Jharkhand High Court
Bihar State Power Holding Company vs The Chairman-Cum-Managing Director on 4 September, 2025
Author: Gautam Kumar Choudhary
Bench: Gautam Kumar Choudhary
2025:JHHC:26832
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W. P. (C) No. 5750 of 2001
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Bihar State Power Holding Company, having its office at Vidyut Bhawan, Jawaharlal Nehru Marg, Patna-800001 through its Chairman-cum-Managing Director ... .... Petitioner Versus
1. The Chairman-cum-Managing Director, Jharkhand Urja Vikas Nigam Ltd, having his office at Nepal House Compound, P.O.-Hinoo Town & Dist.-Ranchi
2. Jharkhand Urja Vikas Nigam Ltd, through its Secretary, having its office at Nepal House Compound, P.O.-Hinoo, Town & Dist.-Ranchi
3. Mr. Rajib Ranjan, Chairman, Jharkhand Urja Vikas Nigam Ltd. at present residing at Mecon Guest House, Ranchi
4. The Electrical Superintending Engineer Electric Supply Circle, Jamshedpur
5. The Electrical Executive Engineer, Adityapur, Jamshedpur
6. M/s Usha Martin Limited, an existing Company within the meaning of the Companies Act, 1956, having its registered Office at 2A, Shakespeare Sarani, Kolkata-700071 (also having its office at Tatisilwai-835103, Ranchi through its General Manager and/or Principal Officer Nand Kishore Patodia, R/o Deputy Para, P.S.-Lalpur, Ranchi ... .... Respondents With W. P. (C) No. 4374 of 2001
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1. Usha Martin Limited, an existing company within the meaning of the Companies Act, 1956 having its Registered Office at 2A, Shakespeare Sarani, Calcutta-700071
2. Nand Kishore Patodia, S/o Late R.D. Patodia, residing at Deputy Para, P.S.-Lalpur, Ranchi ... .... Petitioners Versus
1. Bihar State Power Holding Company Limited having its registered office at Vidhyut Bhawan, Jawaharlal Nehru Marg, Patna-800021
2. Chairman-cum-Managing Director, Bihar State Power Holding Company Limited, having its office at Vidhyut Bhawan, Jawaharlal Nehru Marg, Patna-800021
3. Jharkhand Urja Vikas Nigam Limited having its office at Nepal House Compound, P.O.-Hinoo, Town & Dist.-Ranchi
4. Secretary, Jharkhand Urja Vikas Nigam Limited having its office at Nepal House Compound, P.O.-Hinoo, Town & Dist.-Ranchi ... .... Respondents CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY
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For the BSPHC : M/s Umesh Prasad Singh, Sr. Advocate Manoj Tandon, Neha Bhardwaj& Shivani Bhardwaj, Advocates For Usha Martin Ltd. : M/s M.S. Mittal, Sr. Advocate Salona Mittal, Amrita Singh, Lavanya Gadodia Mittal Yashdeep Kanhai & Divya Choudhary, Advocates For the JUVNL : Mr. Rajiv Ranjan, Chief Law Officer, JUVNL 2025:JHHC:26832 Mr. Mrinal Kanti Roy, Sr. Standing Counsel Mr. Chandan Tiwari, Standing Counsel
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Oral Order C.A.V ON 07.08.2025 PRONOUNCED ON 04 / 09/2025 Heard the parties.
1. Usha Martin Limited was the successor of Usha Beltron Limited (petitioner in W.P. (C) No. 4374 of 2001 and respondent no. 6 in W.P. (C) No. 5750 of 2001). It operated a steel plant in Adityapur Industrial Area and was supplied electricity by the Bihar State Electricity Board (for short BSEB) and now Jharkhand State Electricity Board (JSEB) from its Gamharia sub-station through two numbers 33 KV dedicated overhead feeder lines.
2. On 04.12.1999 and 13.01.2000 a team of Bihar State Electricity Board inspected the sub-station and on its inspection report, Gamharia P.S. Case No. 02/2000 was registered under Sections 39 and 44 of the Electricity Act, 1910 against the company for theft of electricity.
3. Based on the data provided by the Company, Bihar State Electricity Board prepared and analyzed and came to conclusion that the Board had suffered losses because of unauthorized consumption of electricity and on its basis on 17.01.2000 a compensatory bill of Rs.40,39,50,747/- was raised and the electrical connection was disconnected.
4. At the heart of dispute was the compensatory bill raised by BSEB on the charge of theft of electricity leading to disconnection of electrical supply to the steel plant, which led to a spate of litigation that still festers after 25 years.
5. It will be desirable to take a brief note of the chain of events leading to the present case.
6. The petitioner moved the Patna High Court (Ranchi Bench) in CWJC No. 223 of 2000(R) against the order of disconnection which was disposed of with the following observations on 27.01.2000.
(a). Bill of Rs.40,39,50,747/- was quashed,
(b). Raising of the fresh bill without issue of show cause notice and giving an opportunity to defend was considered to be unjustified.
(c). The General Manager-cum-Chief Engineer of the Board was 2 2025:JHHC:26832 appointed as Adjudicator and Usha Beltron Limited was directed to give objection/representation based on the inspection reports contained in the FIR.
(d) the Adjudicator was directed to pass reasoned order on receipt of the representation and after giving opportunity of hearing and the Board was directed to restore power directing Usha Beltron Limited to deposit with the Board a sum of Rs. 5 Crore cash and the bank guarantee for a sum of Rs. 15 Crore from any nationalized bank.
(e) The allegations contained in the FIR/Inspection report were considered to be subjective in nature.
7. The Petitioner filed L.P.A No.25/2000(R) and vide order dated 03.02.2000 the order under appeal was modified to the extent that a sum of Rs 5.00 crore to be deposited and the electricity to be restored within 12 hours from the time of deposit and the bank guarantee of 1.5 crore was to be deposited by 11.02.2000.
8. In pursuance of the direction passed, initially the General Manager-
cum-Chief Engineer of the Bihar State Electricity Board was appointed as an Adjudicator, however, the order passed by the single judge was modified in L.P.A. No. 256 of 2000(R) on 11.04.2001, and Chairman of Jharkhand State Electricity Board was appointed with the following observation:
"If the Chairman of Jharkhand State Electricity Board feels any difficulty, in course of the proceedings, with respect to any technical aspect of the matter, it shall be open to him to take the assistance of the technical person, whom he may openly associate with himself. Such technical person, however, shall be of the rank of General Manager in the Electricity Board"
9. The Adjudicator vide his order dated 04.08.2001 recorded the following findings:
(i) Thus, in my considered opinion, the allegation of theft or pilferage of electricity and or unauthorized increase in load by Usha Beltron Limited has been wrongly made.
(ii) I thus conclude that no fresh bill under Clause 16.9 is to be raised for the reasons as mentioned above.
(iii) The amount deposited by the petitioner in cash as well as the Bank Guarantee shall be refunded to the petitioner
(iv) Board to refund Rs. 5 Crore deposited with them in cash to Usha Beltron Ltd. within 10 days from the date of this order.3
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10. W.P.(C) No.5750 of 2001 is preferred by Bihar State Holding Company Ltd. against the Adjudicator's decision, whereas WPC No. 4374 of 2001 by Usha Martin Ltd. is filed for the refund of the deposited amount.
11. Heard Mr. Umesh Prasad Singh, learned senior counsel appearing for the petitioner in W.P.(C) No. 5750 of 2001. The argument advanced by the senior counsel can be summed up as under:
I. The report of the Chairman, Jharkhand State Electricity Board, who was appointed as an Adjudicator, suffers from the lacunae as the very report on the basis of which the finding has been recorded, was at no stage furnished to the Board. A specific reference is made to the report from Mr. S.N. Dwivedi, General Manager-cum-Chief Engineer, Transmission Zone-1, Jharkhand State Electricity Board, Ranchi who was appointed by the Adjudicator to look into technical aspect and banking on the same, a finding has been recorded that there was no theft or pilferage of electricity or unauthorized increase in load by the Usha Beltron Limited. It is contended that without any opportunity to even peruse the said report or by not furnishing the copy of it, the Board was deprived of any opportunity to rebut the same. It is pointed out that as per the list of dates of the proceeding before the Adjudicator the argument was concluded on 30.06.2001 whereas, the report was submitted on 25.07.2001, as has been brought on record in the counter affidavit filed by Jharkhand State Electricity Board (now JUVNL). Reliance is placed on (2011) 5 SCC 532 (Booz-Allen & Hamilton Inc. Vs. S.B.I. Home Finance Limited & Ors.) (para 36) and (2021) 2 SCC 1 (Vidya Drolia & Ors. Vs. Durga Trading Corporation) (para 35) II. The Adjudicator recorded a finding that the petitioner was not liable and directed the Bihar State Electricity Board to refund Rs. 5 Crore which was against the order passed on 03.02.2000 in L.P.A. No. 25 of 2000(R), wherein it was held that the aforesaid bank guarantee is to be deposited within 4 2025:JHHC:26832 time fixed and the amount of Rs. 5 Crore so deposited by the petitioner to be adjusted against the future bills. The Adjudicator thus exceeded its jurisdiction by directing refund of the amount.
III. In view of the order passed by the Division Bench in the L.P.A., since the amount was to be adjusted against the future bills, therefore, it was Jharkhand State Electricity Board, which was under liability, if any, to adjust the future bills against the said amount.
IV. Quashing or acquittal in energy theft case will have no bearing so far as the unauthorized use of electrical energy is concerned, as per the settled law.
V. In terms of the Re-organization Act, 2000 and the notification, the Board could not have been saddled with any liability which was repealed and in its place State Transmission Utility came into being.
VI. Lastly, it is argued that W.P.(C) No. 4374 of 2001 was not maintainable as this Court cannot assume the role of the executing court for the order passed and affirmed in appeal.
12. It is submitted by Mr. M.S. Mittal, learned senior counsel appearing for the petitioner in W.P.(C) No. 4374 of 2001 and Respondent Company i.e. respondent no.6 in W.P.(C) No. 5750 of 2001, that decision of the Adjudicator was not solely based on the report of Mr. S.N. Dwivedi. The findings were recorded independently by the Adjudicator and not solely on the basis of the reports submitted by Mr. S.N. Dwivedi, General Manager-cum-Chief Engineer, Transmission Zone-1, Jharkhand State Electricity Board, Ranchi which will be apparent from the plain reading of the order passed. The order has been dealt with at length on evidence under the following headings:
i. Mismatch between wire, rod and billet production, ii. Production of mini blast furnace, iii. Consumption Norms in Steel making iv. Power generation in Usha Beltron's 3 MW Captive Power Plant, 5 2025:JHHC:26832 v. Unauthorized increase of demand, vi. Allegations regarding tempering of 33KV lines.
Under all these six headings, the Adjudicator has recorded his findings on the basis of the materials available on record, and is not founded on the report of the General Manager-cum-Chief Engineer. His report has only been used as a corroborative piece of evidence.
13. It is also contended that the Adjudicator was appointed with consent in the light of the order which will be evident from the order passed in the L.P.A. on 11.04.2001 and the said order is specifically mentioned that the Adjudicator was at liberty to devise his own procedure and that order was never challenged. Reliance is placed on:
a. 2024 SCC OnLine Jhar 1149 {Anvil Cables (P) Ltd. Vs. State of Jharkhand} b. SLP (Civil) Diary No. 40660/2024 {JBVNL Vs. M/s Anvil Cables (P) Ltd.} c. 2025 SCC OnLine SC 419 {Dr. Purnima Adwani Vs. Government of NCT & Anr.}.
14. The main plea of J.S.E.B. is that, it was not liable to pay the security deposit or any amount, as it was before bifurcation of the state and the amount was received by B.S.E.B. It is argued by Mr. Rajiv Ranjan, Sr. Standing Counsel, that the train of events commenced when the J.S.E.B. had not even come into existence. The raid was conducted, penalty was imposed, line was disconnected and further restored on payment of Rs.5 Crore with bank guarantee of Rs.1.5 Crore. All these events took place before bifurcation of the State of Bihar and it was B.S.E.B., who had received the amount. Any order of refund, therefore, naturally, is to be made by B.S.E.B. and not by J.S.E.B. The orders were passed by the Single Bench as well as Division Bench of this Court and in all of it, J.S.E.B. was not a party and for the first time, at this stage, the liability is sought to be saddled on J.S.E.B. in this writ proceeding.
15. It is also argued by Sr. Standing Counsel that the Adjudicator exceeded his brief and the direction of the Court passed in Single 6 2025:JHHC:26832 Bench as well as in Division Bench, in as much as it was not required to adjudicate whether theft had taken place or not. This was a subject matter which fell for consideration before the Criminal Court and not before the Writ Court. Direction of the Single Judge in W.P.(C) No. 1397 of 2000 (R) dated 14.07.2000 was specific and confined to calculation of the loss in terms of Clause 16.9 of applicable tariff in 1993 vide Notification No. COM/TAR/1010/93-430 dated 21.06.1993.
16. Reliance is placed on 2003 SCC Online Jhar 1375 to buttress the line of argument that any amount, which has been received by B.S.E.B., it will be said that Board which will be responsible to refund the amount and not the J.S.E.B.
17. Lastly, it is argued that vide Notification No.31/2008 (Part-I) dated 30.10.2012 of the Bihar State Electricity Reforms Transfer Scheme, 2012, schedule to the notification of Bihar State Power (Holding) Company Limited shall be the holding company of the Bihar State Power Generation Company Limited, Bihar State Power Transmission Company Limited. Therefore, to contend that the Board having been dissolved, was absolved of the liability, is not tenable in view of this notification.
FINDING
18. Having considered the submissions advanced on both sides and materials on record, the facts are not in dispute that on 04.12.1999 and 13.01.2000 a team of Bihar State Electricity Board inspected the sub-station and on its inspection report, Gamharia P.S. Case No. 02/2000 was registered under Sections 39 and 44 of the Electricity Act, 1910 against the company for theft of electricity.
19. Gravamen of the allegation of theft as disclosed in the FIR, is that the steel factory of the Usha Martin was situated at Gamahria, and the electricity was supplied by B.S.E.B. from the Adityapur Grid sub-station which is at a distance of about 6 Km from the factory. In order to monitor consumption of energy, meter was installed both at the Adityapur sub-station as well as at the factory at Gamharia. Complaint was received regarding pilferage of electricity which was found to be true on inspection as there was much difference 7 2025:JHHC:26832 between the meter readings at Adityapur and that installed in the factory. Thus, the difference in meter readings constituted the foundation of allegation of theft of electricity.
20. Theft of electricity entails civil and criminal consequences and liabilities. Both operate in different jurisdiction and, findings in each are independent and do not impinge on the other.
21. Here the issue at hand is two folds. First, is of liability to pay compensation arising out of the alleged unauthorized use of electricity by Usha Beltron. Second, if at all the amount was to be refunded, whether J.S.E.B. or the B.S.E.B. would be liable to refund the same.
22. The provision for imposition of compensation on a consumer found exceeding the contracted load without specific permission of the Board, is contained in Tariff Notification of June 23, 1993 of the Bihar state Electricity Board, which reads as under:
"Clause 16.9(A)- Detection of Unauthorized 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 case of use of energy through artificial means or by adopting any appliance.
b. In case of the using energy by creating obstruction in running of meters or interfering with the system of supply or wires etc. c. In case of dishonest abstraction of electrical energy or running of energy, when supply is disconnected."
