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The Bihar State Electricity Board & Ors. v. The State Of Bihar & Ors.
Factual and Procedural Background
This writ application challenged an order dated 6 February 1991 passed by the Electrical Inspector, Bihar (Annexure 1), which directed that the petitioners' contract maximum demand for supply to respondent no. 3 be reduced from 183 KVA to 150 KVA and that bills be raised accordingly.
Key factual points stated in the opinion:
- Petitioner No. 1 is a statutory body constituted under section 5 of the Electricity (Supply) Act, 1948 and is a body corporate under Section 12. Respondent No. 3 is a statutory corporation under the Bihar Fruits and Vegetables Development Corporation Act.
- On or about 25 February 1985 respondent no. 3 entered into an agreement with petitioner no. 1 for supply of high tension electrical energy at a contract demand of 183 KVA (Annexure A).
- Petitioner no. 3 inspected respondent no. 3's premises and reported installed capacity as 194 KVA (Annexure 2). Respondent no. 3 had previously requested reduction of contract demand by a letter dated 11 September 1986.
- Petitioners maintained that the request for reduction was rejected by petitioner no. 2 because the agreement contained a three-year minimum period (clause 9a) during which the consumer could not determine the agreement or seek a reduction.
- The parties' record of highest monthly KVA for respondent no. 3 in successive years was provided in the writ petition (1985–1991): 139, 173, 116, 116, 77, 179 KVA respectively.
- Respondent no. 3 referred the dispute concerning reduction of connected load and related billing/meter issues to respondent no. 2 (Electrical Inspector). The impugned order by respondent no. 2 directed the petitioners to raise bills on the basis of 150 KVA.
- Respondent no. 3 disputed the correctness of petitioner no. 3's report and claimed its maximum demand never exceeded 75 KVA. It submitted consumption charts and representations in 1989; procedural correspondence and internal directions between officials are described in the record (including communications of 20 Feb 1989, 6 Apr 1989, 1 May 1989, 24 Apr 1989, 6 Jun 1989, 1 Jul 1989, 20 Jul 1989, 31 Jul 1989).
Legal Issues Presented
- Whether respondent no. 2 (the Electrical Inspector) had jurisdiction to direct reduction of the contract demand (from 183 KVA to 150 KVA) and to determine disputes between the Board (petitioners) and respondent no. 3 in this matter.
Arguments of the Parties
Petitioners' Arguments (as presented in court)
- The jurisdiction of the Electrical Inspector is confined to the provisions of Section 21(4) and Section 26(6) of the Indian Electricity Act (as argued by petitioners' counsel).
- The question of reduction of contract load is a matter of contract between the Board and its consumer; therefore the Electrical Inspector had no jurisdiction to pass the impugned order.
- The petitioners relied upon an order dated 18.9.1991 in CWJC No. 4910 of 1991 (Bihar State Electricity Board v. The State of Bihar) in support of their position (as argued before the Court).
Respondents' Arguments (as presented in court)
- Counsel for respondent no. 2 and counsel for respondent nos. 3 and 4 argued that the Electrical Inspector's jurisdiction is not limited to the provisions relied upon by petitioners, and can also be exercised under various provisions of the Indian Electricity Act, 1910 (listed in the affidavit) including Sections 24(2), 26(4), 33(2), 37(2)(ii)(g), 37(2)(ii)(k), 50 and 55 and certain clauses of the Schedule to that Act, and Rules 4 to 10 of the Indian Electricity Rules (as contended in court).
- It was further submitted that because both parties had agreed to abide by the decision of respondent no. 2, the petitioners were estopped and precluded from challenging his jurisdiction.
