Orissa High Court
Niranjan Das vs Orissa State Electricity Board on 1 August, 2003
Equivalent citations: AIR2004ORI53, 2004(1)CTLJ229(ORI), AIR 2004 ORISSA 53, (2003) 96 CUT LT 528
Author: A.K. Patnaik
Bench: A.K. Patnaik
JUDGMENT A.K. Patnaik, J.
1.This is a second appeal under Section 100 of the Code of Civil Procedure, 1908 (for short, "the CPC").
2. The relevant facts briefly are that the appellant is the proprietor of a saw mill styled as "Bhanja Saw Mill". Under an agreement dated 11.2.1972 the respondent supplied electricity to the said saw mill of the appellant. The respondent filed Money Suit No. 1 of 1984 against the appellant for recovery of Rs. 13,979.83 paise towards balance energy charges and other charges upto April, 1983 and for recovery of Rs. 1,797.38 paise towards interest at the rate of 12 per cent per annum from 31.12.1982 till 3.1.1984. The case of the respondent in the suit was that the agreement for supply of electricity stood terminated from April, 1983 on expiry of six months from the notice dated 22.10.1982 of the appellant to terminate the agreement and the appellant was liable to energy charges upto April, 1983. The appellant contested the said suit and in his written-statement pleaded, inter alia, that the agreement for supply of electricity was for a period of five years and the appellant requested the respondent by letter dated 20.11.1976 to terminate the agreement arid disconnect the power supply, but the respondent did not disconnect power supply and instead, continued to raise electricity bills on the appellant, the learned Subordinate Judge, Bhanjanagar, found that the respondent did not treat the said letter dated 20.11.1976 of the appellant marked as Ext. B. as a notice of intention of the appellant to terminate the agreement on the ground that the appellant had availed supply of energy and deposited energy charges even after the said notice dated 20.11.1976. The learned Subordinate Judge further found that in the letters Exts. 3, 6, 9 and 11 there was nothing to show that the appellant had requested the Electricity Department either to restore the connection or that the appellant had admitted using the energy for the purpose of running his mill and it appeared that the appellant had given the said letters out of disgust and has also agreed out of disgust to pay the charges levied by the Electricity Department from time to time and has paid the instalments. The learned Subordinate Judge held that the agreement for supply of electricity remained in force for a period of six months from the letter dated 20.11.1976, i.e., upto 19.5.1977, and the bills raised by the respondent beyond 19.5.1977 are void and the appellant was not liable to pay the said bills. The learned Subordinate Judge further held that the appellant had paid the energy charges upto April, 1975 and dismissed the suit of the respondent by his judgment and decree dated 8.4.1985.
3. The respondent filed Money Appeal No. 7 of 1985 in the Court of the learned Second Additional District Judge, Berhampur. The learned Second Additional District Judge after hearing the parties held that the agreement (Ext. 1) initially continued for a period of five years from 11.2.1972 to 11.2.1977 and the letter dated 20.11.1976 (Ext. B) of the appellant was prior to the expiry of the said period of five years and this could not have been accepted by the respondent in view of the provision in Clause 1 of the agreement that the agreement was to be for a period of five years. The learned Second Additional District Judge further held that from the letters (Exts. 3, 6, 9 and 11) of the appellant it is clear that the appellant has acknowledged and agreed to pay the dues towards energy charges to the respondent and he cannot later on say that he cannot pay the same as he is bound under Section 18 of the Limitation Act. The learned Second Additional District Judge also held that even after disconnection of power supply, the appellant was liable to minimum charges till termination of the agreement for supply of electricity. After discussing the decisions in the case of Watkins Mayor & Co. v. Jullundur Electric Supply Co. Ltd., AIR 1955 Punjab 133, and Andhra Pradesh State Electricity Board v. Krishivali Khandasari Sugar Industry and Ors., AIR 1984 Andhra Pradesh 360, the learned Second Additional District Judge held that the finding of the learned Subordinate Judge that the agreement stood terminated pursuant to the letter dated 20.11.1976 (Ext. B) and remained in force till 19.5.1977 is not correct and the real termination of the agreement took place only on expiry of six months from the second notice dated 22.10.1982 (Ext. 8) as claimed by the respondent. On the basis of the said findings, the learned Second Additional District Judge allowed the appeal and decreed the suit of the respondent by his judgment and decree dated 28.8.1986.
