P.B.SURESH KUMAR(QUILON)
For Respondent :SRI.C.RAGHAVAN, SC, KSEB
The Hon'ble MR. Justice S.SIRI JAGAN
Dated :14/10/2008
O R D E R
S.SIRI JAGAN, J.
=================
O.P.Nos.26123, 27988
and 29518 of 1999
=================
Dated this the 14th day of October, 2008
J U D G M E N T
The issues involved in these original petitions are identical and therefore, these original petitions are heard together and disposed of by this common judgment. O.P.Nos.26123 and 27988 of 1999 are filed by the same petitioner challenging demands for penal and additional electricity charges in respect of unauthorised load and incorrect meter for different periods and O.P.No.29518/1999 is filed by another petitioner challenging similar demand. Since the questions of law involved are the same in all the three writ petitions, I shall first decide those questions of law in O.P.Nos.26123 and 27988 of 1999 and then apply the same to the fact situation in O.P.No.29518 of 1999. O.P.Nos.26123 and 27988/1999:
2. The petitioner is engaged in the business of running a freezing plant in the name and style of "Deep sea Products". The plant has an electricity connection with a power meter and a light o.p.26123/99 etc. 2 meter, for a total power allocation of 72 KW. On 4.6.1999, the Anti-Power Theft Squad of the 1st respondent Electricity Board, inspected the electrical installation of the petitioner and prepared Ext.P1 mahazar, which was got signed by an operator of the petitioner, in which, it was recorded that the petitioner was unauthorisedly using 154 KW power load as against the authorised load of 72 KW. He was found using a welding machine and a 75 HP compressor motor which were not part of the authorised load. It was also recorded in Ext.P1 that one phase of the 3 phase light meter was not recording consumption resulting in the meter recording only 50% of the actual consumption. By Ext.P2 dated 22.6.99, the petitioner was directed to remove the additional load. By Ext.P4 dated 25.6.1999, the petitioner replied that the 75 HP load had been connected only to a generator installed by the petitioner, for sanction of using which applications have been submitted to the Board. It was further stated therein that they were drawing power only within the limit of 96HP allocated to the petitioner. Thereafter, the petitioner was served with Ext.P5 demand for Rs.3,69,682/- along with Ext.P6 details thereof, which consisted of the following o.p.26123/99 etc. 3 components calculated for the months of January to June 98.
I. 3 times normal rate of fixed charges for unauthorised additional load of 82 KW.
II. Penal charges for unauthorised installation of welding set of 13 KW.
III. 2 times rate of current charges for the proportionate consumption to the unauthorised load.
IV. 50% of the recorded consumption of light meter since one phase was not recording consumption.
Against the demand, the petitioner filed Ext.P7 appeal before the 2nd respondent, which was disposed of by Ext.P8 order, confirming the demand with the correction of the unauthorised load as 78KW instead of 82 KW. The petitioner has filed O.P.No.26123 of 1999 challenging those proceedings seeking the following reliefs:
"[i] issue a writ of certiorari or any other appropriate writ, direction or order calling for the records leading to Exhibit P5 invoice issued by the third respondent and Exhibit P8 order of the second respondent and quashing the same.
[ii] issue a writ of mandamus or any other appropriate writ, direction or order commanding the third respondent to refrain from disconnecting the power supply to the premises of the petitioner bearing Consumer No.9498 for non-payment of the amounts covered by Exhibit P5 invoice of the third respondent as modified by Exhibit P8 o.p.26123/99 etc. 4 order of the second respondent.
[iii] issue a writ of mandamus or any other appropriate writ, direction or order commanding the respondents 3 and 4 to conduct physical verification in the premises of the petitioner to ascertain the connected load in his premises and to revise all the bills issued to the petitioner after 25.6.99 on that basis."
Thereafter, a further amount of Rs.1,84,175/- was demanded for the months of July, August, September and October, 1999 also on the ground that the unauthorised load had not been regularised, by issuing Exts.P5 and P6 in O.P.No.27988 of 1999, and therefore, that original petition was filed seeking the following reliefs:
"[i] issue a writ of certiorari or any other appropriate writ, direction or order calling for the records leading to Exhibit P5 invoice issued by the third respondent and quashing the same.
[ii] issue a writ of mandamus or any other appropriate writ, direction or order commanding the third respondent to refrain from disconnecting the power supply to the premises of the petitioner bearing Consumer No.9498 for non-payment of the amounts covered by Exhibit P5 invoice of the third respondent."
3. The petitioner's contention is that he has not used any unauthorised load. According to him, the compressor motor and the welding unit were not connected to the main lines and were intended to be used only in the generator installed, for sanction for using which he had submitted applications and the same was never connected to the main lines. According to him, the o.p.26123/99 etc. 5 electrical installation of the petitioner is connected to a transformer of the Board having a capacity of only 100 KW and therefore the petitioner cannot connect a load of 149 KW in his electrical installation. He disputes the recitals in Ext.P1 mahazar and submits that the signature of an operator therein cannot be taken to mean that the petitioner has agreed to the contents thereof. According to him, clause 42 of the Regulations Relating to Conditions of Supply of Energy is not attracted to the fact situation to hold that the petitioner had exceeded the contracted load without permission and therefore, there is no justification for billing at three times for the allegedly excess connected load.
