Rajasthan High Court - Jaipur
J V V N Ltd vs Officer Of Electricity And Anr ... on 30 May, 2023
Author: Sameer Jain
Bench: Sameer Jain
[2023/RJJP/003812]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Civil Writ Petition No. 3840/2016
Jaipur Vidhyut Vitran Nigam Limited, Vidyut Bhawan, Janpath,
Jaipur, Through Officer-In-Charge Executive Engineer
(Commerical-III), Jaipur Vidyut Vitran Nigam Limited, Vidyut
Bhawan, Janpath, Jaipur
----Petitioner
Versus
1. Office Of Electricity Ombudsman, Rajathan, Jaipur, 22
Godown, Sahekar Marg, Jaipur
2. Shriram Piston and Rings Ltd., SP-1-892 and 893, RIICO
Industrial Area, Pathredi (District Alwar) 301707.
----Respondents
Connected With
S.B. Civil Writ Petition No. 8753/2013
Jaipur Vidhyut Vitran Nigam Limited, Vidyut Bhawan, Janpath,
Jaipur, Through Officer-In-Charge Superintending Engineer
(Commercial), Jaipur Vidyut Vitran Nigam Limited, Vidyut
Bhawan, Janpath, Jaipur
----Petitioner
Versus
1. Office Of Electricity Ombudsman, Rajathan, Jaipur.
2. M/s APM Industries Limited, SP-147, RIICO Industrial Area,
Bhiwadi-301019
----Respondent
S.B. Civil Writ Petition No. 7796/2014
Jaipur Vidhyut Vitran Nigam Limited, Vidyut Bhawan, Janpath,
Jaipur, Through Officer-In-Charge Executive Engineer (BD),
Jaipur Vidhyut Vitran Nigam Limited, Vidyut Bhawan, Janpath,
Jaipur
----Petitioner
Versus
1. Office Of Electricity Ombudsman, Rajasthan, Jaipur
2. M/s Balakrishna Industries Limited, SP-923, RIICO
Industrial Area, Phase III, Bhiwadi - 301019
----Respondents
(D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders)
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[2023/RJJP/003812] (2 of 23) [CW-3840/2016]
S.B. Civil Writ Petition No. 7797/2014
Jaipur Vidyut Vitran Nigam Ltd, Vidyut Bhawan, Janpath Jaipur
through Officer-In-Charge Executive Engineer (BD), Jaipur
Vidyut Vitran Nigam Ltd., Vidyut Bhawan, Janpath, Jaipur.
----Petitioner
Versus
1. Office Of Electricity Ombudsman, Rajathan, Jaipur.
2. M/s Balakrishna Industries Limited, SP-923, RIICO Industrial
Area, Phase III, Bhiwadi-301019
----Respondents
For Petitioner(s) : Mr. Bipin Gupta, Adv.
For Respondent(s) : Mr. P.N. Bhandari,
Mr. Sunil Nath, Advs.
HON'BLE MR. JUSTICE SAMEER JAIN
Order
Reserved On: 16/02/2023
Pronounced on: 30/05/2023
1. All these writ petitions are filed by the petitioner
Discom-Jaipur Vidyut Vitran Nigam Limited (for short "JVVNL")
assailing different orders passed by the Electricity Ombudsman,
Rajasthan (for short "EO"). The issue before the EO was regarding
recovery of transformation losses (at 3%) and cost / pro-rata cost
of EHV Transformer, from the consumers who were falling under
the category of 'Large Industries', on allowing increase in contract
demand at lower voltage than the prescribed level of supply of
voltage according to their contract demand. For reference, the
prescribed voltage level for various categories of load is
reproduced as under:
(D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders)
(Downloaded on 11/11/2023 at 05:40:19 PM)
[2023/RJJP/003812] (3 of 23) [CW-3840/2016]
Category of Character of services
Consumer
Contract Demand Voltage of Supply
g) Large Industrial i) Connected Load i) HT 11 kV
(except Railway above 112 kW (150 HP)
Traction) and/or contract/actual
demand above 125 kVA
but up to 1500 kVA
ii) Contract/actual ii) HT 33 kV
demand is above 1500
kVA but up to 5000 kVA
iii) Contract/actual iii) EHT 132 kV or 220
demand above 5000 kV
kVA
"Note:
...
(v) The Nigam may allow supply to a consumer at a voltage level one stage higher or lower in exceptional circumstances."