4. Aggrieved by the said judgment and decree of the learned Second Additional District Judge, the appellant has filed this Second Appeal under Section 100 of the CPC on 7.5.1987, this appeal was admitted on the substantial questions of law enunciated in ground Nos. 2(i), 2(ii), 2(iii), 2(v) and 2(viii) of the memorandum of appeal. Thereafter on 20.3.2003 when the appeal was taken up for hearing, the Court formulated the following substantial questions of law which arose for decision in this appeal :
"(i) Whether the communication dated 20.11.1976 of the defendant to the plaintiffs in Ext. B is a notice to terminate the agreement for supply of electricity within the meaning of Clause 1 of the agreement for supply of electricity in Ext. 1 ?
(ii) Whether the finding of the first appellate Court that Ext. B dated 20.11.1976 being prior to expiry of five years of the agreement dated 11.2.1972 could not be a notice for termination of the agreement in terms of Clause-1 of Ext. 1 ?
(iii) Whether the first appellate Court was right in holding that the defendant had acknowledged and agreed to pay the dues for the period beyond the date of expiry of the agreement on 11.2.1977 and for this reason, he was liable to pay, the suit amount under the provisions of Section 18 of the Limitation Act ?"
Thereafter the matter was adjourned. On 17.4.2003, after hearing the learned counsel for the appellant and the respondent, the Court formulated the following additional substantial question of law :
"Whether the appellant was liable to pay minimum charges for any period after power supply was disconnected on 25.3.1980, if so, for what period."
Mr. G. Mishra, learned counsel for the appellant and Mr. B. K. Nayak, learned counsel for the respondent Were heard on all the aforesaid substantial questions of law including the additional substantial question of law.
5. Mr. Goutam Mishra, learned counsel appearing for the appellant, submitted that it will be clear from Clause 1 of the agreement (Ext. 1) that the agreement for supply of electricity was to be in force for a period of five years commencing from 11.2.1972 and was thereafter to continue unless and until the same was determined by either party giving to the other six calendar months' notice in writing of his intention to terminate the agreement. He submitted that the letter dated 20.11.1976 of the appellant to the Executive Engineer (Electrical Division), Bhanjanagar, (Ext. B) would show that the business of the saw mill had almost come to a stand still and yet the appellant was being saddled with minimum charges and the appellant while agreeing to pay the arrear charges requested the Executive Engineer to disconnect the power supply to the saw mill of the appellant and to refund the security deposit. According to Mr. Mishra, this was a notice in terms of said Clause 1 of the agreement (Ext. 1) to terminate the agreement for supply of the electricity. Mr. Mishra vehemently argued that the appellant for this reason was not liable for any bill for the period after expiry of six calendar months from the said notice dated 20.11.1976. Mr. Mishra next submitted that in any case admittedly power supply to the saw mill of the appellant was disconnected on 23.5.1980 and the evidence of P.W. 1 would show that as on 14.5.1980, an amount of Rs. 7,562.79 paise was due to more than the said amount has been paid by the appellant in instalments during the period after 14.5.1980. Mr. Mishra submitted that the findings of the learned Subordinate Judge that the appellant was not liable for the suit amount should be sustained and the suit should be dismissed and the judgment and decree of the learned Second Additional District Judge should be set aside.