4. As regards the 2nd item of demand of penal charges for unauthorised installation of welding unit also, he contends that the same was used only for = an hour and there is no evidence to show that he had used the same for 7 days.
5. The petitioner disputes the demand for 2 times current charges for the proportionate consumption to the unauthorised load, on the ground that in so far as the respondents have no case that he had consumed energy which are not recorded in the meter, Regulation 43 is not attracted and therefore, no penal o.p.26123/99 etc. 6 charges are recoverable from him.
6. As far as the demand for 50% of the recorded consumption of the light meter on the reasoning that one phase was not recording consumption is concerned, the petitioner contends that without referring the matter to the Electrical Inspector as provided under Section 26(6) of the Indian Electricity Act, 1910, the respondents had no jurisdiction to decide the fact of short recording and the extent thereof.
7. Counter affidavits have been filed in both cases by the 3rd respondent supporting the impugned orders.
8. I have considered the pleadings and arguments of both sides in detail.
9. The first issue to be considered is a factual one, as to whether the petitioner had in fact used unauthorised load in his unit. The petitioner does not dispute the presence of the 75HP compressor motor in the premises of the establishment at the time of inspection. As per Ext.P1 mahazar the same was found in the compressor room itself along with two other compressor motors of 25 HP and 35 HP. The petitioner has no case that the additional compressor unit could not have been used in the KSEB o.p.26123/99 etc. 7 connection. He, admittedly, had not obtained permission for installation of the generator in his establishment. He has no explanation as to why without obtaining such sanction he brought the compressor motor to the premises. Therefore, the respondents could not have been faulted for concluding that the 75HP motor was unauthorised connected load intended to be used in the main lines. In such circumstances, the burden is on the petitioner to prove otherwise, in which direction the petitioner had not made any attempt whatsoever. On the other hand, the 2nd respondent had considered his contentions in this regard and held thus in Ext.P8:
"The nature of business of the unit is such that the entire electrical loads, the majority of which are electric motors need not entirely be put into continuous operation. Even in the case of such an instance, the supply system from the transformer may hold for a short interval of time considering the overloading capacity of distribution transformers. In the connected load statement prepared at the time of inspection at the premises of the consumer in the form of a site mahazar, the 75HP load is also mentioned and taken for arriving the connected load. Since the statement is seen duly acknowledged by the operator of the unit present, this would possibly have been disputed with, but which has not taken place. Apart from the statement of the petitioner consumer as to the 75 HP load is connected up with generator supply which was never used pending sanction, no evidence or substantive proof is produced in support of it. Further more the consumption for the month of 5/99 is 35505 units from the consumption of 12798 units for the month of 9/98 with progressive increase which is indicative of addition of extra loads to the system."
I am unable to find any infirmity in the reasoning given by the 2nd o.p.26123/99 etc. 8 respondent in the same. As such, I cannot but uphold the said findings. Therefore, there is no merit in the challenge against item No.I demand in Exts.P5 and P6, namely, additional charges towards 3 times normal rate of fixed charges for unauthorised additional load, as corrected as 76 instead of 82 by Ext.P8, since the same is authorised by Regulation 42(d) of the Regulations Relating to Conditions of Supply of Electrical Energy, 1990.
10. The next issue is regarding penal charges for unauthorised installation of welding set of 13 KW for 7 days. Initially I was inclined to think that this additional load is also included in item I, that too, for 6 months, this could not have been additionally charged for 7 days. But there is nothing to show that this load is included in item No.I. Moreover, the petitioner has also not raised a contention that this load is also included in item no.I and therefore, there is duplication. On the other hand, his only contention is that he had used the welding set only for = hr. and there is no material to show that the same was used for 7 days. As in the case of 75 HP motor when the presence of the welding set is admitted, it was for the petitioner to prove its limited use by producing proof in which direction also o.p.26123/99 etc. 9 the petitioner has not chosen to make any attempt whatsoever, especially since the contention of the respondent in this regard is that on local enquiry the existence of the same for 7 days was verified. In Ext.P8 the 2nd respondent holds thus in this regard:
"There is a further demand raised in the bill towards unauthorised addition of a welding set having a capacity of 13KW charged at 3 times rate for 7 days. as per site mahazar prepared at the time of inspection, the fact of such an installation is established. The period of assessment as per bill is 7 days but is objected with by the petitioner consumer stating that the same was in place for = hr. only. The period of assessment as 7 days was based on local enquiries made by the inspecting team and the objection raised by the petitioner consumer is without any conclusive proof to substantiate his statement. Hence I find that the period of assessment made in this regard for the temporary unauthorised extension effected does not require any reconsideration or revision and it is held that the demand raised towards this account is valid, correct and accordingly payable."
I am unable to find any infirmity in this reasoning also and therefore I uphold the item No. II demand also in Exts.P5 and P6.
11. However, I find considerable merit in the challenge against the demand in item No. III namely, 2 times rate of current charges for the proportionate consumption to the unauthorised load. In Ext.P7 appeal memorandum the petitioner has raised a specific ground against this demand as ground No. 7 thus:
o.p.26123/99 etc. 10
"7). If in fact the appellant had used any additional load as alleged, the same would reflect in the power meter. If so, there is no meaning in assessing the appellant 2 times of the normal current charges, especially when the power meter was fond working in order at the time of inspection."
In Ext.P8 appellate order, conspicuously, the 2nd respondent has not dealt with the said contention at all, although the same is referred to in the beginning of Ext.P8 in paragraph 2 thereof. The power meter of the petitioner's unit was admittedly working properly at the relevant time. The petitioner had been paying current charges for the use of energy as recorded in the meter. The respondents have no case that any use of energy has been omitted to be recorded in the meter. There is no allegation of theft of energy, misuse of energy supplied to him, or improper use of energy or dishonest abstraction, consumption or use of energy in a manner prejudicial to the Board, so as to attract Regulation 43 except unauthorised use of additional load for which 3 times penalty has already been charged in item no.I demand. Of course the counsel for the Board would contend that the unauthorised additional load would amount to use of energy in a manner prejudicial to the Board attracting Regulation 43 also. But I am of opinion that in respect of use of additional o.p.26123/99 etc. 11 unauthorised load the same is already covered by Regulation 42 and therefore if for the same again Regulation 43 is also applied the same would amount to a duplication. This is evident from a comparative reading of the two regulations. Regulation 42 reads thus:
"42. Misuse of Energy.- (a) The consumer shall not keep connected to the Board's supply system any apparatus which the Board deems to interfere with or affect supply injuriously to other consumers.
(b) Consumers availing three phase supply should keep their load balanced. The maximum difference in current in any two phases should not be more than 5%.
(c) The consumer shall not make such use of the supply given to him by the Board as to act prejudicially to the Board in any manner whatsoever.
(d) If the consumer exceeds the contracted load without prior permission of the Board or energy supplied for a specific purpose under a particular tariff is used without the Board's knowledge and approval for a different purpose not contemplated in the contract for supply and for which higher tariff is applicable coming under misuse of energy within the meaning of the I.E. Act, 1910. Misuse of energy will be billed at three times the rate applicable to the respective tariff for the previous six months from the date of detection of misuse unless there are convincing reasons for adopting different periods and supply disconnected without notice. The imposition of this higher rate will not relieve the consumer from any penalties imposed by law.
(e) If at any time the consumer exceeds his contracted load without prior permission of the Board, the Board have the right to disconnect the supply and recover the damages caused, if any, from him on account of his exceeding the contract load."
Regulation 43 reads thus:
"43. Theft of Energy.- If at any time a consumer is found to o.p.26123/99 etc. 12 misuse energy supplied to him or to make improper use of energy or dishonestly abstract, consume or use any energy in any manner prejudicial to the Board, the Board shall, without prejudice to the rights of the Board or the provisions of the I.E. Act, 1910, disconnect the supply without any notice. Theft of energy shall also be billed at three times the rate applicable in the respective tariff for a period of six months from the date of detection of theft unless there are convincing reasons for adopting a different period."
The language used in the two regulations shows that the two are intended to be applied in two different spheres. Regulation 42 is to be applied to cases where a consumer connects any apparatus to the Board's supply system which tends to interfere with or affect supply injuriously to other consumers and the consumer exceeds the contracted load without prior permission or energy supplied for a specific purpose under a particular tariff is used without the Boards knowledge and approval for a different purpose not contemplated in the contract for supply for which a higher tariff is applicable, which comes under misuse of energy within the meaning of Indian Electricity Act, 1910. This contemplates only 'misuse of energy' and does not refer to any dishonest intention. On the other hand Regulation 43 starts with the heading 'Theft of energy'. Although the 1st sentence in Regulation 43 refers to misuse of energy also the second sentence thereof confines billing at three times the rate to 'theft o.p.26123/99 etc. 13 of energy' alone. Therefore Regulation 43 applies exclusively to theft of energy. Hence, without a case of theft of energy penalty under Regulation 43 cannot be imposed. In this case there is not even an allegation that the petitioner is in anyway guilty of theft of energy without which Regulation 43 cannot be made applicable to the petitioner. Once application of Regulation 43 is excluded in the petitioner's case, clearly item no. III demand is a duplicate application of Regulation 42 for the same irregularity of unauthorised connected load which is unsustainable in the petitioner's case.
12. I am supported in this view by the judgment of a learned single judge of this court in the case of J.D.T. Islam Orphanage Committee v. Assistant Engineer [2007(3)KLT 388] which refers to a Division Bench decision in W.A. No. 1231/2003. Reading out from a copy of the said Division Bench decision, the counsel for the Board would contend that the said Division Bench decision was not concerned with the question as to whether penalty under both Regulations 42(d) and 43 would be payable for unauthorised load, but was dealing only with the question as to whether 3 times penalty is leviable in all cases o.p.26123/99 etc. 14 uniformly irrespective of the degree of culpability of the consumer. A reading of the said judgment would prima facie show substance in the contention of the counsel for the Board. However, I respectfully agree with the conclusion in J.D.T. Islam Orphanage Committee's case even after eschewing the reliance on the Division Bench decision, for which I have also given additional reasons separately hereinbefore. In this connection I must consider the applicability of the decision referred to by the counsel for the Board in Hyderabad Vanaspathy Ltd. V A.P. State Electricity Board and others, [(1998) 4 SCC 470], in paragraph 27 of which it is held thus:
'27. We are unable to accept the contentions. Section 49 empowers the Board to supply electricity on "such terms and conditions as it thinks fit". It may also frame uniform tariffs. We have found that the terms and conditions of supply are statutory in character. They can be invalidated only if they are in conflict with any provision of the Act or the Constitution. Learned counsel have not shown to us any provision in the Supply Act with which clause 39 is in conflict. Insofar as the Supply Act is concerned, the argument hovers around Section 49 only. The only limitation in that section is that the Terms and Conditions of Supply should be subject to the provisions of the Act. Clause 39 does not violate any provision in the Supply Act. It is the statutory duty of the Board to arrange for the supply of electricity throughout the State and for transmission and distribution of the same in the most efficient and economical manner. For that purpose it has necessarily got to prevent unauthorised user, pilferage or malpractices by the consumers. Hence the necessary safeguards have to be provided as part of the conditions of supply so that the consumers will be bound by them. While on the one hand, the Board has to recoup the loss suffered by such pilferage or other o.p.26123/99 etc. 15 malpractices, it has also on the other got to stop immediately the continuation thereof. Hence the Terms and Conditions of Supply have to provide for compensation as well as immediate disconnection. For ascertaining the loss and fixing the compensation, a uniform procedure has to be framed and a machinery constituted. Clause 39 is only doing that. Every consumer is made fully aware of the said terms and he signs the contract only on that basis. He gives an undertaking in that contract that if he is found indulging in any malpractices etc. he shall pay additional charges as may be levied by the Board and that the Board have the right to disconnect supply of electricity to his premises for such period as may be decided by the Board".
The counsel for the Board submits that it is exactly for the purpose as explained by the Supreme Court that in Regulation 43 disconnection and penalty both are provided for. Therefore, the 2nd sentence has to be read in conjunction with the 1st sentence is the contention. I am unable to agree. It is true that the Board could have, in addition to disconnection, provided for penalty also for each of the malpractices mentioned in the first sentence. But significantly the Board decided to make the penalty provision applicable to 'theft of energy' alone. It is settled law that a penal provision has to be construed strictly. In any event for unauthorised load a penalty is already provided for in Regulation 42(d) and therefore Regulation 43 cannot be construed as another penal provision for the same irregularity. If it is so construed, it would amount to double jeopardy.o.p.26123/99 etc. 16
13. Therefore the impugned demand of 2 times rate of current charges for the proportionate consumption to the unauthorised load in addition to 3 times normal rate of fixed charges for unauthorised additional load is clearly without jurisdiction and liable to be set aside.
14. Now we come to the validity of the last item of demand, namely, 50% of the recorded consumption of light meter since one phase was not recording consumption, resolving of which poses some difficulty in view of different views taken by courts at different times on the interpretation of section 26(6) of the Electricity Act, 1910. According to the petitioner the respondents could not have validly demanded additional charges on the ground that one phase of the meter was not recording consumption, without referring the matter to the electrical inspector as mandated in Section 26(6) of the Indian Electricity Act, 1910, in so far as according to the petitioner, the meter was recording consumption correctly. On the other hand the counsel for the Board would contend that Section 26(6) is not attracted in this case since this is a case of one phase of the meter not working at all and not a case of the meter running slow or fast, o.p.26123/99 etc. 17 which is the situation covered by the section. For resolving this dispute, a careful reading of the relevant portions of Section 26 and Rule 57 of the Electricity Rules, themselves is essential. The relevant parts of Section 26 of the Indian Electricity Act, 1910 and Rule 57 of the Electricity Rules relevant for our purposes are as follows:-
"5. The relevant parts of Section 26 of the Electricity Act, 1910 and Rule 57 of the Electricity Rules, relevant for the purpose of this judgment, are reproduced hereunder:
Electricity Act, 1910 "26. Meters.- (1) In the absence of an agreement to the contrary, the amount of energy supplied to a consumer or the electrical quantity contained in the supply shall be ascertained by means of a correct meter, and the licensee shall, if required by the consumer, cause the consumer to be supplied with such a meter:
Provided that the licensee may require the consumer to give him security for the price of a meter and enter into an agreement for the hire thereof, unless the consumer elects to purchase a meter.
(2)-(3) * * * (4) The licensee or any person duly authorised by the licensee shall, at any reasonable time and on informing the consumer of his intention, have access to and be at liberty to inspect and test, and for that purpose, if he thinks fit, take off and remove, any meter referred to in sub-section (1); and, except where the meter is so hired as aforesaid, all reasonable expenses of, and incidental to, such inspecting, testing, taking off and removing shall, if the meter is found to be otherwise than correct, be recovered from the consumer; and, where any difference or dispute arises as to the amount of such reasonable expenses, the matter shall be referred to an Electrical Inspector, and the decision of such Inspector shall be final:
Provided that the licensee shall not be a liberty to take off or o.p.26123/99 etc. 18 remove any such meter if any difference or dispute of the nature described in sub-section (6) has arisen until the matter has been determined as therein provided.
