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Transmission Corpn. Of A.P Ltd. And Others v. Sri Rama Krishna Rice Mill .
Factual and Procedural Background
The respondent, a low-tension category consumer, had its business premises inspected by officials of the appellant-corporation (successor to the erstwhile Andhra Pradesh State Electricity Board). A provisional assessment dated 10-9-1993 alleged pilferage of energy and demanded Rs 27,610, of which 50% was deposited to avoid disconnection. A show-cause notice dated 15-12-1993 proposed a final assessment of Rs 1,41,270; objections were filed, but on 29-9-1998 the provisional figure was confirmed.
Invoking the appellate remedy under the Board’s “Terms and Conditions of Supply of Electrical Energy,” the respondent sought permission to cross-examine officials whose statements underpinned the assessment. The Appellate Authority rejected the request on 6-3-1999, citing absence of any such procedural provision. A writ petition followed. Observing conflicting single-judge views, the matter was referred to a Division Bench of the High Court, which held that principles of fair play required permitting cross-examination where reliance was placed on statements or reports alleging pilferage.
The present appeal before the Supreme Court challenges that High Court ruling.
Legal Issues Presented
- Whether, under clause 39.9.2 of the “Terms and Conditions of Supply,” a consumer has a right to cross-examine officials whose statements or reports are relied upon for final assessment of pilferage.
- To what extent the principles of natural justice, particularly “reasonable opportunity,” necessitate cross-examination in quasi-judicial assessments by electricity authorities.
Arguments of the Parties
Appellants’ Arguments
- The Terms and Conditions do not envisage recording oral evidence; hence no right of cross-examination exists.
- Officials have no personal interest; their statements can be fairly evaluated without cross-examination.
- Reliance on Hyderabad Vanaspathi Ltd. v. A.P. SEB (1998) 4 SCC 470, paras 39 & 43, to show that the existing procedure satisfies natural justice.
- Cited New Prakash Transport, Nagendra Nath Bora and Bakshi Ghulam Mohd to contend that a hearing need not include cross-examination.
Respondent’s Arguments
- Clause 39.9.2 mandates a “reasonable opportunity,” which, where statements are relied upon, necessarily includes cross-examination.
- Without testing officials’ statements, the consumer is prejudiced in a proceeding that entails serious civil consequences.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Hyderabad Vanaspathi Ltd. v. A.P. SEB (1998) 4 SCC 470 | At disconnection stage, no opportunity of hearing is required; departmental adjudication not per se prejudicial. | Distinguished; principles applicable to disconnection notices do not govern final assessment under clause 39.9.2. |
| M.P. Electricity Board v. Harsh Wood Products (1996) 4 SCC 522 | Validity of summary disconnection procedure vis-à-vis natural justice. | Referenced to explain limited relevance to present context of final assessment. |
| New Prakash Transport Co. Ltd. v. New Suwarna Transport Co. Ltd. 1957 SCR 98 | Where rules do not provide for oral evidence, cross-examination is not implicit. | Relied on by appellants; Court held non-dispositive because clause 39.9.2 expressly requires “reasonable opportunity.” |
| Nagendra Nath Bora v. Commr. of Hills Division (1958 SCR 1240) | Absence of evidentiary procedure in rules limits implied rights. | Cited by appellants; Court found the factual matrix distinguishable. |
| State of J&K v. Bakshi Ghulam Mohd (1966 Supp SCR 401) | Right to hearing does not automatically include cross-examination. | Held irrelevant because that commission entailed no penal consequences. |
| Khem Chand v. Union of India (1958 SCR 1080) | “Reasonable opportunity” under Art. 311(2) includes cross-examination. | Quoted illustratively; Court clarified the present enquiry is different, yet concept of “reasonable” remains instructive. |
| Labouchere v. Dawson (1872) LR 13 Eq 322 | Judicial articulation of the flexible meaning of “reasonable.” | Used to underscore that “reasonable opportunity” varies with circumstances. |
Court's Reasoning and Analysis
The Supreme Court acknowledged that clause 39.9.2 explicitly requires the assessing officer to give the consumer a “reasonable opportunity.” Drawing on dictionary and judicial explanations of “reasonable,” the Court emphasised that the content of such opportunity is context-specific.
The Court rejected a blanket rule either granting or denying cross-examination:
- Where the assessment is based solely on accounting data, cross-examination of the person who prepared the accounts may be unnecessary.
- Where reports or statements alleging tampering or pilferage are relied upon, the consumer may need to test those statements through cross-examination.
Accordingly, the consumer must file a specific application showing why cross-examination of named officials is necessary. The adjudicating officer must then pass a reasoned order granting or refusing the request. Casual acceptance or rejection is impermissible. If refused, the consumer may raise prejudice before the Appellate Authority.
In the present matter, the respondent had not detailed why cross-examination was required; hence an opportunity to file a fresh, reasoned application was warranted.
Holding and Implications
APPEAL DISPOSED OF; no costs.
The respondent may submit a fresh application for cross-examination, which the Appellate Authority must consider on the criteria set out above. The ruling clarifies that “reasonable opportunity” under clause 39.9.2 is elastic: cross-examination is not an automatic right but may be indispensable when disputed statements form the basis of liability. The decision fine-tunes procedural fairness in electricity-assessment disputes without establishing a broad constitutional precedent.