6. Mr. B. K. Nayak, learned counsel appearing for the respondent, on the other hand, sought to sustain the judgment and decree passed by the learned Second Additional District Judge and submitted that despite the letter dated 20.11,1976 (Ext. B) requesting the Executive Engineer to disconnect the power supply and to refund the security deposit, the appellant continued to avail the power supply and continued to pay the energy charges. According to Mr. Nayak, therefore, the Second Additional District Judge was right in coming to a conclusion that the agreement for supply of electricity could not be treated as terminated pursuant to the letter dated 20.11.1976 (Ext. B) given by the appellant to the respondent. Mr. Nayak further submitted that even though electricity supply was disconnected on 5.3.1983, so long as the agreement for supply of electricity remained in force and the agreement was not terminated, the appellant was liable for minimum charges. In this context, he referred to the provisions of the Orissa State Electricity Board (General Conditions of Supply) Regulations, 1981 and in particular Regulation 31 (e) thereof which provides that every consumer shall during the continuance of an agreement also pay, when required, the monthly minimum charge even if no electricity is consumed for any reason, whatsoever, or supply has been disconnected. He argued that the appellant will, therefore, be liable for minimum charges even after the power supply to the saw mill of the appellant was disconnected on 23.5.1980 and such liability will continue upto the date of termination of the agreement for supply of electricity. In support of the aforesaid submission, Mr. Nayak cited the decisions of the Supreme Court in Orissa State Electricity Board v. Orissa Tiles Limited, 76 (1993) CLT 1 (SC) and in Bihar State Electricity Board, Patna and Ors. v. Green Rubber Industries and Ors., AIR 1990 SC 699.
7. The first substantial question of law which arises for decision in this Second Appeal is whether the letter dated 20.11.1976 of the respondent (sic.) (Ext. B) is a notice to terminate the agreement for supply of electricity within the meaning of Clause 1 of the agreement for supply of electricity in Ext. 1. Clause 1 of the agreement in Ext. 1 is quoted herein below :
"1. This agreement shall continue to be in force for a period of (5) five years commencing from 11.2.72 and thereafter shall so continue unless and until the same shall be determined by either party giving to the other, six calendar months' notice in writing of his intention to terminate this Agreement."
It will be clear from the language of the aforesaid Clause 1 of the agreement in Ext. 1 that the agreement was to continue for a period of five years from 11.2.1972 and thereafter unless and until the same was determined by either party giving to the other six calendar months' notice in writing of his intention to terminate the agreement. What is required by the said Clause 1 of the agreement is that either party should give six calendar months' notice in writing of "his intention to terminate the agreement". A plain reading of the letter dated 20.11.1976 of the appellant to the respondent (Ext. B) which is in Oriya would show that the appellant requested the respondent to disconnect the power supply and to refund the security deposit on account of the fact that even though his saw mill was almost closed he was having to pay minimum charges. The appellant had thus given notice to the respondent of his intention to terminate the agreement for supply of electricity to his saw mill. The first substantial question of law is thus answered in favour of the appellant.
8. The second substantial question of law which arises for decision in this second appeal is whether the finding of the first appellate Court that Ext. B dated 20.11.1976 being prior to expiry of five years of the agreement dated 11.2.1972 could not be a notice for termination of the agreement in terms of Clause 1 of Ext. 1. Clause 1 of the agreement provides that the agreement shall continue to be in force for a period of five years from 11.2.1972. Hence the agreement has to remain in force up to 11.2.1977 but this does not mean that either party cannot give a notice of his intention to terminate the agreement before the expiry of five years from 11.2.1972. Thus, while notice of intention to terminate the agreement may be given by either party before 11.2.1977, the agreement will continue to remain in force up to 11.2.1977 and thereafter till the expiry of six calendar months from the date of the notice. In the present case, if the appellant has given notice dated 20.11.1976 to the respondent of his intention to terminate the agreement, the agreement will continue to remain in force for the entire period of five years upto 11.2.1977 and thereafter till expiry of the period of six calendar months from the date of the notice, i.e., upto 19.5.1977. The finding of the first appellate Court that Ext. B. dated 20.11.1976 being prior to the expiry of five years of the agreement (Ext. 1) could not be treated as a notice for termination of the agreement therefore is not correct and the second substantial question of law is answered in favour of the appellant.