- One respondent's counsel also asked that if the Electrical Inspector were found to lack jurisdiction, the respondents should be given liberty to raise the matters before appropriate forums where those questions are referable.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Order dated 18.9.1991 in CWJC No. 4910 of 1991 (Bihar State Electricity Board v. The State of Bihar) | Relied upon by petitioners' counsel to support the contention that the Electrical Inspector lacked jurisdiction to decide the reduction of contract demand. | The opinion records that petitioners' counsel relied on this order. The court's reasoning and final decision are based on statutory interpretation of the Indian Electricity Act and the Electricity (Supply) Act, 1948 rather than an express reliance on this order in its ratio decidendi. |
Court's Reasoning and Analysis
The court's analysis proceeded by detailed statutory interpretation and application of the parties' contract terms. The reasoning in the opinion can be summarized in the following sequential steps, strictly reflecting the text:
- The court examined the specific provision in sub-clause (3) of Clause VI of the Schedule appended to the Indian Electricity Act, 1910, which provides that certain disputes (for example, disputes as to amount of energy to be taken or as to the position of the meter board, improper use of energy, defects in wires, fittings, works or apparatus, etc.) shall be referred to and decided by an Electrical Inspector. The text of that sub-clause was quoted in the opinion.
- From a reading of Annexure 1 (impugned order), the court observed that the question determined by respondent no. 2 concerned a prayer by respondent no. 3 for reduction of contract demand from 183 KVA to 150 KVA — a matter which, on its face, did not fall within the scope of sub-clause (3) of Clause VI as quoted.
- The court then considered the statutory scheme by reference to Section 3(2)(f) of the Indian Electricity Act and Section 26 of the Electricity (Supply) Act, 1948. It noted that the Schedule is incorporated into licences under Section 3(2)(f) and that Section 26 of the Electricity (Supply) Act deems the Board to have the powers and obligations of a licensee under the 1910 Act subject to specified provisos.
- The court pointed out the first proviso to Section 26 which makes Clause VI of the Schedule applicable to the Board only in areas where the Board has laid distribution mains and supply through them has commenced. The court found that this proviso did not apply in the present case; accordingly, Clause VI and its sub-clauses did not govern the dispute here.
- The court emphasized that Section 3(2)(f) of the Indian Electricity Act contemplates disputes between the State and a licensee. The present dispute arose between the Board (petitioners) and respondent no. 3 as a consumer; therefore the section was inapplicable to this consumer–Board dispute.
- The court reiterated the contractual nature of supply of electrical energy: the conditions of supply are governed by the agreement between the Board and the consumer (subject to applicable statutory provisions). The agreement between the parties (dated 25 February 1985) contained clause 9a, which prohibits the consumer from determining the agreement or seeking certain changes within the first three years.
- Applying clause 9a, the court concluded that a consumer's request for reduction of connected load could be entertained only after expiry of the three-year period and subject to the agreement of the Board — hence the reduction was essentially a contractual matter.
- The court reiterated legal principles that a statutory authority must act within the four corners of its statute, that statutory powers directed to be exercised in a particular form must be exercised in that manner, and that a public officer's powers exercised other than as prescribed are without jurisdiction.
- The court described the Electrical Inspector's role as that of a statutory arbitrator whose jurisdiction is limited to matters falling within the provisions of the Act and rules; by consenting parties cannot confer jurisdiction on a statutory authority where none exists. The court noted that no binding consent was recorded from the petitioners to confer jurisdiction on respondent no. 2.
- On these grounds the court concluded the impugned order was made without jurisdiction (a nullity) because the question of reduction of contract demand did not fall within any relevant statutory provision empowering the Electrical Inspector to decide it in the present circumstances.
Holding and Implications
Core Ruling:
The writ application was allowed and the impugned order dated 6 February 1991 (Annexure 1) passed by respondent no. 2 (the Electrical Inspector) was quashed.
Implications and Consequences:
- The court held that respondent no. 2 lacked jurisdiction to determine a consumer's request for reduction of contract demand in the circumstances of this case; accordingly the impugned order was declared void for want of jurisdiction.
- The decision directly affects the parties by setting aside respondent no. 2's determination that bills should be raised on the basis of 150 KVA; the matter will not stand decided by that impugned order.
- The Court noted that the Electrical Inspector may, however, determine other disputes and differences between the parties which are permissible in law and fall within his statutory jurisdiction; respondent nos. 3 and 4 are free to pursue other internal or statutory remedies in respect of other grievances.
- No broader new precedent beyond the statutory interpretation in this case was asserted by the court; the opinion confines its ruling to the facts and the statute and expressly states that a practice (i.e., previous entertaining of such references) cannot be elevated into a rule of law. The court made no order as to costs.
S.B Sinha, J.:— This writ application is directed against an order dated 6.2.2991 passed by the Electrical Inspector. Bihar as contained in Annexure 1 to the writ application whereby and where under the said authority being of the opinion that the maximum demand of the petitioners should be reduced from 183 KVA to 150 KVA, directed that the petitioners would make necessary arrangements for raising further bills in accordance with the existing tariff.
2. The fact of the matter lies in a very narrow compass.
3. The petitioner no. 1 is a statutory body constituted under section 5 of the Electricity (Supply) Act, 1948 and is a body corporate in terms of Section 12 thereof. The respondent no. 3 is also a statutory body having been constituted and incorporated under Bihar Fruits and Vegetables Development Corporation Act.
4. The respondent no. 3 Corporation entered into an agreement with the petitioner no. 1 for taking supply of high tension electrical, energy at a contract demand of 183 KVA on or about 25th February, 1985 which is contained in Annexure A to the counter affidavit filed on behalf of the respondent nos. 3 and 4.
5. According to the petitioners, the installed capacity as at the premises of the respondent no. 3 corporation was found to be 194 KVA upon an inspection having been made by the petitioner no. 3. The report in relation thereto is contained in Annexure 2 to the writ application.
6. The respondent no. 3 issued a letter dated 11.9.1986 to the petitioners requesting them to reduce the contract demand from 183 KVA to 150 KVA.
7. It has been contended by the petitioners that the request made by the respondent no. 3 was rejected by the petitioner no. 2. According to the petitioners, as the minimum period during which an agreement for supply of High Tension electrical energy remains operative for a period of three years, the request made by the petitioners was not and could not have been entertained.
8. In paragraph 10 of the writ petition, it has further been stated that the highest demand of the respondent no. 3 in different years were found to be as follows:—
“Year Highest K.V.A recorded in a month 1985-1986 139 K.V.A 1986-1987 173 K.V.A 1987-1988 116 K.V.A 1988-1989 116 K.V.A 1989-1990 77 K.V.A 1990-1991 179 K.V.A”
9. The respondent no. 3, however, referred the matter relating to reduction of connected load to the respondent no. 2. The petitioners having been noticed by the respondent no. 2, filed its written statement which is contained in Annexure 4 to the writ application.
10. By reason of the impugned order, the respondent no. 2 directed the petitioners to raise the bills in respect of consumption of electrical energy by the respondent no. 3 on the basis of 150 KVA.
11. The respondent nos. 3 and 4, in their counter affidavit, have disputed the correctness of the report of the petitioner no. 3 (Annexure 2).
12. It has also been stated that its maximum demand in any year never exceeded 75 KVA.
13. According to the respondent, it submitted representation on 20th February, 1989 along with actual consumption report charts from the January, 1987 to September, 1989 before the Superintending Engineer which are contained in Annexure D, D/1, D/2 and D/3 respectively. The respondents have further contended that upon receipt of the aforementioned representation, the Superintending Engineer by an office Memo dated 6.4.1989 directed the petitioner no. 3 to submit a specific report regarding the maximum drawl of the units in different financial years by the respondent no. 3 together with his comments thereon.
14. However, the petitioner no. 3 submitted a report dated 1.5.1989 regarding transformer only installed by the petitioners but did not make any comments with regard to the issues raised by it in its representation dated 20.2.1989
15. It has further been contended that the authorities of the respondent-corporation found some irregularities and abnormalities in the matter of calculation of power factor and thus it by a letter dated 24.4.1989 asked the petitioner no. 3 to rectify the defects in the matter. The said letter dated 24.4.1989 is contained in Annexure G to the counter affidavit.
16. The respondents have contended that the petitioners, however, without removing the defects in the matter submitted bills dated 6.6.1989 and 1.7.1989 charging 75 per cent of 177 KVA and 45 per cent of load factor (Annexure 1 and 1/1 to the counter affidavit) which are wholly illegal allegedly in view of Section 36(6) of the Act.
17. Another representation was filed by the respondent no. 3 on 20th July, 1989 before the Chairman of Electricity Board (Annexure J to the counter affidavit) wherein request was made to raise the bills on the basis of average consumption of electrical energy of previous two years.
18. By a letter dated 20th July, 1989 (Annexure L to the counter affidavit) the petitioner no. 4 however, directed the respondent no. 3 to pay a sum of Rs. 1,42,927.83 paise and threatened that if it fails to deposit the said amount on or before 29.7.1989, the electrical connection shall be disconnected.
19. The respondent no. 4 raised a dispute with regard to the correctness of the bills by reason of two letters dated 31.7.1989 before the petitioner no. 4 and the petitioner no. 2 respectively Annexure M and M/1 to the counter affidavit.
20. The respondent nos. 3 and 4 have contended that in this background the disputes between the parties were referred to the respondent no. 2 and the said dispute not only related to reduction of a contract demand but the raising of bills; correctness of meter and illegal action on the part of the petitioners.
21. The only question which has been raised at the bar is whether the petitioner no. 2 had the jurisdiction to direct the reduction of contract demand.
22. Mrs. Nilima Thakur, the learned counsel appearing on behalf of the petitioners submitted that the jurisdiction of the electrical inspector is confined to the provisions of Section 21(4) and Section 26(6) of the Indian Electricity Act and as the question of reduction of contract load as requested by the respondent no. 3 to the petitioner is a matter of agreement by and between the Board and its consumers, the respondent no. 2 had no jurisdiction to pass the impugned order.
23. The learned counsel, in this connection, has relied upon an order of this Court dated 18.9.1991 passed in CWJC No. 4910 of 1991 (Bihar State Electricity Board v. The State of Bihar).
24. Mr. L.K Bazla, the learned counsel appearing on behalf of the respondent no. 2 and Mr. Sidheshwar Prasad Singh, the learned counsel appearing on behalf of the respondent nos. 3 and 4, on the other hand, submitted that the jurisdiction of the electrical inspector is not only confined to the aforementioned provisions but he can exercise his jurisdiction also under Sections 24(2), 26(4), 33(2), 37(2)(ii)(g), 37(2)(ii)(K)50 and 55 and clauses VI, XIII, XV, XVI and XVII of the Schedule appended to the Indian Electricity Act, 1910 as also Rules 4 to 10 of the Indian Electricity Rules.
25. It was further submitted that in any event as both the parties agreed to abide by the decision of the respondent no. 2, the petitioners are estopped and precluded from challenging his jurisdiction.
26. Mr. Singh further submitted that in the event, if it be held that the respondent no. 2 had no jurisdiction to pass the impugned order as contained in Annexure 1 to the writ application, the respondents should be given liberty to raise such questions which were otherwise referable to the Electrical Inspector and/or before appropriate forums.
27. From the conspectus of events, as noticed herein-before, it is evident that there is no dispute with regard to the basic fact involved in this application.
28. It is not disputed by the petitioners that the respondent no. 2 has jurisdiction to determine any matter falling within sub-section (4) of Section 21 of the Act and sub-section (6) of Section 26 thereto.
29. It is true, as has been submitted by Mr. Bazla that apart from the said provisions, there are many other provisions contained in Indian Electricity Act, 1910 and the rules framed there under which provides for the jurisdiction of the respondent no. 2 to determine the disputes and differences arising between the parties referred to therein.
30. However, in this case it was submitted by the learned counsels that the respondent no. 2 had jurisdiction to determine the issue in question in terms of sub-clause (3) of Clause VI of the Schedule appended to the Indian Electricity Act which reads as follows:—
“Where any difference or dispute arises as to the amount of energy to be taken or guaranteed as aforesaid, or as to the cost of any service-line or as to the sufficiency of the security offered by any owner or occupies, (or as to the position of the meter board) or as to the improper use of energy, or as to any alleged defect in any wires, fittings, works or apparatus or as to the amount of the expenses incurred under the third proviso to sub-clause (1), the matter shall be referred to an Electrical Inspector and decided by him.”
31. From a bare perusal of the impugned order as contained in Annexure 1 to the writ application, it is evident that the only question with which the respondent no. 2 was concerned arose out of a prayer made by the respondent no. 3 for reduction of contract demand from 183 KVA to 150 KVA.
32. It was, therefore, clearly a case which did not fall within the purview of the provisions of sub-clause 3 of clause VI of the Schedule appended to Indian Electricity Act as referred to herein before.
33. The Schedule appended to the Act is referable to the provisions of Section 3(2)(f) of the Indian Electricity Act which reads as follows:
“(2) In respect of every licence and the grant thereof the following provisions shall have effect, namely………
(f) the provisions contained in the Schedule shall be deemed to be incorporated with, and to form part of every license granted under this Part, save in so far as they are expressly added to, varied or excepted by the license, and shall, subject to any such additions, variations or exceptions which the (State Government) is hereby empowered to make, apply to the undertaking authorized by the licence:
Provided that, where a license is granted in accordance with the provisions of Clause IX of the Schedule for the supply of energy to other licenses for distribution by them, then, in so far as such license relates to such supply, the provisions of Clauses IV, V, VI, VII, VIII and XII of the Schedule shall not be deemed to be incorporated with the license.”
34. From a bare perusal of the aforementioned provision, it is evident that the jurisdiction of the Electrical Inspector can be invoked only when a dispute with regard to the aforementioned matter arises by and between the State and the licensee.
35. Section 26 of the Electricity (Supply) Act provides as follows:—
“26. Board to have powers and obligations of licensee under Act 9 of 1910—Subject to the provisions of this Act, the Board shall, in respect of the whole State, have all the powers and obligations of a Licensee under the Indian Electricity Act, 1910 (9 of 1910), and this Act shall be deemed to be the License ‘of the Board for the purposes of that Act:
Provided that nothing in Sections 3 to 11, sub-sections (2) and (3) of Section 21 and (Section 22, sub-section (2) of Section 22-A and Section 23 and 27) of that Act or in (clauses I to V, Clause VII to Clauses IX and XII) of the Schedule to that Act relating to the duties and obligations of a licence shall apply to the Board;
Provided further that the provisions of Clause VI of the Schedule to that Act shall apply to the Board in respect of that area only where distribution mains have been laid by the Board and the supply of energy through any of them has commenced.”
36. From a bare perusal of the first proviso, it is, thus, evident that clause VI of the Schedule of the Indian Electricity Act applies to the Board in respect of that area only where distribution mains have been laid by the Board and the Supply of energy through any of them has commenced. Such is not the case here.
37. Apparently, therefore various sub-clauses contained in clause VI of the Schedule appended to the said Act have no application in the facts and circumstances of the case.
38. Further, as noticed hereinbefore, Section 3(2)(f) of the Act postulates a dispute by and between the State and the licensee and thus, the said provision has no application whatsoever in relation to a dispute of the nature as has been raised by the respondent no. 3 as a consumer with the petitioners.
39. The supply of electrical energy is a matter of contract by and between the Board and consumer. The conditions of supply of electrical energy, thus, are governed by the terms and conditions of the agreement; subject of course to the provisions of the said Act and the Electricity (Supply) Act, 1948 and the rules framed under the said Act.
40. It is not the case of either of the parties that in relation to a demand of consumer to the Board for reduction in the contract demand falls within one or the other provisions contained in the said Act or the Electricity (Supply) Act.
41. Clause 9a of the agreement dated 25th February, 1985 reads thus:—
“9a. The consumer shall not be at liberty to determine this agreement before the expiration of three years from the date of commencement of the supply of energy. The consumer may determine this agreement with effect from any date after the said period on giving to the Board not less than twelve calendar months previous notice in writing in that behalf and upon the expiration of the period of such notice this agreement shall cease and determine without prejudice to any right which may then have occurred to the Board here under provided always that the consumer may at any time with the previous consent of the Board transfer and assign this agreement to any other person and upon subscription of such transfer, this agreement shall be binding on the transferee and Board and take effect in all respect as if the transferee had originally been a party hereto in place of the consumer who shall henceforth be discharged from all liabilities under or in respect thereof.”
42. It has not been disputed before us that under the agreement the prayer of a consumer for reduction of connected load can be made only after expiry of three years from the date of entering into the agreement subject of course to agreement to the contract entered into by and between the parties with regard thereto. The matter relating to reduction of the connected demand thus is essentially a matter of contract and in that view of the matter, there cannot be any doubt that the respondent no. 2 has no jurisdiction in such matter.
43. The Electrical Inspector is appointed in terms of Section 36 of the Indian Electricity Act, and in terms of sub-section (2) of the aforementioned provisions an appeal lies from an order passed by him.
44. It is now well known that a statutory authority must confine his jurisdiction within the four corner of the statute.
45. It is also well known that when the legislature directs a thing to be done in a particular manner, the same must be done in that manner or not at all.
46. It is equally well established that if a certain power granted to a public officer is to be exercised in a particular manner or form and the same is not exercised in that manner or form, the same would be invalid or without jurisdiction.
47. The position of an Electrical Inspector is that of a statutory arbitrator. Its decision subject to result of appeal, is final and binding upon the parties.
48. The respondent no. 2, therefore, was obliged to exercise his jurisdiction with regard to determination of a dispute in relation to a matter which falls within one or the other provisions contained in the Indian Electricity Act or the rules framed thereunder and not otherwise.
49. In view of the fact that the matter relating to a demand by a consumer for reduction of its contract demand does not fall within the purview of any provisions of the Act or the rules framed thereunder, it must be held that the impugned order passed by the respondent no. 2 is a nullity being wholly illegal and without jurisdiction.
50. In the facts and circumstances of this case, I have no other option but to hold that there was inherent lack of jurisdiction on the part of the respondent no. 2 to determine the aforementioned questions.
51. It has been stated by Mr. Singh, the learned counsel appearing on behalf of the respondent nos. 3 and 4 that the dispute of the nature referred to by the respondent no. 3 before the respondent no. 2 used to be entertained by him. Such a reference was, therefore, made to the respondent no. 2 in view of the prevalent practice.
52. It is now well known that a practice cannot be exalted into a rule of law.
53. It is, therefore, also clear that the possibility of the petitioners taking part of the proceeding before the respondent no. 2 on such misconception of law, therefore, cannot be ruled out.
54. Further, it is well known that by consent the parties cannot confer a jurisdiction upon a statutory authority when he has none.
55. Further, from a perusal of Annexure 1 to the writ application, it appears that the respondent no. 2 has recorded as follows:—
“The learned counsel appearing on behalf of both the parties have agreed that the maximum demand of the petitioner may be decided on the basis of the data submitted by both the parties.”
56. No consent, therefore, was given on behalf of the petitioners, so as to enable the respondent no. 2 to assume jurisdiction.
57. It is not a case where the parties had referred the matter to the respondent no. 2 for adjudication of the disputes and differences between them by reason of an agreement. The respondent no. 2, therefore, did not act as an arbitrator on the basis of any agreement between the parties to that effect.
58. From the facts as stated in the counter affidavit, it is evident that the reference of the purported dispute aforementioned was made by the respondent no. 3 to the respondent no. 2 unilaterally.
59. For the reasons aforementioned, the impugned order as contained in Annexure 1 to the writ application cannot be sustained and thus is liable to be quashed.
60. However, before parting with the case, it must be mentioned that as the Electrical Inspector has not determined the other disputes and differences between the petitioners and the respondent nos. 3 and 4, he would be (Sic.) entitled to do so (Sic.) in permissible in law. It would also be open to the respondent nos, 3 and 4 to pursue their other internal remedies so far as other grievances are concerned.
61. However, we feel that both the adversaries being statutory bodies, they should make all endeavors to resolve their disputes amicably.
62. I have no doubt in my mind that the petitioners shall bestow serious consideration for the purpose of redressal of grievances of the respondent no. 3 inasmuch as while supplying electrical energy, the petitioner no. 1 not only discharges a statutory fact but the services rendered by it is a public utility service. The petitioner no. 1 being a State within the meaning of Art. 12 of the Constitution is expected to act fairly and reasonably in its dealings with the consumers.
63. For the reasons aforementioned, this application is allowed and the impugned order dated 6.2.1991 as contained in Annexure 1 to the writ application is quashed.
64. However, in the facts and circumstances of the case, there will be no order as to costs.
65. B.K Roy, J.:—I agree.
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