Arijit Pasayat, J.— Challenge in this appeal is to the legality of the judgment rendered by a Division Bench of the Andhra Pradesh High Court. The controversy lies within a very narrow compass and, therefore, the factual position needs to be noted in brief. Appellant 1 Corporation is the successor company of the erstwhile Andhra Pradesh State Electricity Board (in short “the Board”).
2. The business premises of the respondent were inspected by the officials of Appellant 1 Corporation. The respondent was a low-tension category consumer. On 10-9-1993 a provisional assessment was made alleging pilferage of energy and a sum of Rs 27,610 was demanded. It was indicated to the respondent that if it wanted to avoid disconnection it should deposit 50% of the amount fixed on provisional assessment. The same was deposited. On 15-12-1993 a show-cause notice was issued proposing to charge Rs 1,41,270 on final assessment. The respondent filed its objection. On 29-9-1998 the final assessment was made confirming the amount indicated in the show-cause notice.
3. Appeal as provided under the Terms and Conditions of Supply of Electrical Energy of the Andhra Pradesh State Electricity Board was filed. The said Terms and Conditions of Supply were notified by the Board in exercise of powers conferred by Section 49 of the Electricity (Supply) Act, 1948. A prayer was made to grant opportunity to cross-examine certain officials of Appellant 1 Corporation on the basis of whose statements the final assessment was made. By order dated 6-3-1999 the request was declined on the ground that there was no provision for such a prayer being accepted. A writ petition was filed before the High Court. While hearing the matter on the issue, the learned Single Judge noted that there were inconsistent views expressed by different learned Single Judges. This is how the matter was referred to a Division Bench. By the impugned order the High Court noted that there was no dispute that the amount on being determined by the final assessment on the ground of alleged pilferage if recovered would result in civil consequences. Therefore, the enquiry being quasi-judicial in nature fair play is required and fair play implies the fair opportunity which includes cross-examination of persons whose statements were going to be relied on by the authorities. The High Court accordingly held as follows:
“In the instant case, if the authorities are relying only on accounts and not on any statements or reports, may be the cross-examination of any person who has prepared the accounts is not necessary. But if any statement or report is made pointing out the act of pilferage, the petitioner shall be entitled to call the said person for cross-examination.”
4. Learned counsel for the appellants submitted that the High Court's view about the desirability of granting opportunity for cross-examination is not supportable in law. According to him, the officers have no personal interest in the matter and, therefore, their statements are to be considered in the proper perspective by the authority making the final assessment. There was no question of any cross-examination of such persons. Strong reliance was placed on a decision of this Court in Hyderabad Vanaspathi Ltd. v. A.P SEB (1998) 4 SCC 470, more particularly, paras 39 and 43. With reference to a decision of this Court in New Prakash Transport Co. Ltd. v. New Suwarna Transport Co. Ltd. 1957 SCR 98, AIR 1957 SC 232 it was submitted that the Terms and Conditions of Supply do not envisage grant of an opportunity for cross-examination as the procedure provided for does not contemplate anything like recording oral evidence and receiving documentary evidence in the normal way as in courts of law. What is necessary is granting a fair and proper hearing and this has been done. With reference to another decision of this Court in Nagendra Nath Bora v. Commr. of Hills Division and Appeals 1958 SCR 1240, AIR 1958 SC 398 it was submitted that as in the said case, the rules in the present case make no provisions for the reception of evidence oral or documentary and even for issuing of any notice; therefore also the High Court was not right. Finally, with reference to a decision of this Court in State of J&K v. Bakshi Ghulam Mohd. 1966 Supp SCR 401, AIR 1967 SC 122 it was submitted that the right to hearing did not include the right to cross-examine and the right must depend upon the circumstances.
5. In response, learned counsel for the respondent submitted that clause 39.9.2 provides for grant of a “reasonable opportunity” to the consumer. If the statements of the officers are to be relied upon without being tested by cross-examination, the consumer will be highly prejudiced and, therefore, the right to cross-examine them is inbuilt in clause 39.9.2 of the Terms and Conditions of Supply. Clause 39.9.2 deals with final assessment. Sub-clauses (1) to (3) thereof are extracted below for ready reference:
39.9.1 After the provisional assessment, notice is served upon the consumer as mentioned in clause 39.3 thereof. The officer authorised in this behalf by the Board (see statement referred to in clause 39.4 above) shall issue a show-cause notice in the forms prescribed therefor advising the consumer to file his representation, if any, within 30 days from the receipt of the notice.
39.9.2 The said officer of the Board shall, after the expiry of the aforesaid notice period, enquire into the matter and after giving reasonable opportunity to the consumer and taking into account all relevant facts and circumstances shall decide whether the consumer has committed malpractice or pilferage of energy and if so satisfied proceed to assess to the best of his judgment, the loss sustained by the Board on account of such malpractice or pilferage of energy by the consumer. The consumer may be represented by an advocate or any other person at the time of personal hearing provided the consumer files proper vakalatnama or power of attorney as the case may be.