9. The third substantial question of law which arises for decision in this Second Appeal is whether the first appellate Court was right in holding that the defendant had acknowledged and agreed to pay the dues for the period beyond the date of expiry of the agreement on 11.2.1977 and for this reason, he was liable to pay the suit amount under the provisions of Section 18 of the Limitation Act. Section 18(1) of the Limitation Act, 1963 provides that where, before the expiration of the prescribed period for filing a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. Hence Section 18 of the Limitation Act, 1963 provides for extension of the period of limitation for filing of a suit or an application from the date acknowledgment and has no relevance where the contention of the appellant is that the agreement for supply of electricity between the appellant and respondent had come to an end on expiry of six calendar months from the date of the letter dated 20.11.1976 (Ext. B) of the appellant to the respondent. The question, however, remains as to whether by his letters Exts. 3, 6, 9 and 11 the appellant had agreed to pay the dues towards energy charges to the respondent. All the said letters in Exts. 3, 6, 9 and 11 are of the year 1982 whereas the electricity supply to the saw mill of the appellant had been disconnected as per the case of the respondent in the plaint and the evidence of P.W. 1 on 25.3.1980. From the contents of the said letters in Exts. 3, 6, 9 and 11 which are all in Oriya, it appears that the appellant had been protesting that although the electricity supply has been disconnected in the year 1980, minimum charges are being levied by the respondent on the appellant and the appellant is being compelled to pay the same. A party is said to have agreed to do something only if he does so out of his own free will and consent and not if he is compelled to do so. If on account of such compulsion, the appellant has yielded to pay the arrear minimum charges in instalments in some of his said letters in Exts. 3, 6, 9 and 11, the Court cannot hold that the appellant has agreed to pay the dues for the period beyond the date of expiry of the agreement. The third substantial question of law is accordingly answered in favour of the appellant.
10. The additional substantial question of law which arises for decision in this Second Appeal is whether the appellant was liable to pay minimum charges for any period after power supply was disconnected on 25.3.1980, if so, for what period. Even though the six calendar months' period of the notice dated 20.11.1976 of the appellant to the respondent in Ext. B expired on 19.5.1977, the appellant continued to be supplied with power during the period from 19.5.1977 to 25.3.1980. Section 70 of the Indian Contract Act is quoted herein below :
"70. Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."
The aforesaid Section 70 casts an obligation on a party to compensate another party who has done something for him non-gratuitously independent of the obligations under an agreement. The respondent supplied electricity, the saw mill of the appellant during 19.5.1977 to 25.3.1980 without any gratuitous intention. Thus, although the agreement for supply of electricity between the appellant and the respondent came to an end on 19.5.1977, under Section 70 of the Indian Contract Act, the appellant is liable to the respondent for the charges for supply of electricity upto 25.3.1980. P.W. 1 has stated in his evidence that upto May, 1980 a total sum of Rs. 7,562.79 paise towards energy charges was to be paid by the appellant to the respondent. The Ledger of the respondent (Ext. 2) indicates that during the period June, 1982 to February, 1983, the appellant has paid nine monthly instalments of Rs. 1,500/- each totalling to Rs. 13,500/-. Hence, the appellant has paid more than the dues upto May, 1980 when power supply to the saw mill of the appellant was disconnected. The decisions of the Supreme Court in Orissa State Electricity Board v. Orissa Tiles Ltd. and Bihar State Electricity Board v. Green Rubber Industries (supra) are in cases where the agreement for supply of electricity remained in force even after disconnection of power supply, but in the present case, after the termination of the agreement for supply of electricity, power supply to the saw mill has been disconnected and the appellant cannot be liable for minimum charges after such disconnection. The additional substantial question of law is answered accordingly.
11. In the result, the Second Appeal is allowed, the impugned judgment and decree of the learned Second Additional District Judge, Berhampur are set aside and the suit of the respondent is dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs.