Madhya Pradesh High Court
Harsh Wood Products Pvt. Ltd. vs State Of Madhya Pradesh And Ors. on 12 March, 1993
Equivalent citations: 1993(0)MPLJ901
ORDER T.N. Singh, J.
1. This matter was listed before us for the first time on 8-2-1993 when complaint was made to us that respondent Madhya Pradesh Electricity Board, for short, the 'Board' was designedly delaying the proceedings by not filing return to the serious detriment of the petitioner, despite order passed on 30-12-1992 for the matter to be heard and finally decided in the third week of January, 1993, allowing two weeks' time to the respondents to file return. The return came on record on 25-2-1993 and hearing was taken up on the same date, but concluded on 27-2-1993.
2. The petitioner Company, for short, the 'Company', which is registered as a Small Scale Industrial Unit is running a factory at Banmore, District Morena, where manufacturing of Kattha-cutck is undertaken. The raw material used is Khair wood which is supplied by the Forest Department of the State Government under agreement dated 19-12-1981. The Board provided to the Company's factory L. T. power connection since 26-2-1982; Service Connection No. 2824/1158, being in respect of a 80 H.P. motor and the other connection No. 2556/1156 being for 90 H.P. motor. In para 6 of the petition is given particulars of the bills raised for the electricity consumed under those connections from April, 1990 to March, 1991. It is stated that on 16-3-1991, the "Vigilance Inspection" was made of the Company's factory and reports thereof, Annexures P/V and P/VI are filed. Both meters of the two connections were found intact and in para 9 is given the details of bills drawn for the consumption made between April, 1991 and July, 1991. On 22-8-1991, there was a surprise check again at the Company's factory when a Panchnama, Annexure P/IX, was prepared showing that although on the meter boxes of the two meters, the outer seals were intact, the inner seals in the meters were tampered with. Late in the night on the same date, some officers of the Board swooped on the Company's factory along with Police Guards and disconnected the supply made through the service connections aforesaid rendering idle about 200 employees in service of the Company, engaged in the factory.
3. On 28-8-1991, the petition filed by the Company on 26-8-1991 was listed before the Court when prayer for ad interim writ was rejected, but for final hearing, the case was directed to be listed on 16-9-1991 and in the meantime, within two weeks, return had to be filed. Because of default of the Board, another application was moved for interim writ and that was heard on 9-9-1991. On the condition of making payment by the Company of Rs. 50,000/- in two equal instalments on ad hoc basis, Board was directed to restore the connection. It was also directed that the Board shall make an assessment of the dues payable by the Company in accordance with law and in the assessment proceedings, Company's cooperation shall be secured and further, the Board was allowed to take all permissible and feasible measures to protect against suspected theft of electricity in future while restoring the electric connection. It appears that subsequently on 6-8-1992, another order, another Division Bench of this Court had to pass directing the Board to comply with the order dated 9-9-1991. On 29-12-1992, another application for interim writ (I.A. No. VI of 1992) was filed with respect to which the learned Vacation Judge passed an order on 30-12-1992 that on the Company depositing Rs. 33,397/- to fulfil the demand raised by the Board as per Annexure P/39, the service connection No. 2556/1156 (90 H.P.), disconnected on 22-12-1992, shall be restored and, as earlier stated, the Board was asked to file return within two weeks and matter was directed to be listed in the third week of January, 1993 for final hearing.
4. Admittedly, the Company did not deposit the amount aforesaid and the Factory is closed for the last about 2 1/2 months. The stand taken by the Company is that already overpayment was made under this Court's earlier direction and regular payments of bills drawn by the Board were being made by the Company of which particulars were furnished in the application filed on 15-7-1992. In para 5 of the said I.A. No. VI/92, particulars are given of demands raised and payments made with respect to electricity supplied for the service connection 2556/1156 between August, 1992 and November, 1992. At para 6 ibid, it is further stated that although as per the said bill (Annexure P/39), in the month of November, 1992, 501 units were only consumed as the factory was not running in full force because of non-availability of raw materials, minimum charges payable for the month were shown as Rs. 6,940.00 along with imaginary arrears of Rs. 26,495.00, though no such arrear was at all payable. The Company accordingly sent a bank draft dated 23-11-1992 for Rs. 6,940/- vide copy Annexure P/40 which was not accepted and returned back on 8-12-1992 vide Annexure P/41 on the ground that full payment had to be made including the arrears.
5. No reply the Board filed to the said I. A. VI/92, but return came later, on 25-2-1993, as stated above. Board has taken the stand that the Company was stealing energy for the last many months from 1987 to September, 1991 and the malpractices of the Company were detected in the course of inspection made on 22-8-1991. Surprisingly, the Board has also taken the stand that one of its own officials is a privy to the clandestine activity and at his instance, the Vigilance Report, aforesaid, dated 16-3-1991 was doctored. It is not disputed in the return that two "assessment bills" were prepared and sent to the Company by the Board with a letter, Annexure P/11, dated 26-8-1991, wherein it was stated that an F.I.R. was lodged at Banmore Police Station on 22-8-1991 with respect to theft of electricity by the Company and the assessment made in the bills for three years represented "the difference consumption of energy" while giving credit for the payments made. Obviously, no action was taken by the Company on those bills as they were served on the Company on 28-8-1991, after the matter became sub judice since 26-8-1991. However, by telegram, Annexure P/XV, dated 3-9-1991, the demand was disputed and Board was asked to withdraw the notices and restore the connection. Supporting the stand taken in the return, Board's counsel Shri K.N. Gupta, has relied on Clause 31 (e) of General Conditions for Supply of Electrical Energy and Scale of Miscellaneous and General Charges, printed in a booklet so captioned, published on 1-10-1974 by the Board and has submitted that until those two bills, for Rs. 7,24,137.83 (for Service Connection No. 2556/1156) and Rs. 6,51,256.61 (for Service Connection No. 2824/1158), are paid, supply of elctricity cannot be restored to the Company and indeed an arrears of Rs. 26,495/- shown in Annexure P/39 is also to be paid for restoration of electric connection.
6. The main question that falls for our decision in this case is -- whether, at any time, the Board legally, lawfully and competently disconnected the supply of power to the Company's factory in respect of Service Connections aforecited. However, it must be pointed out that the dispute now is limited to Service Connection No. 2556/1156 (90 H.P.) inasmuch as the other Service Connection No. 2824/1158 (80H.P.) was disconnected on 22-11-1992 at the request of the Company inasumuch as due to shortage of raw materials, one metar (80 H.P.), was not being operated. The subsidiary question indeed is also, if the two "assessment bills" aforesaid (as per Annexure P/11) are valid and enforceable and indeed if there is any legal basis for the arrears shown in the bill, Annexure P/39. If the two questions are decided against the Board, it would be our Constitutional obligation to issue mandamus to the Board to restore immediately without ado, supply of electrical energy to the Company's factory to Service Connection No. 2556/1156, granting the Company the relief prayed in that regard. It is true that by several interim orders, passed in this matter by this Court from time to time, the basis of the two "assessment bills" above-referred has been essentially eroded when discarding the same, restoration of supply of electricity to the factory of the Company was ordered from time to time. However, legality of those two bills not being decided in those orders, it becomes our duty to do so now in finally disposing of this petition.
7. Petitioner's counsel, Shri Chitaley, has submitted that all along, at all stages, the Board had been acting illegally and unconstitutionally and Clause 31 (e) cannot be pressed as the valid authority by the Board to support their stand. His first contention is that nothing can override the provisions contemplated under Section 24(1), Indian Electricity Act, 1910, for short, the 1910 Act, contemplating "not less than seven clear days' notice in writing" to be given to the consumer when it is proposed to "cut or disconnect any electric supply line" of any consumer due to his neglect to pay any charge for energy supplied to him. He submitted also that if there was any "dispute" with respect to the Company's liability for payment of charges for the supply of energy, the Board was bound to refer the same, as per Sub-section (2), to Electrical Inspector and the power conferred under Sub-section (1) cannot be exercised until the Inspector has given his decision. He has also assailed the Board's stand that Clause 31 (e) contemplates power validly exercisable in such a case and submitted further that the power contemplated there under cannot be exercised arbitrarily as that would be violative of the Constitutional mandate of Article 14. He has cited several decisions in that regard to which we shall refer in due course. Counsel has also relied on Clauses 19(c)(i), 27(c) and 31 (d) of the said Conditions of supply. It is also his contention that the said "Conditions of Supply" have no statutory force and those, as contended by Board's counsel, Shri K.N. Gupta, are not to be regarded as "Regulations" framed under Section 79(j) of the Electricity (Supply) Act, 1948, for short, 1948 Act. It is also his contention that in any case, even if those are regarded as such "Regulations", they cannot prevail against Section 24 of 1910 Act which carries in it the Constitutional mandate of Article 21. Clause 31 (e) being a form of subordinate legislation is implicitly subjected also to legislative mandate of Section 24(1).
8. Whatever worth they are, if the said "Conditions" contain any provisions which impair or taint the Board's stand, they cannot be ignored because on same provisions, Shri Chitaley has relied. Clause 19(c)(i) contemplates, "Payment for electricity supplied shall be made by consumers according to readings of meters or apparatus" and as per Sub-clause (iii), if the meter "ceases to function or becomes incorrect, the electricity supplied to the consumer during the period in which the said meter ceased to function or became defective shall be determined by taking average of the electricity supplied during the preceding three months in which the said meter had not ceased to function or was not defective". Clause 27(c) provides that if the consumer fails to pay the bill sent to him within the period allowed for payment, the Board shall give to such consumer seven clear days' notice of intention to discontinue the supply of electrical energy and on the expiry of such period if frill payment has not been Made, the Board shall discontinue the supply .....". We extract now Sub-clauses (d) and (e) of Clause 31 :-
"(d) If energy supplied for a specific purpose under a particular tariff is used without the board's knowledge and/or consent for a different purpose not contemplated in the contract for supply and for which higher tariff is applicable than the electricity consumption bills already rendered for the service shall be revised charging the appropriate higher tariff for the previous six months from the date of detection of misuse unless in the opinion of the Engineer there are convincing reasons for adopting a different period. The imposition of this higher rate will not relieve the consumer from any proceedings and penalties which may be imposed under law.
(e) Where any consumer is detected in the commission of any malpractice with reference to his use of electrical energy including unauthorised alterations to installations, unauthorised extension and use of devices to commit theft of electrical energy the Board may, without prejudice to its other rights, cause the consumer's supply to be for with disconnected. The supply may be restored in the discretion of the Divisional Engineer of the Board if the consumer forthwith compensates the Board and pays all dues as per bill and takes such other actions as he may be directed by the Divisional Engineer of the Board to take in this connection".
9. In the instant case, admittedly, as per the "assessment bills", retrospectively liability is saddled for three years on pure surmises and conjectures and without any valid basis ignoring obviously provisions of Clause 19(c)(iii) and also of Clause 31(d). What is, however, undisputed is that no previous notice in any form of any sort, as statutorily contemplated under Section 24 or even under Clause 27(b), aforesaid, was served on the company and in an almost arbitrary manner, the supply of electricity to Company's factory was disconnected. A bare perusal of the aforesaid two "assessment bills" is sufficient to convince a layman even of total lack of any reasonable basis for the same, much less, the same conforming in any manner to the legal basis herein pointed out. In one case, consumption is presumed at 29,004 units per month (for 90 H.P. meter) and in the other case, at 25,782 units per month (for 80 H.P. meter), in both cases, reckoned for the period August, 1988 to July, 1991. That socalled "best judgment assessment" is supported in the return on the ground that consumption was not reckoned for running of the electric meters for 24 hours, but only for 15 hours a day while admitting still that for 365 days of the year, consumption was calculated. The illogical and wholly arbitrary basis of assessment is so apparent that one living in a fools' paradise may only be convinced of its validity.
10. Apart from the fact that retrospective assessment can date back only to six months, if the guideline of Clause 31 (d) is to be followed, what is obvious is that the Labour Law Regulations contemplating fixed working hours and holidays (Sunday in any case) are totally ignored even if one overlooks the apparent fallacy of the factory being allowed to run to full capacity despite the industry being a regulated industry in respect of supply of raw materials coming from the State Government. In any case, even if Clause 31 (e) is put forth as justification for the action of disconnection, the said two "assessment bills" can hardly provide basis for the action taken. Such a bill as contemplated in Clause 31 (e) is to conform to the guidelines contemplated under Sub-clause (d) and also of 19(c), Sub-clauses (i) and (iii). Reliance, indeed, we consider appropriate of Shri Chitaley on this Court's decision in Gajendra Singh v. M.P.E.B., 1992 (II) MPWN 171, wherein the vies taken was that "a vague bill giving no basis for the demand is not a bill of which liability can be saddled on the consumer". Obviously, therefore, there was no scope even for power under Clause 31(e) to be invoked for the action taken.
11. It is true, as Shri Gupta has contended, Clause 31 (e) does not provide expressly for any prior notice or hearing to the consumer for the proposed action, but in our view, principles of natural justice spring into action in such a case and the Rule audi alterant pattern is to be read into Clause (e), for the additional reason that under our Constitutional dispensation use of both executive or statutory power is tampered by requirements of Article 21 in a case of any person being deprived of essential services like water, electricity, telephone etc. Right to livelihood whether of a single person or of a group of persons and effect denial thereof on the society at large, in such cases, is likely to be involved and Olga Tellis, AIR 1986 SC 180, has now settled the law that such a right is embraced by Article 21 of the Constitution. Earlier also, in Board of Trustees v. Dilip Kumar, AIR 1983 SC 109, the Apex Court took the view that Article 21 has created a protective shield against denial to any person of finer graces of human civilisation. Support for this view, we find in a recent decision of the Apex Court in Municipal Corporation of Delhi v. M/s. Ajanta Iron and Steel Company (Pvt.) Ltd., AIR 1990 SC 882, which, on facts, is similar to the instant case in that allegation of theft of electricity was made even in that case. Their Lordships held that prior notice of disconnection in such a case is a mandatory requirement because the allegation of theft had to be dealt with separately and unless and until the allegation has been proved, the consumer is not supposed to suffer advance penalty for a Criminal activity. In Kuldeep Singh Dhingra v. Municipal Corporation of Delhi, AIR 1992 Delhi 228, their Lordships' decision is invoked in a similar case to hold that pre-decisional hearing in such a case was mandatory. In Southern Steelmet and Alloys Ltd. v. Karnataka Electricity Board, AIR 1991 Karnataka 267, also, a case of theft of electricity, the requirement of following principles of natural justice is stressed and the relevant Regulation enacted in that case under Section 79 of 1948 Act was so construed though the provision was barren.
12. We agree with Shri Gupta that the ratios of the two decisions, in M.P.E.B. v. Basantibai, AIR 1988 SC 71, or in Regal Theatre v. M.P.E.B., AIR 1987 MP 276, are not applicable to the instant case. As held by the Apex Court, Section 26(6) does not deal with the case of any dispute' 'regarding the commission of fraud in tampering with the meter and breaking the body seal is outside the ambit of Section 26(6)" and the dispute need not be referred to the Electrical Inspector. Even so, we have found no justification of the respondent, as held above, for their action impugned herein, invoking Clause 31 (e) itself. Reliance Shri Gupta placed on a D.B. decision of Allahabad High Court in Aditya Rotor Spin (P.) Ltd. v. U. P. State Electricity Board, AIR 1991 Allahabad 196, to submit that Regulation 22 interpreted therein upholding the Constitutional vires thereof, is similar to Clause 31 (e) and, therefore, the Company in the instant case cannot impugn Board's action of disconnection of supply of energy to it without notice or hearing. To that contention, as is rightly submitted by Shri Chitaley, there are three answers. One, the question only of vires of a Regulation was considered and not of its scope in that case; two, that was a case of a "Regulation" enacted under Section 79 of 1948 Act while in this case it has not been established that Clause 31 (e) is so enacted; three, the decision does not take note of Apex Court's view expressed in Ajanta Iron and Steel Co.'s case (supra). Shri Chitaley further submitted, relying on Indian Aluminium Co.'s case, AIR 1975 SC 1967, that Section 79(j) of 1948 Act does not admit within its ambit power to evolve such "principles" as may impair consumer's statutory right secured otherwise. He submitted, therefore, that Clause 31(e) cannot stand alone as a valid provision even if that is accepted as a "Regulation" and only by harmonising that with Sub-clause (d) and reading that along with Clauses 27(c) and 19(c) and interpolating therein the requirement of natural justice, that can be saved. We have no hesitation to accept that contention.
13. Having found both "assessment bills" aforesaid to be illegal and unconstitutional, it is necessary now to see if there is any justification for the status quo to, be allowed to continue maintaining action of the Board of discontinuing supply of electricity to the Company's factory on the ground that the demand raised there under or the arrears claimed in the bill for November, 1992 (Annexure P/39) is not paid. We have already noticed that in the return, the averments made in regard to that claim in I.A. No. VI/92 by the Company are not contested. It appears, as stated in para 6 of the said application, the Board perhaps wanted to penalise once again the Company on the assumption of its stealing electricity because in November, 1992, only 501 units were shown consumed. No reasons are given in Annexure P/41 (Board's letter to the Company) for claiming the arrears and to substantiate validity of that claim. On the other hand, details are given in para 5 of the application of the payments made for the preceding months of August, 1992 to October, 1992 in the sum of Rs. 6,552.00, Rs. 4,536.00 and Rs. 4,508.00 respectively, the Board arbitrarily refused to accept payment made of Rs. 6,940/- by Bank draft, Annexure P/40 and on that pretext, it acted arbitrarily in discontinuing the supply of electricty to Company's factory especially when the Company had already made payment of Rs. 50,000/-on ad hoc basis, under this Court's order, and the question of validity of the so-called' 'best judgment assessment bills" was pending disposal in this matter.
14. In this context, at the risk of repetition, we may state that we have sustained validity of the apparently unconstitutional Clause 31(e) by reading down the provision and interpolating therein the requirement of natural justice and subjecting the same additionally to the guidelines contemplated under the preceding Clause (d). Section 39 of 1910 Act makes "theft" of electricity an offence to be tried judicially and punished in terms thereof as mandated by Articles 20(1) and 21 of the constitution and any penal action taken before the trial may be liable to be challenged under Article 14 of the Constitution. Before the allegation of theft is judicially examined and offence is found established, if any action in terms of Clause 31(3) is taken, that will fall foul of the Constitutional mandate as the arbitrary action of disconnection may render unemployed workers in the factory (sometime in hundreds, as in this case) infringing thereby their Constitutionally protected right of livelihood.)
15. For all the aforesaid reasons, we have no hesitation to quash the two "assessment bills" for Rs.7,24,137.83 and Rs.6,61,256.61, raised in respect to Service Connection Nos. 2556/1156 and 2824/1158 respectively and to quash also the imaginary and unsubstantiated arrears of Rs. 26,459/-claimed in the Bill, Annexure P/39. We hold the action of the Board discontinuing supply of electricity to the factory of the Company in respect of the existing Service Connection No. 2556/1156, to be illegal and unconstitutional. Accordingly, we direct the respondent Board to restore within 24 hours the Service Connection No. 2556/1156 of the Company to enable it to resume production in the factory. However, we make it clear that with respect to the claim of the Board against electricity stolen by the company, it shall be open to the Board to raise legal and appropriate demand in a legal and lawful manner, but, as observed by the Apex Court in Ajanta Iron and Steel Co.'s case (supra), it shall be possible for them to do so only when theft is judicially established on the same being held proved in the criminal proceeding which the Board instituted against the Company. Indeed, it shall, however, be open to the board to act in the meantime, within two weeks, in accordance with Clause 31 (d) if so advised, subject to the right of the petitioner Company to challenge the same. Accordingly, till then, the Company shall not claim refund of Rs. 50,000/- deposited under this Court's order, but the admitted liability with respect to Rs. 6,940/- shall be adjusted immediately by the Board against the said deposit and for all future dues also for the energy supplied on restoration of the Service Connection, the Company shall be liable for regular payment on submission by respondent Board of bills drawn in accordance with law.
16. In the result, the petition succeeds and is allowed in terms of the above directions. We leave the parties to bear their own costs.