AMICUS AI
Citation Codes
Neutral Citations
1997 INSC 276
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Indian Electricity (Supply) Act
  • Article 226 of the Constitution
  • Indian Electricity Act
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Cites
Cited by
Citation Codes
Neutral Citations
1997 INSC 276
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Indian Electricity (Supply) Act
  • Article 226 of the Constitution
  • Indian Electricity Act
Smart Summary

Factual and Procedural Background

The Punjab State Electricity Board (the appellant) provided an electricity connection to the respondent on 16-01-1983. Suspecting meter tampering, the Board removed the existing meter on 06-05-1984 and installed a new one on 09-05-1984. Subsequently, on 18-03-1985, the Board issued Bill No. 44 demanding Rs 1,90,498.79 for consumption covering December 1983 to 16-01-1985.

Contending that the demand was unwarranted, the respondent filed Civil Suit No. 85 of 1985 on 25-03-1985 seeking a permanent injunction to restrain the Board from recovering the amount. The Sub-Judge decreed in favour of the respondent on 16-09-1987. Both the first appeal and the second appeal (RSA No. 1865 of 1991) before the Punjab and Haryana High Court were dismissed. The Board approached the Supreme Court by special-leave petition, which was granted, leading to the present appeal.

Legal Issues Presented

  1. Whether the jurisdiction of civil courts is impliedly barred when the Punjab State Electricity Board has provided a statutory mechanism (review/appeal) for resolving billing disputes.
  2. If the civil suit is not maintainable, what relief, if any, should be afforded to the consumer regarding payment of the disputed amount.

Arguments of the Parties

Appellant Board's Arguments

  • The Board’s circulars and instructions constitute a complete statutory mechanism for review and appeal, thereby impliedly barring the jurisdiction of civil courts under Section 9 of the Code of Civil Procedure.
  • Consumers must first exhaust the departmental remedies before approaching any judicial forum.

Respondent Consumer's Arguments

  • The Board’s internal authorities allegedly do not conduct hearings or issue reasoned orders, justifying recourse to a civil suit.
  • Immediate payment of the large demand is financially onerous; instalments should therefore be permitted.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court examined multiple circulars issued by the Electricity Board (1979, 1980, 1981, 1984, and 1989), all of which establish detailed procedures for:

  • Inspection by Flying Squads and issuance of on-site notices.
  • Review of demands by designated officers and committees, graded by monetary limits.
  • Provision for consumers to file review/appeal petitions, with an expectation of expeditious, reasoned decisions.
  • Conditional restoration of supply upon payment of 75% of the disputed demand when review is pending.

Because these instructions supply a fair and explicit mechanism, the Court held that civil court cognizance is “by necessary implication” excluded. Section 9 CPC allows exclusion where a special statute creates an alternative forum with adequate procedural safeguards. The Court rejected the respondent’s contention that departmental authorities do not issue reasoned orders, emphasising that they are enjoined to do so and that any deficiency can be challenged under Article 226 of the Constitution.

On the respondent’s plea of financial hardship, the Court accepted that paying the entire demand at once would be difficult. Exercising equitable discretion, it directed payment in six monthly instalments without prejudicing the respondent’s right to pursue departmental remedies.

Holding and Implications

HELD: The appeal is allowed; the civil suit is not maintainable.

The respondent may file an appeal/review before the appropriate Board authority within six weeks. Pending that process, the respondent must pay the disputed amount in six equal monthly instalments beginning 05-04-1997. Should the respondent ultimately succeed, the Board must refund the sums with 12% interest from the dates of deposit.

Implications: The decision reinforces the principle that where a specialised statutory regime provides an adequate dispute-resolution mechanism, civil courts will refrain from intervention. While no new legal precedent was formally articulated, the judgment underscores the obligational nature of internal review procedures and signals that consumers must ordinarily exhaust them before resorting to judicial forums.

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    Punjab State Electricity Board And Another v. Ashwani Kumar .

