Patna High Court
Bihar State Electricity Board And Ors. vs Sri Bir Ispat on 19 May, 1998
Equivalent citations: 1998(3)BLJR1985
Author: R.A. Sharma
Bench: R.A. Sharma, A.K. Prasad
JUDGMENT R.A. Sharma, J.
1. Being aggrieved by the electricity bills for the months of February, 1996 to November, 1996, raised on the basis of 42 H.P, bad under category LTIS-II, instead of raising the same at 10 H.P. under category LT1S-1, the sole respondent herein, namely, M/s. Sri Bir Ispat (hereinafter to be referred to as the consumer) filed C.W.J.C. No. 148 of 1997 (K) before this Court. The said writ petition having been allowed, the appellant Bihar State Electricity Board and its officials (hereinafter referred to as the Board) have filed this appeal.
2. We have heard learned Counsel for the parties.
3. The consumer, a partnership firm, is running a small scale industrial unit situated at Mohanpur, Tundi Road, Giridih, for processing of iron scrap. It applied for 10 H.P. electrical energy under Low Tension Tariff before the Board, which was sanctioned vide letter dated 17.8.1995. An agreement in connection therewith was also executed between the Board and the consumer.
4. The consumer received a registered letter dated 8.3.1996 from the Board mentioning that at the time of inspection of its premises on 22.2.1996-the total load of 41.28 H.P. was found. The consumer was accordingly advised to enter into an agreement of 42 H.P. load, instead of 10 H.P. earlier entered into on 24.9.1995. The consumer was further directed to deposit the additional security. Alone with the said letter a bill for the month of February, 1996, for 68,494.05 paise prepared on the basis of 42 H.P. load was also sent to it for payment. The consumer raised objection against the said letter, the bill and the notice of demand denying the claim of the Board of inspection of its premises by their officials on 22.2.1996 and requesting for correction of the said bill on the basis of 10 H.P. load. But no action was taken on the said objection of the consumer. The Board sent bills for the subsequent months to the consumer regularly on the basis of 42 H.P. load, against which the consumer continued to make representations. Ultimately, the consumer asked the Board to supply the copy of the alleged inspection report dated 22.2.1996, which request too was not complied with. On receipt of such objections, and representations, the consumer's premises was again inspected by the officials of the Board on 30.10.1996, on which date it was found having contracted load of 10 H.P. The consumer pursuant to the subsequent inspection report requested the Board for correction of all the bills raised on the basis of 42 H.P. from February, 1996 onward and for issuance of fresh bills for the said period on the basis of 10 H.P. load. The Board not having acceded to the said request the consumer has filed the writ petition.
5. The learned single Judge allowed the writ petition holding, inter alia, that the inspection report dated 22.2.1996 was not signed by all the four officials of the Board, who conducted the inspection and instead it has been signed by only one of them that the inspection was neither conducted in presence of the consumer or its representative nor was the copy of the inspection report given to the consumer or its agent before issuing the impugned bills. The learned Single Judge, accordingly, while allowing the writ petition directed the Board to revise all the monthly bills raised since February, 1996 onwards on the basic of 10 H.P. load. The Board was, however, given liberty to inspect the premises of the consumer afresh, and, if ultimately it is found that the consumer is using more than 10 H.P. load, to proceed in the matter in accordance with law, after serving a copy of the inspection report on it. The amount of Rs. 47,000/- deposited by the consumer by virtue of the interim order passed in the writ petition was directed to be adjusted towards the bills, which may be raised afresh.
6. The learned Counsel for the Board has made two submissions in support of the appeal, namely, (i) there is either any provision in the Tariff of 1993 (hereinafter to be referred as the Munsif) nor is there any thing in the General Conditions and Scale of Miscellaneous Charges. For supply of electrical Energy (hereinafter referred to as the General Conditions) providing for giving of notice and copy of the inspection report to the consumer before raising the electricity bills on the basis of inspection report and in absence of such a provision neither a copy of the inspection report is required to be given to the consumer nor is it necessary to prepare fresh bills on the basis of enhanced electricity load in accordance with the principles of natural justice; and (ii) the consumer is guilty of electrical theft and, therefore, this Court should not interfere in such matters.