2. Admittedly, all the consumers/applicants before the EO were large industrial consumers of electricity who were receiving voltage supply one stage lower than the prescribed load after their application for extension of contract demand was accepted. Since the supply was on one stage lower, which was only permissible in exceptional circumstances, the Discom was levying a charge of 3% as transformation losses and cost / pro rata cost of the transformer. The said levy was challenged by the consumers and the EO held the said levy to be without authority of law.
3. As common question of law is involved in all these writ petitions, with consent of the parties, they were all heard together and are now being decided by way of this common order. FACTS/BACKGROUND:
4. The facts of the case, as per learned counsel for the petitioner-Discom, are as follows:
4.1) In SB Civil Writ Petition No.8753/2013, it is submitted that prior to 17.04.2006, the respondent-consumer was having a (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (4 of 23) [CW-3840/2016] contract demand of 2600 KVA and accordingly its voltage supply was HT-33 KV. On 17.04.2006, the respondent-consumer applied for load extension from 2600 KVA to 6000 KVA with further request to sanction the same on lower load extension of 33 KVA power supply line instead of prescribed 132 KVA power supply line. On 19.05.2006, the application of the consumer was accepted with condition that respondent-consumer would be liable to pay the transformation losses charged @ 3% of total recorded consumption and with the condition that the respondent-consumer would also bear pro rata cost of EHP transformer above contract demand of 5000 KVA. Subsequently, the demand notice was accepted without protest and accordingly 3% transformation losses were being added and recovered from time to time. On 05.03.2007, respondent-consumer again applied for extension of load from 6000 KVA to 7000 KVA on 132 KV line but the said demand was refused by petitioner-Discom on 31.07.2007 due to non-availability of right of way. In the meanwhile, on 26.05.2007, respondent-consumer made another application for extension of contract demand from 6000 KVA to 6600 KVA on 33KV line. On 20.06.2007, the said application for extension was accepted and the contract demand of the respondent-consumer was increased to 6600 KVA on the 33KV line with the condition of 3% transformation losses over and above 5 MVA. The said practice continued till 2012 and it was only in October, 2012 that for the very first time, the respondent-consumer approached the Corporate Level Redressel Committee (for short "CLRC") under Section 42(5) of the Electricity Act, 2003 (for short "Act of 2003") alleging that levy of 3% transformation loss is unjustified and (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (5 of 23) [CW-3840/2016] illegal and that pro-rata cost cannot be taken for arranging supply from existing EHV transformer and accordingly prayed for refund of the same. On 21.12.2012, the CLRC rejected the prayer and therefore on 04.01.2013, the respondent-consumer approached the learned EO as per provisions of Section 42(6) of the Act of 2003 and the learned EO adjudicated the matter in favour of the respondent-consumer vide order impugned dated 13.03.2013 whereby recovery of 3% transformation losses was ordered to be stopped and the petitioner-JVVNL was ordered to refund the respondent-consumer the Pro-rata cost of EHV transformer and 3% transformation losses recovered from 30.06.2007. 4.2) In SB Civil Writ Petition No.3840/2016, it is submitted that the respondent-consumer applied for release of new connection with a contract demand of 4500 KVA on 11 KV supply on 16.01.2010 and the same was accepted on 16.08.2010 with a condition of payment of cost of 33/11KV transformer and further condition that respondent-consumer would be liable to pay transformation losses @ 3%. The said conditions were accepted by the respondent-consumer and accordingly a demand note was issued on 17.08.2010 which contained the said conditions. It is submitted that the demand note was deposited by the respondent-consumer without any protest on 20.08.2010. It was only on 05.10.2012 that for the very first time, the respondent-
consumer approached the CLRC with a limited prayer to refund the pro rata cost of the transformer. The CLRC rejected claim of the respondent-consumer on 21.12.2012, against which the respondent-consumer approached the EO. The EO, going beyond the prayer of the respondent-consumer, ordered the refund of (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (6 of 23) [CW-3840/2016] entire cost of transformer as well as refund of transformation losses recovered since inception vide order dated 13.03.2013. The said order of EO was assailed by way of writ petition (being SBCWP No 8542/2013) and this Court, vide order dated 16.04.2015, remanded the matter back to the EO for afresh consideration. However, the EO again, vide impugned order dated 29.10.2015, granted the same relief to the respondent-consumer which was beyond the scope of the pleadings.
4.3) In SB Civil Writ Petition No.7796/2014, it is submitted that prior to 07.02.2007, the respondent-consumer was having contract demand of 4200 KVA. On 07.02.2007, the respondent- consumer applied for load extension from 4200 KVA to 6000 KVA with a request to sanction the same on 33 KVA line itself instead of the prescribed 132 KVA line. On 14.03.2007, sanction for extension of contract demand was accorded with the conditions that the respondent-consumer would be liable to pay pro rata cost of transformer as also to pay transformation losses charged @ 3%. On 23.03.2007, the demand note containing the specific conditions was issued but the respondent-consumer failed to deposit the amount and therefore the demand note 23.03.2007 was rejected. On 17.06.2008, respondent-consumer again applied for load extension from 4200 KVA to 6000 KVA with a request to sanction the same on 33 KVA line itself instead of the prescribed 132 KVA line and on 31.07.2008 another demand note was issued with the same conditions and this time the respondent-consumer deposited the entire amount without any protest. On 07.10.2011, respondent-consumer applied for extension of load from 6000 KVA to 9990 KVA on 33 KV line. The said extension application was (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (7 of 23) [CW-3840/2016] sanctioned with identical conditions on 28.11.2011 and accordingly demand note was also issued on 07.12.2011, which was deposited without any protest. Again respondent-consumer applied for extension of load from 9990 KVA to 13000 KVA on 33KV line on 11.10.2012 and again the same was sanctioned on identical conditins on 04.12.2012 and demand note was issued and deposited on 13.12.2012 without any protest. For the very first time in October 2012, the respondent-consumer approached CLRC alleging that levy of 3% transformation loss is unjustified and illegal and that pro-rata cost cannot be taken for arranging supply from existing EHV transformer and accordingly prayed for refund of the same. The CLRC rejected the prayer on 28.11.2013 and the respondent-consumer then approached EO on 29.01.2014. Vide impugned order dated 26.04.2014, the EO granted relief beyond the prayer.
4.4) In SB Civil Writ Petition No.7797/2014, it is submitted that prior to 18.08.2011, the respondent-consumer was having contract demand of 4950 KVA. On 18.08.2011, the respondent- consumer applied for load extension from 4950 KVA to 6000 KVA with a request to sanction the same on 33 KVA line instead of higher 132 KVA. The sanction was accorded on 16.11.2011 with a condition of payment of pro-rata cost of transformer and 3% transformation losses. The demand note was accordingly issued on 24.11.2011 and the required amount, as per demand note, was deposited without any protest and the respondent-consumer was being billed accordingly. However, in Oct 2013, for the very first time, the respondent-consumer approached the CLRC assailing the levy of pro rata cost of transformer and 3% (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (8 of 23) [CW-3840/2016] transformation losses. The CLRC rejected the said prayer on 28.11.2013 against which he approached the learned EO, who vide order impugned dated 25.05.2014, granted the relief as sought for by the respondent-consumer.
SUBMISSIONS OF PETITIONER:
5. Learned counsel for the petitioner-Discom submits that in all the impugned orders, the EO has held that the petitioner-
Discom has no authority in law to recover the cost / pro rata cost of transformer or to levy charges for transformation losses. It is contended that the finding of the EO is contrary to the correct position of law. Learned counsel for the petitioner submits that the EO has not appreciated the fact that the logic behind prescribing certain voltage level according to load category for each consumer is the wastage/loss of electricity in the form of line losses which occurs in delivering certain power from one point to other through any conducting material/wire. In the case of large consumers having concentrated load, power can be supplied at any voltage level but if supplied at low voltage then line losses will increase exponentially in comparison to, if power supply is given at high voltage. Therefore, to compensate for the loss of electricity, 3% is charged as otherwise, and who may bear the losses as it is the national loss of electricity.
6. Learned counsel for the petitioner-Discom further submits that the Electricity Regulatory Commission is authorized to specify the charges and tariff to be recovered by the Licensee and Licensee cannot recover the charges/tariff contrary to it. But sometime situation is such that for certain things the regulations are found silent as was in this case. To implement the same and to (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (9 of 23) [CW-3840/2016] provide guidelines for day to day functioning, commercial circulars are issued by the Discoms. In this case, the relevant circulars dated 14.07.2004 and 09.07.2007 were issued which allowed the petitioner-Discom to recover pro-rata cost of transformer and levy transformation losses @ 3% of the recorded consumption. Learned counsel for the petitioner-Discom submits that as per Section 45 of the Act of 2003, the Discom is authorised to fix charges and recover charges from a consumer and that such charges should be consistent with the Act of 2003 and the Rules and Regulations framed therein. Learned counsel for the petitioner-Discom has drawn attention of this Court to the 'Tariff For Supply Of Electricity-2004' which was issued by the Appropriate Commission under Sections 62 and 64 of the Act of 2003, specifically to the note contained in Tariff Structure Part-II (H.T. Tariff) under Clause (V) which deals with Large Industrial Services (Schedule LP/HT-5). The said note is reproduced as under:
"The Jaipur Discom may at its discretion, provide metering equipments on low voltage side of consumer's transformer and in such a case 3% (three percent) shall be added to the recorded energy consumption & demand, to cover transformation losses."