    Order

    1. Leave granted. We have heard the learned counsel on both sides.

    2. The appeal by special leave arises from the judgment of the Punjab and Haryana High Court made on 9-12-1992 in RSA No. 1865 of 1991. The appellant Board had given connection of supply of electrical energy to the respondent on 16-1-1983. Since the meter installed was suspected to have been tampered with it was removed on 6-5-1984. On an application made by the respondent, a new meter was installed on 9-5-1984. On 18-3-1985 Bill No. 44 for Rs 1,90,498.79 for the period December 1983 to 16-1-1985 was sent to the respondent. Feeling aggrieved, the respondent filed the Civil Suit No. 85 of 1985 on 25-3-1985 for permanent injunction, restraining the Board or its officers from collecting and recovering the amount from the respondent. The Sub-Judge on 16-9-1987 granted the decree. On appeal, it was confirmed and the second appeal has been dismissed. Thus, this appeal by special leave petition.

    3. On 19-7-1996 when the matter came up for hearing, this Court passed an order observing that Section 4, Instruction 115(1)(b) of the sales manual which is placed on record, indicates the procedure to be followed when the meter was found to be accurate, but the reading was inaccurate. Instruction relating the procedure to be followed for resolving the dispute was not made part of the record and, therefore, time was granted to the appellant to produce the necessary record in that behalf. In furtherance thereof, the record has been placed on record.

    4. Now, it is clear that the Electricity Board itself has issued circulars from time to time in that behalf. Circular No. 111 of 1980, dated 20-12-1980, was issued in partial modification of the earlier Circulars No. 151 of 1979 dated 21-2-1979 and No. 4723.cadre dated 24-7-1980. Therein it states that the Flying Squads/Enforcement Staff shall henceforth prepare their report in respect of checking of the defaulting premises of the delinquent consumers and serve the requisite notice to the consumer at site itself with a copy to the SDO/DS concerned. Thereafter, the Flying Squad shall not revise their findings or the quantum of penalty already intimated. Cases of default of payment up to Rs 5000 are reviewable by the Superintending Engineer/DS and the cases of default beyond Rs 5000 are reviewable by CE or DS concerned. Subsequently, instructions were issued under Order No. 427 dated 26-11-1981 stating that the negotiations with the consumers or withdrawal of cases from the court or the arbitration proceedings or faulty meter cases may be taken by the Committee consisting of (1) Chief Engineer (DS concerned); (2) Chief Accounts Officer or Chief Auditor as may be decided by the Member, Finance; (3) Legal Advisor; (4) Director, Commercial. The above Committee shall exercise the power up to Rs 5000 in each case and decide all the cases including those pending in the court, except enforcement of the waiving.

    5. Subsequently, further Circular No. 111 of 1984 dated 5-12-1984 was issued reiterating the powers of the Flying Squads given in earlier circulars in para 2(i) and para 2(ii). The Flying Squads/Enforcement Staff shall not revise their findings or the quantum of compensation already intimated. Under clause (iii) it provides for the following authorities to review the compensation amount once intimated to the consumer:

    (a) Cases up to Rs 10,000 — SE/DS (b) Cases beyond Rs 10,000 and up to Rs 5 lakhs — CE/DS (c) Cases beyond Rs 5 lakhs (the cases shall be put up by CE/Commercial through Director/Enforcement). — Member (T)

    Clause (v) postulates that where the consumer himself accepts the findings of the Flying Squads and makes the payment of compensation amount, such cases shall not later on be the subject-matter of review by the DS officers.

    6. Clause (vi) provides that notwithstanding the fact that the DS officers agree or disagree with the findings of the Flying Squads, but if the consumer protests against the charges, the review, appeal of such a consumer shall be registered by the SDO/DS concerned and forwarded to the reviewing authority through proper channel. The proper channels have been noted in the subsequent sub-para of para (vi). Para (vii) indicates that every effort shall be made by the reviewing authority to ensure that the review appeal is decided within the stipulated period of disconnection; where it is not possible to do so, the consumer shall be asked by the reviewing authority to deposit at least 75% of the amount of compensation under protest so that supply could be restored, after the expiry of stipulated period of disconnection. Where a consumer does not come forward to deposit the amount so worked out in the manner as stipulated above, the supply shall not be restored till finalisation of the review/appeal.