7. The learned Counsel for both the parties have admitted that in the present case, 1993 Tariff will apply, para 3 of which has laid down that the terms and conditions of supply of electricity as also the rate of tariff shall be governed by the said tariff and if the terms and conditions of the agreement entered into between the Board and its consumers arc at variance with the terms and conditions of the said tariff, the tariff shall prevail and such agreement will be deemed to have been amended accordingly. According to para 4 of the Tariff, which is reproduced below, the other terms and conditions of supply of electrical energy by the Board, will continue to be regulated by the General Conditions as amended from time to time by the Board:
4. Subject to the provisions of paragraph 3 of this notification, the other terms and conditions of supply of electricity by the Board not specially provided for in this tariff or in the agreement entered into with the consumer will continue to be regulated by the General Conditions and Scale of Miscellaneous charges for supply of electrical energy as notified in their Notification No. B1RH-101/54-E-1105-ELPC dated the 10th November, 1954 as amended from time to time by the Bihar State Electricity Board.
Para 16.9 of the Tariff, which is also reproduced below, gives power to the Board to estimate the value of the electrical energy and calculate the same in accordance with the criteria laid down therein if at any time the consumer is found exceeding the contracted load without specific permission of the Board:
16.9. (A) Detection of unauthorised load.-If at any time the consumer is found exceeding the contracted load without specific permission of the Board, the Board may, without prejudice to its other rights under the agreement or under the provisions of the Electricity Act, estimate the value of the electrical energy, so extracted, consumed or used shall be calculated as below and may also disconnect the supply without notice-
1. Necessary assessment for compensation in the following malpractice and theft of energy cases shall be made as below:
(a) In cases of use of energy through artificial means or by adopting any appliance.
(b) In case of using energy by creating obstruction in running of meters or interfering with supply or wires etc.
(c) In case of dishonest obstruction of electrical energy or running of energy when supply is disconnected...
8. Clauses 11 of the General Conditions prohibit the consumers from increasing the electricity load except after a notice in writing to the Board. By Clauses 13 which is quoted below, the officials of the Board are entitled to enter into the premises to which the energy is supplied for the purpose of inspection:
13. Access to premises and apparatus-The department's servants are entitled by statute all reasonable times, to enter upon premises to which the energy in supplied, for the purposes of inspecting meters and for other purposes connected with apparatus belonging to the department.
9. The Board's officials are empowered to inspect the consumer's premises. As the inspection is carried out in order to find out/detect the use of unauthorised load and other irregularities in consumption of the electricity, it is not necessary for the Board to give advance notice about the inspection to the consumer, because such a notice will frustrate the very purpose of the surprise inspection. But inspection must be made in the presence of the consumer of his representative if available on the spot. If they are either not available or are not willing to co-operate with the officials in the inspection, it will be open to the Board to carry on the inspection. But fairness demands that in such a case as far as possible the inspection must be done in presence of some independent persons other than the employees of the Board. If at the time of inspection, the consumer is found using the electricity in excess of the contracted load and/or is guilty of other irregularities/illegalities in connection with the electricity supply he must be supplied with the inspection report and given a show cause notice before passing any order against him. Before imposing any additional liability in the form of electricity charges, it is necessary that the consumer must be given a reasonable opportunity of being heard. In absence of such procedural safeguards, if any order is passed or electricity bills are raised adversely effecting the consumer the same are liable to be declared as arbitrary and unfair. In the instant case, the impugned order/bills have been passed without giving any opportunity of being heard to the petitioner. Therefore, they cannot be sustained.