(5) * * * (6) Where any difference or dispute arises as to whether any meter referred to in sub-section (1) is or is not correct, the matter shall be decided, upon the application of either party, by an Electrical Inspector; and where the meter has, in the opinion of such Inspector ceased to be correct, such Inspector shall estimate the amount of the energy supplied to be consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct; but save as aforesaid, the register of the meter shall, in the absence of fraud, be conclusive proof of such amount or quantity:
Provided that before either a licensee or a consumer applies to the Electrical Inspector under this sub-section, he shall give to the other party not less than seven days' notice of his intention so to do.
(7) * * * Explanation.- A meter shall be deemed to be 'correct' if it registers the amount of energy supplied, or the electrical quantity contained in the supply, within the prescribed limits of error, and a maximum demand indicator or other apparatus referred to in sub- section (7) shall be deemed to be 'correct' if it complies with such conditions as may be prescribed in the case of any such indicator or other apparatus."
Electricity Rules, 1956.
"57. Meters, maximum demand indicators and other apparatus on consumer's premises.-(1) Any meter or maximum demand indicator or other apparatus placed upon a consumer's premises in accordance with Section 26 shall be of appropriate capacity and shall be deemed to be correct if its limits of error are within the limits specified in the relevant Indian Standard Specification and where no such specification exists, the limits of error do not exceed 3 per cent above or below absolute accuracy at all loads in excess of one-tenth of full load and up to full load:
Provided that for extra high voltage consumers the limit or error shall be 11 per cent.o.p.26123/99 etc. 19
(2) No meter shall register at no load.
(3) Every supplier shall provide and maintain in proper condition such suitable apparatus as may be prescribed or approved by the Inspector for the examination, testing and regulation of meters used or intended to be used in connection with the supply of energy:
Provided that the supplier may with the approval of the Inspector and shall, if required by the Inspector, enter into a joint arrangement with any other supplier for the purpose aforesaid.
(4) Every supplier shall examine, test and regulate all meters, maximum demand indicators and other apparatus for ascertaining the amount of energy supplied before their first installation at the consumers premises and at such other intervals as may be directed by the State Government in this behalf.
(5) Every supplier shall maintain a register of meters showing the date of the last test, the error recorded at the time of the test, the limit of accuracy after adjustment and final test, the date of installation, withdrawal, reinstallation, etc. for the examination of the Inspector or his authorised representative.
(6) Where the supplier has failed to examine, test and regulate the meters and keep records thereof as aforesaid, the Inspector may cause such meters to be tested and sealed at the cost of the owner of the meters in case it is found defective."
15. The Board's counsel relies on a Division Bench decision in Southern India marine Products Co. v. K.S.E.B. wherein it was held that in a case where an electrical meter is not registering correct consumption of energy on account of the defectiveness in the wiring, Section 26(6) is not attracted. With great respect to the Division Bench, I am of opinion that the said decision is no longer good law in view of subsequent decisions of o.p.26123/99 etc. 20 the Supreme Court taking a different view, which I shall refer to, shortly. The Board's counsel also refers to the decisions of State of West Bengal and others v. Rupa Ice Factory (P) Ltd. and others, (2004) 10 SCC 635 and Sub Divisional Officer (P) UHBVNL v. Dharampal, (2006) 12 SCC 222, wherein the Supreme Court has held that S.26(6) is not attracted to cases where meter was found tampered with and there is theft or pilferage of electricity. I am of opinion that in so far as the respondents do not have a case of tampering or theft or pilferage of electricity by the petitioner in this case, reliance on those decisions for this purpose is misplaced. On the other hand, I may note that the petitioner himself is relying on Dharampal's case (supra) in support of his case.
16. Before going to the decisions on the subject I may supply some of my reasonings also on the subject. The meter is under the absolute control of the Board, and the same is kept sealed. It is true that in cases where the consumer tampers with the meter and the consumer interferes with the functioning of the meter, the question of a dispute having to be referred to the Electrical Inspector under Section 26(6) does not arise. So also o.p.26123/99 etc. 21 when the meter does not record any consumption whatsoever, or the meter is burnt, there is no scope of a dispute as to whether the meter is correct and in both cases evidently Section 26(6) cannot be attracted.
17. Otherwise Section 26(6) is intended for resolving genuine disputes regarding correctness of meter between the licensee and the consumer, by an independent arbiter namely the Electrical Inspector. When the meter is under the sole control of the licensee, the same being kept sealed by him, when he alleges that the meter is not recording correct consumption, the consumer, who may not, in most cases, be an expert on the working of the meter, is entitled to dispute the opinion of the licensee in which case, Section 26(6) mandates the licensee to get the expert decision of the independent arbiter namely, the electrical inspector. This is based on sound principles as in the case of breach of contract and assessment of damages in respect of a contract between the Government and a contractor. The Supreme Court has, in the decision of State of Karnataka v. Rameswara Rice Mills (AIR 1987 SC 1359) held that the Government being a party to a contract cannot adjudicate upon o.p.26123/99 etc. 22 disputed questions of breach of contract and such adjudication should be by an independent person or body before damages can be demanded for such breach. Therefore, when the licensee alleges that the meter is recording less than what it ought to have, and the consumer disputes the same, the licensee should refer the dispute so raised by him to the Electrical Inspector. The reverse is the position when the consumer alleges that the meter is not recording correctly. Therefore, the liability to refer the dispute primarily lies on the party who alleges that the meter is not correct. Therefore, the consumer is entitled to take the stand that unless the licensee gets the dispute resolved and the charges assessed by the electrical inspector by a reference under Section 26(6), he is liable to pay only for the energy as recorded in the meter.
18. The scope of applicability of Section 26(6) has been considered by the Supreme Court in several cases. A three judge bench of the Supreme Court has, after referring to Section 26(6), Rule 57 and various earlier decisions of the Supreme Court has held thus in Bombay Electricity Supply & Transport Undertaking v. Laffans (India) (P) Ltd. and another, (2005) o.p.26123/99 etc. 23 4 SCC 327:
"6. The above said provisions have been the subject-matter of consideration by this Court in three cases which have been brought to our notice. They are M.P. Electricity Board v. Basantibai, Belwal Spg. Mills Ltd. v. U.P. SEB and J.M.D. Alloys Ltd. v. Bihar SEB. The first and the last of the cases are decisions by three learned judges and the second one is a decision by two learned judges. We have carefully perused the three decisions and we find ourselves in entire agreement with the view of the law taken in these cases. In particular, in Belwal Spg. Mills case this Court has examined the provisions of Section 26, specially sub-section (6) thereof, in very many details, also taking into consideration the legislative intention and the object sought to be achieved by substituting sub-section (6) by Act 32 of 1959 in its present form over the predecessor provision. We would be referring to the relevant findings of law recorded in these cases. However, at the outset and here itself, we would like to mention that the applicability of sub-section (6) of Section 26 is attracted only when the meter is not correct. Section 26(6) will have no applicability (i) if the consumer is found to have committed a fraud with the licensee and thereby illegally extracted the supply of energy preventing or avoiding its recording, or (ii) has resorted to a trick or device whereby also the electricity is consumed by the consumer without being recorded by the meter. In effect the latter class of cases would also be one of fraud. Tampering with the meter or manipulating the supply line or breaking the body seal of the meter resulting in non-registering of the amount of energy supplied to the consumer or the electrical quantity contained in the supply - are the cases which were held to be not covered by Section 26(6) in the case of Basantibai while the provision was held applicable to any case of meter being faulty due to some defect and not registering the actual consumption of electrical energy. Similar is the view taken in the case of J.M.D. Alloys Ltd.
7. What is a correct meter? The language of sub-section (6) of Section 26 starts with - "where any difference or dispute arises as to whether any meter referred to in sub-section (1) is or is not correct...". The dictionary meaning of the word "correct" is:
adhering or conforming to an approved or conventional standard; conforming to or agreeing with fact; accurate.
8. As to what would be a "correct" meter, there is sufficient indication in the Act and the Electricity Rules, 1956 in the Explanation given at the end of sub-section (7) of Section 26 of the o.p.26123/99 etc. 24 Act and sub-rules (1) and (2) of Rule 57, quoted hereinabove.
Where the meter is completely non-functional on account of any fault or having been burnt, it will not register the supply of energy at all. Since a burnt meter does not record any supply of energy, it virtually means "no meter".
9. What is contemplated by Section 26(6) is a running meter, but which on account of some technical defect registers the amount of energy supplied or the electrical quantity contained in the supply beyond the prescribed limits of error. It contemplates a meter which is either running slow or fast with the result that it does not register the correct amount of energy supplied. There is an additional reason for coming to such a conclusion. Section 26(6) confers power upon the Electrical Inspector to estimate the amount of energy supplied to the consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct. Where the meter is running slow or fast, it will be possible for the Electrical Inspector to estimate the amount of energy supplied to the consumer by determining the extent or percentage of error in recording the supply, whether plus or minus. However, where the meter is burnt or is completely non-functional, such an exercise is not at all possible. Therefore, Section 26(6) can have no application in a case where a meter has become completely non-functional on account of any reason whatsoever.
10. In Belwal Spg./ Mills case this Court has held inter alia:
(1) Any difference or dispute arising between the licensee and the consumer, as to whether any meter has recorded or is recording correct reading or not, can be raised by either party and referred, upon the application of either party, for decision by an Electrical Inspector.
(2) If the Electrical Inspector comes to the finding that the meter has ceased to be "correct", he has to determine the quantum of electricity consumed for the statutory period of six months, referred to in sub-section (6). The determination made by the Electrical Inspector on twin questions (i) whether meter was correct or not, and (ii) if the meter was not correct then the estimate of supply of electricity to the consumer for the statutory period of six months, is binding on the licensee and the consumer (subject only to judicial review by a competent court).