23. From the above notification, it is manifest that the determination of fact that theft did take place or not, was fundamental for assessment of compensation, as table of calculation hinged on theft of electricity. Therefore, the contention raised on behalf of B.S.E.B. and J.S.E.B., that it was not within the province of the Adjudicator to enter into the question of theft is difficult to countenance. This is 8 2025:JHHC:26832 a case where the imputation of electrical theft is not based on the allegation of theft of energy by artificial means or by any appliance. As discussed above allegation hinges on difference in meter readings between two electrical sub-stations. FIR has noted that meter was intact and no external appliance or contrivance were used for committing theft. The plea of the consumer that there are normal transmission losses of energy as the two substations were at a distance of 6 km, needed adjudication. Therefore, the Adjudicator was required to assess if the difference in meter reading reflecting energy loss was within the acceptable limit, or it came within the meaning of unauthorized use of electricity, making the consumer liable to pay compensation.
24. It is for this reason that in LPA No. 25 of 2000 (para-4) has clearly held that when an FIR has been filed with the allegation of theft or pilferage of electricity, the matter would be decided at appropriate state by appropriate forum or by the authority before whom representations are required to be filed by the appellants in view of the direction of the learned Single Judge. The issue of raising of compensatory bill would arise only if the adjudicator had come to a conclusion that there was pilferage of energy by the consumer and if there was no pilferage of energy, then in that event there was no question of raising any compensatory bill.
25. Direction to deposit Rs 5 Crore for restoration of electrical connection, cannot lead perforce to conclusion that the charge of theft was affirmed by writ court, even before adjudication in a civil or criminal proceeding. What was held in CWJC No.1397/2000(R), was that the parties would be entitled to produce before the respondent no.2 all the relevant documents and make submissions on the question of calculation of the amount which should be charged from the petitioners. If the charge of theft had been accepted, there was no occasion for submission of representation and relevant documents by the respective parties.
26. Thus, the argument that adjudicator had no authority to decide whether theft of electricity did take place or not, is devoid of merit and cannot be accepted and is accordingly rejected.
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27. Now the second issue raised at Bar, both on behalf of B.S.E.B. & J.S.E.B. is that the report of Mr. Dwivedi, General Manager was never made available to the Petitioner and the existence of such report only came to the knowledge after receipt of the Impugned Order. Thus, the principal of natural justice was violated.
28. At the outset it may be noted that from the order dated 11.04.2001, passed in LPA 256 of 2000 it is apparent that Chairman J.S.E.B. was appointed to complete the adjudication proceeding and pass a reasoned order. It was also laid down that the Chairman shall devise his own procedure, which will be in accordance with the principles of natural justice. He was also authorized to take assistance of a technical person of the rank of General Manager in Electricity Board. In W.P.(C) No. 2434/2021 (Annexure-25, Page-404 of W.P.(C) No. 5750/2001) ordered that the Arbitrator would proceed in terms of the Order passed in LPA No. 256 of 2000 (R).
29. Hearing of the proceeding, as per the impugned order, was held on 13.05.2001, 15.06.2001 and concluded on 30.06.2001 with consent of both sides and in which both sides participated.
30. On perusal of the report of the Adjudicator, it will transpire that it runs into 25 pages wherein, the adjudicator submitted his analysis and evaluation on the allegation against the consumer company under the following heads:
I. Mis-match between wire rod and billet production. II. Production of mini-blast furnace.
III. Consumption norms in steel making.
IV. Power generation in Usha Beltron Captive Power Plant.
V. Unauthorised increase of demand.
VI. Allegations regarding tempering of 33 KV lines.
31. In each of these heads the Adjudicator has recorded his own finding as under discussed from page-11 to 21 after receiving the allegation and representation of both sides. The following are the independent conclusions on each of the above heads:
I. No billet was produced by Usha Beltron using stolen power. II. B.S.E.B. is not competent to make such conclusion on blast furnace productivity and production and their allegation is 10 2025:JHHC:26832 without any documentary evidence.
III. The claim of B.S.E.B. that for making steel from 100% hot metal 275 KWh per MT power is required and for making steel from 100 % cold scrap 839 KWh per MT was required, was not supported by documentary evidence. Hence allegation made by the Board is not technically substantiated. IV. Power generation data submitted by the Company to the statutory authority was correct and there was no valid reason to disbelieve or ignore it for the period of allegation. V. The allegation has been made by the Board without having adequate knowledge on technical aspects of such steel plants. VI. With regard to the tempering of 33 KV line by the Company, the Adjudicator has referred to the findings of Mr. S.N. Dwivedi, the then General Manage Cum -Chief Engineer, Transmission Zone-I JSEB, and concluded as follows:
"Therefore, it is concluded that in view of the expert opinion of the General Manager,-cum-Chief Engineer, Jharkhand state Electricity Board, Transmission zone -I, Ranchi and evidence provided by Usha Beltron, allegation of Bihar state Electricity Board on alleged tempering of 33 KV lines in substation of Usha Beltron and alleged theft or pilferage of electricity is found to be incorrect. No prima facie Case of theft or pilferage of electricity as alleged by the Board against Usha Beltron is made."
32. From the above it will be evident that findings of Adjudicator were his own and only in internal Page-21 findings of Mr. S.N. Dwivedi is referred to the issue of transmission loss (VI) where the Adjudicator consulted Mr. S.N. Dwivedi.
33. Therefore, to contend that the adjudication was totally based on the report of the Mr. Dwivedi is factually incorrect. In determination of transmission loss, consultation of expert opinion of the General Manager-cum-Chief Engineer, Jharkhand state Electricity Board, Transmission Zone -I, was with consent of all parties as noted in the decision of the adjudicator at para 3(e) of the adjudication order.
34. Can this Court while exercising writ jurisdiction under Article 226 of the Constitution of India, nix the adjudicator's finding and 11 2025:JHHC:26832 decision on this score itself is the question?
35. Before answering this question, it shall be desirable to revisit the broad parameters in which the writ courts exercise jurisdiction.
High Court does not does not act as a court of appeal or revision to review or reappreciate the evidence on the basis of which the findings of the order challenge is based. Error contemplated to be sufficient for interference should be something, where there was flagrant disregard of the rules of procedure or where no particular procedure was prescribed, which may violate the principles of natural justice. An error in the decision or determination itself may also be amenable to a writ of certiorari, but it must be a manifest error apparent on the face of the proceedings e.g. when it is based on clear ignorance or disregard of the provisions of law. In other words, it is a patent error which can be corrected by certiorari but not a mere wrong decision. (See T.C. Basappa v. T. Nagappa, (1954) 1 SCC 905).
Locus classicus on the point is Sangram Singh v. Election Tribunal, 1955 SCC OnLine SC 21 : AIR 1955 SC 425 "14. That, however, is not to say that the jurisdiction will be exercised whenever there is an error of law. The High Courts do not, and should not, act as courts of appeal under Article 226. Their powers are purely discretionary and though no limits can be placed upon that discretion it must be exercised along recognised lines and not arbitrarily; and one of the limitations imposed by the Courts on themselves is that they will not exercise jurisdiction in this class of case unless substantial injustice has ensued, or is likely to ensue. They will not allow themselves to be turned into courts of appeal or revision to set right mere errors of law which do not occasion injustice in a broad and general sense, for, though no legislature can impose limitations on these constitutional powers it is a sound exercise of discretion to bear in mind the policy of the legislature to have disputes about these special rights decided as speedily as may be." (emphasis supplied)
36. It is true that hearing before the Adjudicator had concluded on 30.06.2001, whereas the report was submitted by Mr. S.N. Dwivedi General Manager-cum-Chief engineer, Jharkhand state Electricity Board, Transmission Zone-I on 25.07.2001. But this by itself cannot be a sufficient reason to set aside the impugned order for the reason that finding in adjudication was not totally based on it, and Mr. S.N. Dwivedi had been consulted on only one point raised by 12 2025:JHHC:26832 B.S.E.B. during the course of hearing.
37. From the FIR, it will be evident that there was no allegation regarding tempering of 33 KV lines as it was confined to the allegation of difference of meter reading in the electrical sub-station of B.S.E.B. at Adityapur and that Steel Plant located at Gamharia. This issue of tempering of lines came up later during hearing before the Adjudicator, and for its verification General Manager-cum- Chief engineer, Jharkhand state Electricity Board, Transmission zone -I was involved.
38. As the Adjudicator was empowered to determine his own procedure, he received representations and conducted hearings, affording both parties an opportunity to present their case. Hence, the contention that his decision stands vitiated for non-compliance with the principles of natural justice, merely because Mr. Dwivedi's report was not shared with the parties, is too hyper-technical to merit an acceptance. Such a ground, by itself, is insufficient to set aside an otherwise well-reasoned order of the Adjudicator and it will not serve the cause of substantial justice.
39. B.S.E.B. having moved the writ court against the decision of the Adjudicator and not under Section 34 of the Arbitration and Conciliation Act,1996, cannot in the same breath, claim that it was in the nature of an arbitral award. Booz-Allen & Hamilton Inc (supra) & Vijay Drolia & Ors. relied upon by the B.S.E.B. will have no application in the present case, as it related to appeal from an arbitral award.
40. It has also been argued on behalf of B.S.E.B. that in view of the Order passed in LPA No. 25 of 2000, the amount of Rs. 5 Crores was to be adjusted against the future bills, but the Adjudicator has passed an Order of refund which is contrary to the Order of the Division Bench of the High Court. This is not in consonance of the order of the High Court. As per the order if the Bank Guarantee was not deposited, then in that event the amount of Rs. 5 Crores was to be adjusted against the future bills.
41. The next point raised by the B.S.E.B. is that after 1st April 2001, B.S.E.B. cannot be made liable for any amount to be paid to the 13 2025:JHHC:26832 Company. It is argued that BSEB is different from power holding company and B.S.E.B. does not exist anymore and also reference was placed to certain Sections of the Electricity Act, 2003.The instance is of January 2000 and the Electricity Act 2003 came into effect on 10th June 2003 and it is not understood as to why the provisions of the said Act are sought to be applied for incidents and events that took place prior to it.
42. This is essentially not a dispute of assets between the two States, but it is about a liability to a private legal person, a Company in the present case, which had paid the amount and is just claiming the refund, as the adjudicator has absolved it of any liability and has directed the refund of the amount.
43. The rightful claim of the consumer for a refund cannot remain unresolved, particularly when more than two decades have passed since the payment was made and it has been adjudicated as wrongfully collected. The contention that the B.S.E.B. no longer exists and that the current power holding company has no connection with it is wholly untenable.
44. Indisputably the payment of Rs. 5 Crore was made to B.S.E.B. on 03.02.2000 and it was B.S.E.B. that had full custody and control over the deposited amount. Since the deposit was received before the bifurcation of the State, therefore the liability to return the deposited amount should logically be on B.S.E.B. It has been held in Bihar State Electricity Board v. Union of India, 2003 SCC OnLine Jhar 1375, that liability for payment of salary as well as right to collect revenues/dues and to meet all obligations prior to 1.4.2001, will be that of the Bihar State Electricity Board.
45. State or its instrumentalities cannot act unfairly with its citizens. It has been held in Food Corporation of India v. Kamdhenu Cattle Feed Industries, (1993) 1 SCC 71 :
7. In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet.
There is no unfettered discretion in public law : A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is 'fairplay in action'. Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in 14 2025:JHHC:26832 every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness.
46. Under the aforesaid facts and circumstance and for the reasons as discussed above, this Court is of the view that there is no infirmity in the findings of absolving the Appellant Company from paying compensatory costs imposed on it, and in the order of the Adjudicator for refund. The order of refund of Rs 5 Crore by the Adjudicator is upheld.
Under the circumstance, the successor of B.S.E.B. i.e. Respondent nos. 1 and 2 in W.P.(C) No. 4374 of 2001 are directed to refund the said amount to petitioner-Usha Martin Ltd. in W.P.(C) No. 4374 of 2001 with interest at the rate of 7.5% per annum within a month of this order.
W.P.(C) No. 5750 of 2001, accordingly, stands dismissed and W.P.(C) No. 4374 of 2001 is, accordingly, allowed.
Pending I.A., if any, stands disposed of.
(Gautam Kumar Choudhary, J.) Jharkhand High Court, Ranchi Dated the 04th September, 2025 AFR/ AKT/Satendra 15