10. It is true that there is no provision in the tariff and the General Conditions requiring supply of inspection report and giving of show cause notice before passing an order adverse to the consumer. But that is not conclusive regarding the applicability of the principles of fair play and natural justice. It is now well settled that the, power/discretion without proper guidelines or the procedure results in arbitrariness offending the Article 14 of the Constitution. In this connection reference may be made to Smt. Menka Gandhi v. Union of India and Anr. , wherein while dealing with the requirement of Article 14 of the Constitution the Apex Court has laid down as under-
...We must reiterate here what was pointed out by the majority in E.P. Rayappa v. State of Tamil Nadu namely, that from a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic, while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Article 14." Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non-arbitrariness pervades Article 14 like a brooding omnipresence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14. It must be "right and just and fair" and not arbitrary, fanciful or oppressive:...
The Court further laid down that even if there are no positive words in the statute requiring that a party shall be heard, yet justice of the common law will supply the omission of the legislature. The Court observed that the "natural justice is a great humanising principle intended to invest law with fairness and to secure justice", which must be followed irrespective of the fact whether the power is being exercised in administrative or quasi judicial manner. The law laid down in the above case has been reiterated by the Supreme Court in the subsequent cases. It is sufficient to refer three of such cases only, namely, Delhi Transport Corporation v. D.T.C., Mazdoor Congress and Ors. , wherein in paragraph No. 199 in this connection it has been laid down as under-
...It is now well settled that the 'audi alteram partem' rule which in essence, enforces the equality clause in Article 14 of the Constitution is applicable not only to quasi judicial orders but to administrative orders affecting prejudicially the party in question unless the application of the rule has been expressly excluded by the Act or Regulation or Rule which is not the case here. Rules of natural justice do not supplant but supplement the Rules and Regulations....
The Apex Court has held that the principles of natural justice, reasonableness and non-arbitrariness are the integral part of the equality clause as contained in Article 14 of the Constitution.
11. In Ramana Dayaram Shetty v. The International Airport Authority of India and Ors. , the Supreme Court in this connection observed as under-
...Whatever be the concept of the rule of law, whether it be the meaning given by Dicoy in his "The Law of the Constitution" or the definition given by Hayek in his "Road to Serfdom" and "Constitution of liberty" or the exposition set forth by Herry Jones in his "The Rule of Law and Welfare State", there is, so pointed out by Mathew, J., in his article on "The Welfare State, Rule of Law and Natural Justice" in Democracy, Equality and Freedom" substantial agreement in juristic thought that the great purpose of the rule of law notion is the protection of the individual against arbitrary exercise of power, wherever it is found: It is indeed unthinkable that in a democracy governed by the rule of law the executive Government or any of its officers should possess Arbitrary power over the interest of the individual. Every action of the executive Government must be informed with reason and should be free from arbitrariness. That is the very essence of the rule of law and its bare minimal requirement...
12. In this regard reference may also be made to Swadeshi Cotton Mills etc. v. Union of India etc. , wherpn the Apex Court has declared that the rules of natural justice will be applicable to the administrative decision also unless expressly or by necessary implication they are excluded. The Court further laid down that the rules of natural justice "cannot be sacrificed at the altar of administrative convenience or celebrity; for, "convenience and justice" are often not on speaking terms" General Council of Medical Education v. Spackman (1943) AC 627 at p. 638.
13. It is thus settled that principles of fair play, reasonableness and natural justice are applicable in every sphere of activities of the Government and its instrumentalities if their actions are likely to affect the people adversely unless the concerned statutory provisions either expressly or by necessary implication have excluded them.
14. In the instant case neither any provision nor any circumstance justifying exclusion of the said principles have been placed before us. It is not a case of urgency where immediate action is required to be taken. Here premises were inspected on 22.2.1996 and order/bills were sent to the petitioner on 8.3.1996 directing for payment within the time specified. This was a case where the Board before taking any adverse action against the consumer should have given him a reasonable opportunity of being heard. It is not open to the Board to enhance the pecuniary liability on the. consumer on the basis of inspection report without giving him its copy and a reasonable opportunity of being heard. Decisions in M.P. Electricity Board, Jabalpur and Ors. v. Harsh Wood Products and Anr. (1996) 2 BLJR 1987 (SC), Shri Kamala Podder v. Bihar State Electricity Board and Ors. C.W.J.C. No. 4010 of 1994, decided on 18.11.1994 and the decision of the learned Single Judge in Hari Charan Singh v. The B.S.E.B. and Ors. C.W.J.C. No. 159 of 1995 (R), on which the reliance has been placed by the learned Counsel for the Board for including the principles of 'fair play in action and natural justice' do not support his contention.