(3) For any other period anterior to the statutory period, the legislature has in no uncertain terms indicated in the latter part of o.p.26123/99 etc. 25 sub-section (6) that reading registered in the disputed meter will not only be presumed to be correct but such reading shall be conclusive proof of the quantity of electricity consumed or the amount of electricity supplied to the consumer. For any period other than the statutory period of six months, referred to in sub-section (6) the legislature has intended by the amendment of sub-section 6 of Section 26 (as made by Act 32 of 1959) to put an end to such contest between the licensee and the consumer and has set at rest any dispute relating to any period anterior to the statutory period on estimation by providing that in a case of dispute as to functioning of meter, the reading in the meter for the period beyond the period of statutory estimation, will be final.
(4) Any unilateral decision of either of the parties about the correct status of the meter is not to be accepted by the other party if the other party raises objection as to the status of the meter.
(5) The estimate to be prepared by the Electrical Inspector, on the dispute being referred to him, may go only up to six months prior to the date of raising the dispute and reference but such estimate will only cover that period prior to raising the dispute during which, according to the Electrical Inspector, the meter had ceased to be correct.
(6) The estimate of supply of energy by the Electrical Inspector is to be made for a period not exceeding six months calculated backwards from the date of reference to the Electrical Inspector. Thus, it is the date of reference to the Electrical Inspector which is conclusive of the period of six months; the date of inspection, the date of raising dispute and the date of adjudication are immaterial. (Here, we may add, that such period of six months shall apply.)
11. The abovesaid deductions, drawn in the case of Belwal Spg. Mills are accompanied by in-depth analysis of several provisions of the Act, the historical background and practical aspects of supply and consumption of electricity. As we find ourselves in entire agreement with the abovesaid statement of law, it is not necessary for us to make a detailed independent discussion of our own of the reasons as the same is available in the case of Belwal Spg.Mills."
A two judge Bench of the Supreme Court in Dharam Pal's case (supra) reiterated that decision quoting the abovesaid paragraphs o.p.26123/99 etc. 26 themselves.
19. Now what is the position where the licensee himself unilaterally decides that the meter is not recording energy consumption correctly and without referring the matter to the electrical inspector decides himself that the consumer should pay additional electricity charges as estimated by him. In respect of such a situation, the Supreme Court, in Bombay Electrical Supply's case (supra) held thus:
"13. For the period for which, according to the appellant, the meter was not correct, none of the parties has referred the dispute to the Electrical Inspector. The meter though it is alleged by the appellant to have remained not correct, readings have been regularly recorded, bills raised and also paid by the consumer, Respondent 1. According to Section 26(6), the readings would bind the appellant and Respondent 1 both. It has never been the case of the appellant at any stage that the meter was not correctly recording the consumption of electricity on account of being non-functional due to any fraud committed or device or trick adopted by the consumer, Respondent 1 or that the body seal of the meter was found broken or tampered with. Respondent 1 was accepting and honouring the demands raised by the appellant and, therefore, Respondent 1 cannot be expected to have raised a dispute and sought for a reference for determination by the Electrical Inspector. The appellant could not have, therefore, revised the demand for such period based on average consumption during the previous year. There is yet another reason why the entitlement of the appellant to recover charges from Respondent 1 may have to be denied. According to the proviso appended to sub- section (4) of Section 26, the licensee cannot take off or remove any such meter as to which difference or dispute of the nature described in sub-section (6) has arisen until the matter has been determined by the Electrical Inspector. The purpose is to preserve the evidence. The dispute shall be expeditiously disposed of by the Electrical Inspector by applying scientific method of investigation to find out if the meter was incorrect and if so then what was the extent of error. In the present case, the meters said to be incorrect have been removed and o.p.26123/99 etc. 27 replaced by the appellant. Admittedly, no dispute has been raised and referred to the Electrical Inspector. The most material evidence being the meter itself has been lost by the act of the appellant in removing the incorrect meter. The appellant cannot be permitted to take advantage of its own act and omission - the act of removing the meter and the omission to make a reference to the Electrical Inspector.
14. The material available on record before us does not enable the separation of the impugned demand by bifurcating the same into two on the criterion discussed hereinabove. The appellant shall have to be left free to examine its records and then revise its demand. We may clarify that the demand raised by the appellant based on the average consumption during the similar period in the last year is justified, in the facts and circumstances of the present case, for the period for which the reading was lost on account of the meter having been found burnt. Accordingly, the calculation based on the record of consumption for the corresponding period from the previous year shall hold good. The appellant shall raise a demand accordingly and the first respondent shall be bound to honour the same. So far as the period for which the meter is said to be incorrect, the demand has not been revised by basing it on the finding arrived at by the Electrical Inspector and hence is not available to be revised. The meter is alleged by the appellant to be not correct and yet the appellant has not made a reference to the Electrical Inspector under Section 26(6). The appellant cannot now be allowed to raise an additional demand over and above the demand raised through the bills which were issued for that period and paid by the first respondent. The right to raise additional bills stands lost by the appellant for its failure to proceed in accordance with Section 26(6) of the Electricity Act, 1910".
20. After referring to the above decision, a Division Bench of this Court has also come to the same conclusion in Nirmala Metal Industries v. K.S.E.B. [2006 (3) KLT 465] wherein the Division Bench held that if the Board wants to raise a bill on the plea that it is a defective meter, it is for the Board to do the same in accordance with Section 26 of the Act and that when the meter has already been removed by the Board to its testing o.p.26123/99 etc. 28 centre and not to the Electrical Inspector under Section 26(6), the Board is not justified in raising the bill against the consumer. In that decision the Division Bench quashed similar demands as in this case. Coming to the present case, the Board has unilaterally come to the conclusion that one phase of the meter was not recording consumption, purported to have corrected the meter themselves, without first referring the matter to the electrical inspector and raised demand for additional electricity charges from the petitioner on that ground. As already stated, the Board has no case that the petitioner has tampered with the meter. Their case is that the meter was not recording the actual consumption since one phase of the meter was not working. That essentially means that the meter was not running correctly and the same was running slow, which case is squarely covered by the Supreme Court decisions quoted above. Since the Board has, without referring the dispute to the electrical inspector, purported to correct the meter and raise additional demand, the petitioner is entitled to the reliefs as granted by the Supreme Court to the appellant in Bombay Electricity Supply's case (supra) in paragraphs 13 and 14 quoted above and the Division o.p.26123/99 etc. 29 Bench of this Court in Nirmala Metal Industries' case (supra). Therefore, the demand, for 50% of the recorded consumption of light meter on the ground that one phase was not recording consumption, in Exts.P5 and P6 is unsustainable and the same is hereby set aside.
21. O.P. No.27988/99 is filed challenging Ext.P6 demand for the months of July, August, September and October, 1999 on the ground that the unauthorised additional load of 78 KW had not been regularised and one phase of the light meter was not working. The findings as above in respect of the earlier demand are applicable to the said demand also.
In the result the said two original petitions are partly allowed as follows:
(a) Exts.P5 and P6 in O.P. No. 26123/99 and Ext.P6 in O.P. No.27988/99 are quashed to the extent the same demand 2 times rate of current charges for the proportionate consumption to the unauthorised load and 50% of the recorded consumption of light meter since one phase was not recording consumption.
Ext.P8 also stands modified correspondingly.
(b) The demands for 3 times the fixed charges for o.p.26123/99 etc. 30 unauthorised load and penal charges for unauthorised installation of welding set are confirmed.
(c) Revised bills excluding the demands in (a) above, shall be issued by the 3rd respondent as expeditiously as possible. The petitioner shall pay the same within one month from the date of receipt of the revised bill.
O.P.No.29518/99
22. The petitioner in this original petition is a hospital having an electricity connection. The electrical installation in the premises of the petitioner was inspected by the Anti Power Theft Squad who found the following irregularities.
"i. The Consumer's registered load is 34 KW whereas it was found to be 70KW. Accordingly there is an addl. unauthorised load of 36KW in the premises.
ii. One phase of the 3 phase energy meter for recording consumption was not operative and thereby /3 consumption was left 1 unrecorded".
Initially a bill was issued demanding additional electricity charges in respect of those irregularities which was later cancelled and a fresh bill was issued to the petitioner, demanding an amount of Rs.2,38,944/-. Although the petitioner challenged the same in O.P.No.2156/1999, the petitioner was relegated to the appellate o.p.26123/99 etc. 31 remedy. Ext.P5 appeal was filed, which was disposed of by Ext.P7 order confirming the demand with corrections regarding the additional load and directing issue of fresh bill. Pursuant to the same, Ext.P8 bill was issued demanding an amount of Rs.2,58,408/- enclosing therewith Ext.P9 statement of calculations. The petitioner has filed the original petition seeking the following reliefs:
"a) Issue a writ in the nature of certiorari quashing Exhibit P7 to the extent to which second respondent has rejected petitioner's appeal Exhibit P5.
b) Issue a writ in the nature of certiorari quashing Exhibit P8."
23. As far as the extent of unauthorised additional load is concerned the petitioner has not been able to disprove the findings in Ext.P7 in relation to the same. Therefore, the demand at 3 times the fixed charge cannot be faulted. However, since my findings in the earlier two writ petitions with regard to demands for 2 times proportionate current charges and 50% assessment based on the meter not recording in one phase squarely apply to the fact situation in this case and therefore, demands in respect of the same are liable to be quashed.
Therefore Ext.P7 is quashed to that extent holding that the o.p.26123/99 etc. 32 petitioner is liable to pay only the 3 times fixed charges and not the charges under the other two heads. Consequently Exts.P8 and P9 also would stand set aside to that extent. Revised bill in accordance with the above finding incorporating the demand for 3 times fixed charge for unauthorised load alone shall be issued expeditiously and the petitioner shall pay the same within one month from the date of receipt of the revised bill. O.P.No.29518/99 is disposed of accordingly.
Sd/-
sdk+ S.SIRI JAGAN, JUDGE
///True copy///
P.A. to Judge
o.p.26123/99 etc. 33
S.SIRI JAGAN, J.
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O.P.Nos.26123(I),
27988(F)
and 29518(L) of 1999
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J U D G M E N T
14th October, 2008