    7. The position was subsequently reviewed under Circular No. 26 of 1989 dated 7-8-1989. Therein, it is postulated that the Committee shall be headed by the Superintending Engineer/DS concerned and shall have the following members:

    1. SE/DS Chairman of the Committee 2. XEN/DS concerned Member Convenor 3. XEN/Enforcement Member (for cases involving checking by Enforcement staff) 4. AOO/Field Member 5. Representative of Industry Member

    It is further provided that the Committee shall have powers to review and decide all cases for recovery waiving off the irrecoverable amount up to Rs 30,000 in each case. This Committee shall decide all disputed cases including the cases arising out of enforcement checking. This Committee shall act on the basis of general fairness and equity and not necessarily by the rigid departmental instructions. It would, thus, be seen that these statutory rules issued by the Board intended to dispose of the disputes expeditiously without undue delay, so that the consumer may not be subjected to hardship due to disconnection or non-payment of the amount charged, as demanded under the rules, for long period. At the same time the Board is also entitled to recover the amount expeditiously from the consumer, so that the Board functions efficiently and effectively and also supplies the electrical energy to the consumer without any inconvenience to the consumer as non-supply of electrical energy hampers the progress of the industry, etc.

    8. The question then arises whether the civil court would be justified in entertaining the suit and issue injunction as prayed for? It is true, as contended by Shri Goyal, learned Senior Counsel, that the objections were raised in the written statement as to the maintainability of the suit but the same were given up. Section 9 of the CPC provides that the civil court shall try all suits of civil nature, subject to pecuniary jurisdiction, unless their cognizance is expressly or by necessary implication barred. Such suit would not be maintainable. It is true that ordinarily, the civil court has jurisdiction to go into and try the disputed questions of civil nature, where the fundamental fairness of procedure has been violated. The statutory circulars adumbrated above do indicate that a fundamental fairness of the procedure has been prescribed in the rules and is being followed. By necessary implication, the cognizance of the civil cause has been excluded. As a consequence, the civil court shall not be justified in entertaining this suit and giving the declaration without directing the party to avail of the remedy provided under the Indian Electricity Act and the Indian Electricity (Supply) Act and the Instructions issued by the Board in that behalf from time to time as stated above.

    9. Shri Goyal has contended that the authorities do not hear the parties, nor give a reasoned order. Therefore, the parties cannot be precluded to avail of the remedy of a suit. We cannot accept such a broad and generalised proposition. When the provision for appeal by way of review has been provided by the statutory instructions, and the parties are directed to avail of the remedy, the authorities are enjoined to consider all the objections raised by the consumer and to pass, after consideration, the reasoned order in that behalf, so that the aggrieved consumer, if not satisfied with the order passed by the Board/appellate authority, can avail of the remedy available under Article 226 of the Constitution. Therefore, by necessary implication, the appropriate competent authority should hear the parties, consider their objections and pass the reasoned order, either accepting or negativing the claim. Of course it is not like a judgment of a civil court. It is then contended that the respondent has been subjected to pay huge amount of bill in a short period; hence, it is a case for interference. We find no force in the contention. May be that due to the advice given by the counsel, the respondent obviously has availed of the remedy of the suit, instead of departmental appeal. In our view, by necessary implication the suit is not maintainable. Therefore, the respondent is at liberty to avail the remedy of appeal within six weeks from today and raise the factual objections before the Board and the Board/appellate authority would consider and dispose of them, as indicated earlier, on merits.

    10. It is next contended that the respondent has been charged a huge amount. It would be difficult for him to pay the amount in lump sum. Therefore, he may be given permission to pay the amount in instalments. We find that the request is genuine and in view of the long lapse of time, we direct that the respondent would pay the amount in demand in six monthly instalments. The first instalment shall be paid on or before 5-4-1997. In case he succeeds in appeal or in the proceedings, the Board shall refund the amount with interest at the rate of 12 per cent per annum from the date of deposit.

    11. The appeal is accordingly allowed, but in the circumstances, without costs.

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    Comments

    Punjab State Electricity Board And Another v. Ashwani Kumar .
    (Mar 14, 1997)