Relying on the above, learned counsel for the petitioner-Discom contends that as the supply in all these cases was one stage lower than the prescribed supply line, the petitioner-Discom was entitled to recover the transformation losses and the said recovery could not be said to be contrary to the Act of 2003 or the Rules & Regulations framed therein.
(D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (10 of 23) [CW-3840/2016]
7. Learned counsel for the petitioner-Discom further submits that 'The Rajasthan Electricity Regulatory Commission (Electricity Supply Code and Connected Matters) Regulations, 2004' (for short "Supply Code 2004"), issued by the Appropriate Commission in exercise of powers under Sections 43 to 48, 50, 55 and 56 read with section 181 of the Act of 2003 was also amended in 2017 vide Rajasthan Electricity Regulatory Commission in Electricity Supply Code and Connected Matters (Eleventh Amendments) Regulations, 2017 (for short "Amended Regulations") to specifically include cost of HV/EHV transformer on pro rata basis for entire demand and transformation and line losses @ 3% consumption. According to learned counsel for the petitioner-Discom, this amendment goes to show that recovery made by the petitioner-Discom was neither inconsistent nor contrary to the provisions of Act of 2003.
8. Learned counsel for the petitioner-Discom further submits that the order of the EO is also liable to be set aside as the EO failed to consider the well recognized principles of 'estoppel', 'acquiescence', 'delay & laches' and 'aprobate & reprobate'. It is submitted that all the respondent-consumers requested the supply on one stage lower than the prescribed level, perhaps to save cost that would have been incurred to develop the infrastructure required to take supply on high voltage line. As per the Supply Code 2004, the supply to a consumer at a voltage level one stage higher or lower was only permissible in exceptional circumstances. As the same was not a regular practice, the Discom applied the additional conditions of payment of pro-rota cost of transformer and 3% transformation losses. All the (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (11 of 23) [CW-3840/2016] respondent-consumers, with open eyes, consciously accepted the terms and conditions imposed in the contract and continued paying the dues without any demur/protest for several years. It is contended that after enjoying the fruits of the conditions imposed by petitioner-Discom, the respondent-consumers cannot be permitted to turn around and seek refund at a belated stage. In support of his contentions, learned counsel for the petitioner- Discom has relied upon Apex Court judgments of State of Punjab and Ors. vs. Dhanjit Singh Sandhu: (2014) 15 SCC 144, Union of India (UOI) and Ors. vs. N. Murugesan and Ors.:
(2022) 2 SCC 25, and The Rajasthan State Industrial Development and Investment Corporation and Ors. vs. Diamond and Gem Development Corporation Ltd. and Ors.:
AIR 2013 SC 1241, and judgment of Bombay High Court in The Maharashtra State Electricity Distribution Company Ltd.
and Ors. vs. Deesan Agro Tech Ltd. and Ors.: (2021) MahLJ
763.
SUBMISSIONS OF RESPONDENTS:
9. Per contra, in support of the findings arrived at by the expert body/EO in the impugned order(s), it is strenuously contended by learned counsel for the respondent-consumers that there is no illegality nor there exists any infirmity in the impugned orders passed by the EO and in the absence of the same, the present writ petition is not maintainable and the petitioner-Discom is not entitled for any relief from this Court under Article 226 of the Constitution of India. It is further contended that the finding of fact recorded by the learned EO cannot be disturbed under Article 226 of the Constitution of India in the absence of any perversity.
(D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (12 of 23) [CW-3840/2016] The additional submissions of learned counsel for the respondent- consumers are as follows:
9.1) That under the Act of 2003, Discoms have no authority to levy any charge from the consumer, unless the same is prescribed by the Appropriate Commission, which in this case is the Rajasthan Electricity Regulatory Commission (for short "RERC"). It is contended that since the levy of transformation loss and pro rata cost of transformer was not approved/sanctioned by the RERC for the relevant period, the discom could not have, by law, recovered such amount from any consumer. In this regard, learned counsel for the petitioner has relied upon provision of Section 45 (Power to recover charges) and Section 46 (Power to recover expenditure) of the Act of 2003 which specifically state, in clear and unambiguous terms, that discoms are only allowed to recover such charges/expenditures as fixed by the Commission; 9.2) That the order/circular of the respondents dated 14.07.2004 and 09.07.2007, based on which the charge is levied, neither had any statutory basis nor were they ever notified. It is contended that those were internal circulars having no authority in law and could not be said to be binding upon any consumer; 9.3) That the RERC amended the Supply Code 2004 on 09.08.2017 vide Amended Regulations, and only thereafter approved / sanctioned the levy of transformation loss and pro rata cost of transformer. However, the said amendment is prospective in nature and cannot be applied retrospectively to take away the vested right of the petitioner-consumer. It is submitted that sub-
ordinate legislation can neither be made nor applied with retrospective effect to adversely affect concluded transactions.
(D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (13 of 23) [CW-3840/2016] Reliance in this regard is placed on Apex Court judgments of State of West Bengal and Ors. vs. Vishnunarayan and Associates (P) Ltd. and Ors.: (2002) 4 SCC 134, Bishan Das and Ors. vs. The State of Punjab and Ors.: AIR 1961 SC 1570, Harla vs. The State of Rajasthan: AIR 1951 SC 467, and State of Punjab vs. Amar Singh Haruka: AIR 1966 SC 1313;
9.4) That impugned recovery of pro-rata transformer cost is wholly illegal as the cost of transformer is already included in the 'Plant cost' and therefore charging it again would mean double levy on the same thing;
9.5) That the release of connection one step lower was never the conscious option of the respondent-customers. In fact the respondent-customers had repeatedly pressed for releasing the connection on 132 KV line because of entitlement of 2.5% rebate on 132 KV, while they got only 0.75% rebate for 33KV line; 9.6) That as per the sketch submitted before the Court, electricity reaches the consumer's transformer after passing through the consumer's meter and question of transformation losses arises only after the electricity passes through consumer's transformer. Therefore, the consumer's meter records the entire supply of electricity and as a result, no transformation losses occurred in these cases;
9.7) That there is no estoppel against law, and even if the respondent-consumers paid the bills as and when they fell due, it was only out of fear of getting the electricity supply disconnected. Regardless of that, since the petitioner-Discom didn't have the authority to levy those illegal charges, it cannot be said that (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (14 of 23) [CW-3840/2016] respondent-customers are estopped from claiming refund. Further, the Ombudsman is an alternative dispute resolution forum which does not have the trappings of a Court. The procedural laws like CPC and Evidence Act have no application in proceedings before the Ombudsman, which is an expert body with power to set its own procedure.
9.8) That as per the Allahabad High Court judgments of Executive Engineer, Electricity Urban Distribution Division vs. Electricity Ombudsman Lucknow and Ors. (C.M.W.P. No. 47592 of 2010; decided on: 23.08.2010) and Purvanchal Vidyut Vitran Nigam Limited and Anr. vs. Vidyut Lokpal (Electricity Ombudsman) and Anr.: AIR 2008 All 127, an order of Ombudsman is in the nature of an arbitral award which can only be challenged on limited grounds as contained in Section 34 of Arbitration & Conciliation Act, 1996.
ANALYSIS
10. Heard the arguments advanced by both the sides, scanned the record of the writ petitions and considered the judgments cited at Bar.
11. Before proceedings to the merits of the case, it is required to be noted that Division Bench of this Court, in D.B. Special Appeal (Writ) No. 800/2022 titled as 'Jaipur Vidyut Vitran Nigam Limited vs. Electricity Ombudsman & Anr'; decided on 07.09.2022 (Neutral citation: 2022/RJJP/002289), has held that writ petition challenging order of Ombudsman is maintainable.
12. At the outset, it is pertinent to note that all the respondent-consumers were 'Large Industrial' consumer who had (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (15 of 23) [CW-3840/2016] been receiving supply at one stage lower than the prescribed voltage supply. The supply at one stage lower or one stage higher is only permissible in exceptional circumstances. Since the phrase 'exceptional circumstances' is used, it must necessarily mean that the change in supply voltage is not to be done in regular course and it must also necessarily connote that the change in supply voltage would only be permissible on satisfaction of additional terms and conditions. Because if certain additional conditions are not imposed on such consumers, then why anyone will incur huge cost for creating required high voltage level supply infrastructure and on one or other pretext everyone will try to avail supply at lower voltage. In that case, in addition to the loss of energy, the discom will have to create additional infrastructure/facility for such consumers and cost of the same will reflect in the tariff and all other electricity consumers will have to bear this burden in their electricity bills.
13. The said practice, of availing supply of electricity at one stage lower than the prescribed line, continued for a time period ranging from two years in some case to five years in other cases. For the entirety of that period, the respondent-consumers continued to abide by the terms and conditions imposed upon them by the petitioner-discom. The respondent-customers paid the cost / pro-rata cost of the transformer and continued paying the transformation losses @ 3% for each billing cycle. Though the learned counsel for the respondent-customers has contended that the respondent-customers were forced to avail supply on the lower supply line despite their wishes to the contrary, and that they paid the dues under protest, there is nothing on record to (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (16 of 23) [CW-3840/2016] justify said contentions. Rather, the record reflects that the respondent-customers had consented to the terms and conditions imposed upon them by the petitioner-Discom, paid the demand note and then continued paying the subsequent bills which contained the charge for transformation losses as well for the period ranging from 2 years to 5 years, as the case may be. At this point, it would be apposite to consider the provisions of Sections 3, 8, and 39 of the Indian Contract Act, 1872, which are reproduced as under:
"3.Communication, acceptance and revocation of proposals.--The communication of proposals, the acceptance of proposals, and the revocation of proposals and acceptances, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating it.
8. Acceptance by performing conditions, or receiving consideration. --Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.
39. Effect of refusal of party to perform promise wholly.--When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.
Emphasis supplied"
From the conjoint reading of the above quoted provisions, it can safely be concluded that the respondent-customers, by their conduct, had accepted the terms of the contract for supply of electricity.
14. In order to make a contract concluded, there must be a proposal. In this case, that was the sanction/demand note which (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (17 of 23) [CW-3840/2016] specified the impugned conditions necessary for supply of electricity on one stage lower than the prescribed line; there must also be a consideration for the promise. In this case, the demand note and subsequent electricity bills for a period of 2-5 years was the said consideration; the proposal must be accepted, which must be communicated, and the acceptance must be unqualified. In this case, the fact that the respondent-consumers paid the demand note and continued paying the subsequent electric bills for a period of 2-5 years would construe acceptance as well. It is undisputed that all the respondent-consumers entered into a contract with the petitioner-Discom for supply of electricity at one stage lower than the prescribed level. The subject matter of the contract, the position of the parties, the implications of the working of the contract and more importantly, the intention and conduct of the parties persuade this Court to safely gather that there was a concluded contract. Once it is established that respondent-customers have accepted the terms and conditions imposed upon them without any protest, the principles of 'estoppel', 'acquiescence', 'delay & laches' and 'aprobate & reprobate' would undoubtedly come into play.
15. The above-said principles have been well recognized now and have been recently been explained in great detail by the Hon'ble Supreme Court in the case of UOI vs. N Murugesan (supra), the relevant part of which is reiterated below:
"18. Section 3 of the Act concerns itself with an act of communication, acceptance, and revocation of proposal. When an offer is made, it is required to be accepted by the receiver to partake the character of a concluded contract. Hence, the knowledge of the terms of the offer is a primary and essential factor for acceptance. To understand this better, when an (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:19 PM) [2023/RJJP/003812] (18 of 23) [CW-3840/2016] acceptance is made in an unqualified manner, it takes in its sweep the said acceptance along with the knowledge of the terms of the offer. This is for the reason that an unaccepted offer creates neither any right nor obligation. Such an acceptance as existing under Section 7 of the Act must both be absolute and unqualified. As per Section 8, the performance of the conditions of a proposal or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal is an acceptance of the proposal. Hence, an absolute and unqualified acceptance would give birth to the contract along with the terms of the offer.
19. Section 39 deals with the effect of the refusal of the party to perform a promise wholly. Though we are not concerned with this provision, this provision is the only one that speaks of the concept of acquiescence, which could be signified by words or conduct, being an exception for terminating the contract. Under this provision, a promisee may put an end to the contract unless there exists an element of acquiescence that could be seen and exhibited through his words or conduct. Obviously, such a contract which would also involve words or conduct, is to be seen on the facts of each case.
Delay, Laches and Acquiescence:
20. The principles governing delay, laches, and acquiescence are overlapping and interconnected on many occasions. However, they have their distinct characters and distinct elements. One can say that delay is the genus to which laches and acquiescence are species. Similarly, laches might be called a genus to a species by name acquiescence. However, there may be a case where acquiescence is involved, but not laches. These principles are common law principles, and perhaps one could identify that these principles find place in various statutes which restrict the period of limitation and create non-consideration of condonation in certain circumstances. They are bound to be applied by way of practice requiring prudence of the Court than of a strict application of law. The underlying principle governing these concepts would be one of estoppel. The question of prejudice is also an important issue to be taken note of by the Court.
Laches:
21. The word laches is derived from the French language meaning "remissness and slackness". It thus involves unreasonable delay or negligence in pursuing a (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:20 PM) [2023/RJJP/003812] (19 of 23) [CW-3840/2016] claim involving an equitable relief while causing prejudice to the other party. It is neglect on the part of a party to do an act which law requires while asserting a right, and therefore, must stand in the way of the party getting relief or remedy.
22. Two essential factors to be seen are the length of the delay and the nature of acts done during the interval. As stated, it would also involve acquiescence on the part of the party approaching the Court apart from the change in position in the interregnum.
Therefore, it would be unjustifiable for a Court of Equity to confer a remedy to a party who knocks its doors when his acts would indicate a waiver of such a right. By his conduct, he has put the other party in a particular position, and therefore, it would be unreasonable to facilitate a challenge before the Court. Thus, a man responsible for his conduct on equity is not expected to be allowed to avail a remedy.
23. A defence of laches can only be allowed when there is no statutory bar. The question as to whether there exists a clear case of laches on the part of a person seeking a remedy is one of fact and so also that of prejudice. The said principle may not have any application when the existence of fraud is pleaded and proved by the other side. To determine the difference between the concept of laches and acquiescence is that, in a case involving mere laches, the principle of estoppel would apply to all the defences that are available to a party. Therefore, a defendant can succeed on the various grounds raised by the plaintiff, while an issue concerned alone would be amenable to acquiescence.
Acquiescence:
24. We have already discussed the relationship between acquiescence on the one hand and delay and laches on the other. Acquiescence would mean a tacit or passive acceptance. It is implied and reluctant consent to an act. In other words, such an action would qualify a passive assent. Thus, when acquiescence takes place, it presupposes knowledge against a particular act. From the knowledge comes passive acceptance, therefore instead of taking any action against any alleged refusal to perform the original contract, despite adequate knowledge of its terms, and instead being allowed to continue by consciously ignoring it and thereafter proceeding further, acquiescence does take place.
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25. As a consequence, it reintroduces a new implied agreement between the parties. Once such a situation arises, it is not open to the party that acquiesced itself to insist upon the compliance of the original terms. Hence, what is essential, is the conduct of the parties. We only dealt with the distinction involving a mere acquiescence. When acquiescence is followed by delay, it may become laches. Here again, we are inclined to hold that the concept of acquiescence is to be seen on a case-to-case basis.
Approbate and Reprobate:
26. These phrases are borrowed from the Scott's law. They would only mean that no party can be allowed to accept and reject the same thing, and thus one cannot blow hot and cold. The principle behind the doctrine of election is inbuilt in the concept of approbate and reprobate. Once again, it is a principle of equity coming under the contours of common law. Therefore, he who knows that if he objects to an instrument, he will not get the benefit he wants cannot be allowed to do so while enjoying the fruits. One cannot take advantage of one part while rejecting the rest. A person cannot be allowed to have the benefit of an instrument while questioning the same. Such a party either has to affirm or disaffirm the transaction. This principle has to be applied with more vigour as a common law principle, if such a party actually enjoys the one part fully and on near completion of the said enjoyment, thereafter questions the other part. An element of fair play is inbuilt in this principle. It is also a species of estoppel dealing with the conduct of a party. We have already dealt with the provisions of the Contract Act concerning the conduct of a party, and his presumption of knowledge while confirming an offer through his acceptance unconditionally."
Further, in the case of the Dhanjit Singh Sandhu (supra), the Hon'ble Supreme Court observed as under:
"23. It is settled proposition of law that once an order has been passed, it is complied with, accepted by the other party and derived the benefit out of it, he cannot challenge it on any ground. (Vide Maharashtra State Road Transport Corporation v. Balwant Regular Motor Service, Amravati and Ors.: AIR 1969 SC 329). In R.N. Gosain v. Yashpal Dhir: AIR 1993 SC 352, this Court has observed as under:
(D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:20 PM) [2023/RJJP/003812] (21 of 23) [CW-3840/2016] "Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that 'a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage'."
24. This Court in Sri Babu Ram Alias Durga Prasad v. Sri Indra Pal Singh (Dead) by L.Rs.: AIR 1998 SC 3021, and P.R. Deshpande v. Maruti Balram Haibatti:
AIR 1998 SC 2979, the Supreme Court has observed that "8. The doctrine of election is based on the rule of estoppel the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppel in pais (or equitable estoppel), which is a rule in equity. By that law, a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he otherwise would have had."
25. The Supreme Court in The Rajasthan State Industrial Development and Investment Corporation and Anr. v. Diamond and Gem Development Corporation Ltd. and Anr.: AIR 2013 SC 1241, made an observation that a party cannot be permitted to "blow hot and cold", "fast and loose" or "approbate and reprobate". Where one knowingly accepts the benefits of a contract or conveyance or an order, is estopped to deny the validity or binding effect on him of such contract or conveyance or order. This rule is applied to do equity, however, it must not be applied in a manner as to violate the principles of right and good conscience.
26. It is evident that the doctrine of election is based on the rule of estoppel the principle that one cannot (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:20 PM) [2023/RJJP/003812] (22 of 23) [CW-3840/2016] approbate and reprobate is inherent in it. The doctrine of estoppel by election is one among the species of estoppel in pais (or equitable estoppel), which is a rule of equity. By this law, a person may be precluded, by way of his actions, or conduct, or silence when it is his duty to speak, from asserting a right which he would have otherwise had.
Emphasis supplied"
16. As per the dictum of above quoted judgments, the impugned orders of the EO are liable to be set aside on the grounds of delay & laches, acquiescence, and aprobate & reprobate alone as the respondent-customers acquiesced to the terms and conditions imposed upon them and continued paying the due amount for a substantially long period of 2-5 years, as the case may be.
17. Even on merits, this Court has held the levy of cost / pro rata cost of transformer and transformation losses prior to the 2017 amendment in Supply Code 2004 as valid and legal in the case of National Engineering Industries Limited vs. State of Rajasthan & Ors. (S.B. Civil Writ Petition No. 14226/2019).
18. The Aurungabad Bench of Bombay High Court also had the occasion to consider similar controversy in the case of Deesan Agro Tech (supra). After consideration of the controversy, the Bombay Court also reached to a similar conclusion, the relevant part of which is reproduced as under:
"26. In case of Writ Petition No. 6384/2020, the CGRF has directed to refund cost of metering cubicle as well as infrastructural cost but as is observed earlier, while filing the grievance with ICGRC, no such claim for refund of infrastructural cost was raised, as can be seen from the letter submitted by the Consumer therein with the Superintending Engineer dated 05.08.2019 (Exhibit-E).
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27. In this respect, it is also pertinent to note that although a Distribution Licensee is under statutory obligation to provide electricity supply, in a given case like the present ones, the Consumers have opted to succumb to the demand of the Distribution Licensee wherein by separate communications, terms and conditions were put to them subject to which they were supposed to enter into an agreement and receive electricity supply. The terms and conditions inter alia require them to bear the expenditure on a non-refundable basis. After having availed of the benefit, they cannot now be allowed to turn around and claim refund. They could have very well insisted for supply of electricity strictly in accordance with the provisions of the Electricity Act and the Regulations framed thereunder. They having agreed to bear such infrastructural costs and agreed to purchase meters and metering cubicles, the Distribution Licensee cannot be said to be under any statutory obligation to refund the infrastructural cost and metering cubicles cost. This is what was apparently concluded by the ICGRC.
28. Without considering all these aspects, by the impugned orders the CGRF has allowed the grievance of the Consumers and directed refund, which orders and directions are clearly perverse, arbitrary and capricious.
29. In the result, the Writ Petitions are allowed. The impugned judgments and orders passed by the CGRF are quashed and set aside. The Rule is made absolute accordingly in each of these petitions.
RESULT
19. In view of the above, all the impugned orders of the EO are quashed and set aside.
20. All these writ petitions are allowed. Pending application(s), if any, shall stand disposed of.
(SAMEER JAIN),J Raghu/JKP/66-69 (D.B. SAW/593/2023 has been filed in this matter. Please refer the same for further orders) (Downloaded on 11/11/2023 at 05:40:20 PM) Powered by TCPDF (www.tcpdf.org)