39.9.3 The final assessing authority shall then pass an order setting out his conclusions and the reasons thereof and communicate a copy of the order to the consumer and demand the amount, if any, due from the consumer on the basis of such order after giving credit to the amounts paid by him.
6. At this juncture, it is to be noted that in para 39 of Hyderabad Vanaspathi case (1998) 4 SCC 470 what was observed by this Court was in relation to disconnection and for that purpose reliance was placed on an earlier decision of this Court in M.P Electricity Board v. Harsh Wood Products (1996) 4 SCC 522. At the stage of issuing notice of disconnection there is no question of granting any opportunity to the consumer. On the basis of prima facie view of the officer concerned, notice of disconnection is issued. In that context it was held both in M.P Electricity Board (1996) 4 SCC 522 and Hyderabad Vanaspathi cases (1998) 4 SCC 470 that the procedure laid down was not in violation of the principles of natural justice. So far as para 43 of Hyderabad Vanaspathi case (1998) 4 SCC 470 is concerned, that related to the absence of personal lis or interest of the adjudicator. In that background it was held that merely because the departmental authority was adjudicating there was no prejudice involved. Those principles are not of any assistance in the present case. In the case at hand without even granting of an opportunity to the respondent, the final order of assessment was passed. Merely taking note of the objection filed cannot be said to be compliance with the provisions contained in clause 39.9.2 Therefore, the respondent had made a prayer before the Appellate Authority. The parameters of the principles of natural justice cannot be covered by any straitjacket formula. It would vary depending upon the circumstances involved. It is true that the Terms and Conditions of Supply did not contemplate anything like recording oral or documentary evidence in the way as is normally done in the courts of law. But clause 39.9.2 itself provides for a reasonable opportunity being granted. What would be a reasonable opportunity would also depend upon the fact situation. In Advanced Law Lexicon by P. Ramanatha Aiyar (3rd Edn., Vol. 4, pp. 3959 and 3968) the word “reasonable” has been described as follows:
(i) “[What is] fair, proper, or moderate under the circumstances….”
(ii) “The expression ‘reasonable’ is not susceptible of a clear and precise definition. A thing which is reasonable in one case may not be reasonable in another. Reasonable does not mean the best, it means most suitable in a given set of circumstances.”
(iii) “There is no point on which a greater amount of decision is to be found in courts of law and equity than as to what is reasonable: It is impossible a priori to state what is reasonable as such in all cases. You must have the particular facts of each case established before you can ascertain what is meant by reasonable under the circumstances—Lord Romilly, M.R, Labouchere v. Dawson (1872) LR 13 Eq 322.”
7. In Khem Chand v. Union of India 1958 SCR 1080, AIR 1958 SC 300 a Constitution Bench of this Court explained the meaning of “reasonable opportunity” thus in the context of Article 311(2) of the Constitution of 1950 (in short “the Constitution”): (SCR pp. 1096-97)
“(a) an opportunity to deny his guilt and establish his innocence….
(b) an opportunity to defend himself by cross-examining the witnesses produced against him and by examining himself or any other witnesses in support of his defence; and finally
(c) an opportunity to make his representation as to why the proposed punishment should not be inflicted on him….”
8. The nature of adjudication under clause 39.9.2 of the Terms and Conditions of Supply is somewhat different from an enquiry under Article 311(2) of the Constitution. It cannot be laid down as a rule of universal application that whenever the statement of the departmental officer is pressed into service for the purpose of adjudication, a right of cross-examination is inbuilt. On the other hand, what was said in Bakshi case 1966 Supp SCR 401, AIR 1967 SC 122 has also really no relevance because that was a case where no penal consequences were involved and the Commission was only a fact-finding Commission and, therefore, is clearly distinguishable of facts.
9. In order to establish that the cross-examination is necessary, the consumer has to make out a case for the same. Merely stating that the statement of an officer is being utilised for the purpose of adjudication would not be sufficient in all cases. If an application is made requesting for grant of an opportunity to cross-examine any official, the same has to be considered by the adjudicating authority who shall have to either grant the request or pass a reasoned order if he chooses to reject the application. In that event an adjudication being concluded, it shall be certainly open to the consumer to establish before the Appellate Authority as to how he has been prejudiced by the refusal to grant an opportunity to cross-examine any official. As has been rightly noted by the High Court in the impugned judgment where the reliance is only on accounts prepared by a person, cross-examination is not necessary. But where it is based on reports alleging tampering or pilferage, the fact situation may be different. Before asking for cross-examination the consumer may be granted an opportunity to look into the documents on which the adjudication is proposed. In that event, he will be in a position to know as to the author of which statement is necessary to be cross-examined. The applications for cross-examination are not to be filed in a routine manner and equally also not to be disposed of by an adjudicator in casual or routine manner. There has to be application of mind by him. Similarly, as noted above, the consumer has to show as to why cross-examination is necessary.
10. In the instant case the respondent had not indicated as to why the cross-examination was necessary. If a fresh application is made, the same shall be duly considered by the Appellate Authority, keeping in view the principles indicated above. The appeal is accordingly disposed of. No costs.
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