15. In M.P. Electricity Board v. Harsh Wood Products and Anr. (supra), the consumer's representative was present at the time of inspection of the premises, who had also participated in the proceedings and had signed the. same. Further after the inspection, notice was issued to the consumer by the Board informing him about the tempering or damage to the meter, In response to the said notice the consumer submitted his explanation pleading for mercy on humanitarian grounds. In this connection the relevant extract of the Apex Court's decision is reproduced below-
...In furtherance thereof, the respondent industry submitted the explanation to the cause on August 29, 1991 wherein he requested that on humanitarian grounds, viz., "the supply of installation will please be restored immediately and we give the undertaking that if any balance amount becomes due for payment on account of vigilance checking, the same will be deposited immediately on providing the bills for such amount." The reply was also given by Mr. Dilip who had participated during inspection.
In the above case the Apex Court formulated a question, as is contained in paragraph 5 of its judgment, whether "upon these facts" the High Court was justified in interfering with the order of the Electricity Board. The Apex Court, thereafter, set aside the judgment of the High Court holding that "it was not necessary to give further hearing to the respondents". It is thus apparent that in M.P. Electricity Board's case (supra), opportunity was given to the consumer at the time of inspection and even thereafter.
16. In the case of Kamala Poddar v. Bihar State Electricity Board and Ors. (supra), although the consumer therein denied the inspection, but after receipt of the notice of demand he did not make any representation or raise any dispute about it with the authorities of the Board; instead the consumer got another inspection made. That apart, the question about the applicability of principles of natural justice was neither raised in that case nor was decided by the Court. This judgment, therefore, is not an authority for holding that a minimum requirement of notice/opportunity of being heard is not required to be given to the consumer before enhancing the electricity bill on the basis of inspection report.
17. From the judgment of the learned Single Judge in Hah Charan Singh v. The B.S.E.B. and Ors. (supra), it appears that the inspection was made in presence of the petitioner therein and it was found that he was using three motors without name plate using 45 H.P. load. In the above case also the question of applicability of principles of 'fair play in action and natural justice' was neither raised before the Court nor was decided by it.
18. For the reasons given above, the first submission of the learned Counsel for the appellant cannot be sustained and is, accordingly, rejected.
19. The second submission also deserves the same fate. No person can be declared as a thief unless such a question has been determined after giving him a reasonable opportunity of being heard. But that has not been done so far in the present case. The Court can neither presume a person to be a thief nor can punish him on such a presumption. If after due notice the Board comes to the conclusion that a consumer is guilty of theft of electrical or any other malpractice it is open to it to take action against it in accordance with law.
20. The Board assessed the liability of the consumer and raised the electricity bills from February, 1996 onwards on the basis of 42 H.P. load without giving him any reasonable opportunity of being he. The learned Single Judge, therefore, was fully justified to allow the writ petition. However, that part of the judgment of the learned Single Judge whereby the Board was directed to correct, the electricity bills for February, 1996 onwards on the basis of 10 H.P. load cannot be sustained. If the Board has raised the impugned bills against the consumer without compliance of principles of natural justice the bills are liable to be set aside. But the Board is entitled to give the notice to the petitioner and pass fresh order and raise fresh bills in accordance with law.
21. This appeal is partly dismissed and partly allowed. The monthly bills for February, 1996 onwards prepared on the basis of 42 H.P. load are quashed. But that part of the judgment of the learned Single Judge whereby the direction has been issued to the Board to rectify the aforementioned bills on the basis of 10 H.P. load is set aside. The Board and its concerned officers will have liberty to make a decision and raise the electricity bills for the month of February, 1996 onwards afresh after giving a reasonable opportunity of being heard to the consumer.