M.P Electricity Boar... v. Manju Singh Chauhan ..., Supreme Court Of India, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

Civil Appeal No. 4528 of 1991, decided on September 23, 1999

Disposition

allowed

Attorney(S)

Judges

Justice S. Saghir Ahmad

Acts

the Act
Consumer Protection Act, 1986

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Smart Summary

Factual and Procedural Background

The respondent entered into a written agreement with the Madhya Pradesh State Electricity Board for the supply of 168 KVA electricity. Clause 13(d) of the agreement allowed the consumer to request a reduction in contracted demand, leaving the decision to the Board’s discretion. On 23 March 1987 the respondent sought to reduce the load to 100 KVA, but the Board rejected the request on 23 May 1987. The respondent then filed a complaint before the National Consumer Disputes Redressal Commission seeking damages of Rs 20.05 lakhs, alleging deficiency of service. The National Commission denied compensation but directed the Board to bill the respondent between 23-5-1987 and 31-10-1987 on the basis of 100 KVA. The Electricity Board appealed to the Supreme Court against this billing direction.

Legal Issues Presented

Whether the Board’s refusal to reduce the contracted demand from 168 KVA to 100 KVA, in exercise of its discretion under clause 13(d) of the agreement, constituted a “deficiency of service” under the Consumer Protection Act, 1986.
Whether, in the absence of deficiency of service, the complaint before the National Commission was maintainable and the Commission was justified in directing revised billing for the disputed period.

Arguments of the Parties

Electricity Board (Appellant)

Clause 13(d) vests an unqualified discretion in the Board to allow or refuse a reduction in contracted demand; the Board exercised this discretion by a speaking order rejecting the respondent’s request.
Because the Board acted strictly within contractual terms, no deficiency of service arose, rendering the consumer complaint non-maintainable before the National Commission.

Respondent (Consumer)

Relied on the National Commission’s observation that the Board later reduced the respondent’s demand from 168 KVA to 143 KVA w.e.f. 1-8-1987 and to 126 KVA w.e.f. 1-4-1988, arguing that similar reduction should have been granted earlier.
Contended that the Board’s subsequent reductions demonstrated the arbitrariness of the initial refusal.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court focused on the contractual clause 13(d), which unequivocally empowers the Board, “in its discretion,” to decide whether to permit a reduction in contracted demand. The Court found that the Board had considered the respondent’s request and issued a reasoned order declining it. Given this clear contractual authorization, the Court held that the respondent could not claim any legal grievance arising from the refusal. Consequently, there was no deficiency of service within the meaning of the Consumer Protection Act, and the National Commission lacked jurisdiction to grant relief. The later discretionary reductions granted by the Board were deemed situational and explicitly stated not to create a binding precedent.

Holding and Implications

Appeal Allowed; Impugned Direction Set Aside.

The Supreme Court annulled the National Commission’s directive to bill the respondent at 100 KVA for the period 23-5-1987 to 31-10-1987. The decision confirms that where a contract vests absolute discretion in a statutory authority, refusal to exercise that discretion in favour of a consumer does not constitute deficiency of service. The ruling affects only the parties to the dispute and establishes no broader precedent beyond reinforcing the primacy of contractual terms in determining consumer complaints.

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M.P Electricity Board And Another v. Manju Singh Chauhan (Mrs) Managing Director, Silencers India (P) Ltd. .

Order

1. The respondent had contracted with the Madhya Pradesh State Electricity Board for the supply of 168 KVA electricity load through an agreement in writing which, inter alia, stipulated that on the request of the consumer, namely, the respondent, the load could be reduced.

2. On 23-3-1987, the respondent requested the Board for reduction of the maximum contracted load from 168 KVA to 100 KVA. This request was rejected by the appellants by their letter dated 23-5-1987 on the basis of clause 13(d) of the agreement. The respondent then approached the National Consumer Disputes Redressal Commission for damages to the tune of Rs 20.05 lakhs. The claim was contested by the Board which also raised the question of maintainability of the claim petition on the ground that there being a contract in writing between the parties and the discretion having been left to the Board to reduce or not to reduce the load, there was no “deficiency of service” and the claim petition was not maintainable.

3. The National Commission by the impugned judgment, while disallowing the claim of the respondent for compensation, directed that the Board would bill the respondent from 23-5-1987 to 31-10-1987 on the basis of the maximum power demand of 100 KVA instead of 168 KVA. It is this direction which is challenged before us in this appeal.

4. Mr G.L Sanghi, learned Senior Counsel appearing on behalf of the Electricity Board has invited our attention to clause 13(d) of the agreement which is to the following effect:

“13. (d) On being satisfied that for certain compelling reasons the consumer is not or will not be in a position to consume electricity sufficient to have maximum demand equal to his contract demand, the Board may in its discretion allow the consumer, when request in writing is received in this regard, to reduce his contract demand to such extent and from such date as the Board may decide. Such reduction in the contract demand will be allowed not more than once during the period the agreement remains in force, but it shall not affect the consumer's liability to pay the amount of the minimum guarantee mentioned in clause 21(a) hereof.”

5. He contended that in view of the discretion left to the Board under the aforesaid clause, it was open to the Board either to allow or refuse the request of the respondent for reduction of the load. It is contended that the Board considered the request of the respondent and then by a speaking order rejected the request. This was done wholly in accordance with the terms of the contract and, therefore, there was no “deficiency in service” as contemplated by the Consumer Protection Act, 1986 and consequently, the claim petition before the National Commission was not maintainable.

6. The contention raised by Mr Sanghi is fully borne out by clause 13(d) of the agreement which gives an unqualified discretion to the Board to take its own independent decision whether it would allow a reduction in the sanctioned load agreed in writing to be supplied to the consumer. Once the Board, on a consideration of the relevant material, took the decision not to reduce the load, the consumer (respondent) cannot legally raise a grievance.

7. Our attention was invited by the learned counsel for the respondent to the following observation of the National Commission:

“On 14-7-1988, the opposite party (Electricity Board) while reiterating that the request for reduction of contract demand was not found feasible as being justified by compelling reasons, however, as a special case, reduction in the contract demand was permitted from 168 KVA to 143 KVA w.e.f 1-8-1987 and to 126 KVA w.e.f 1-4-1988. The contract demand was scaled down retrospectively and in the additional submissions of 5-9-1991 the respondent has explained that this was done in the light of the decisions taken by the M.P Electricity Board on the representation of the Federation of M.P Chambers of Commerce and Industry.”

8. It is contended that the Board itself, after taking into consideration the circumstances, had reduced the load from 168 KVA to 143 KVA with effect from 1-8-1987 and again to 126 KVA with effect from 1-4-1988. It is contended that if the load could be reduced by the Board for the period indicated above, there was no reason why it could not have been reduced on the request of the respondent for the period in question. It was pointed out to the Commission that the reduction in the contracted load was done in the light of the decision taken by the Board on the representation of the Federation of M.P Chambers of Commerce and Industry. They had given sufficient reason for the reduction granted to the respondent on the earlier occasion and that it could not be treated as a binding precedent.

9. We are firmly of the view that the action of the Board in refusing the reduction of the load from 168 KVA to 100 KVA as requested by the respondent was wholly in consonance with the terms of the agreement between the parties. That being so, there was no deficiency of service involved in this case and the claim petition was not maintainable before the National Commission under the Act.

10. For the reasons stated above, the appeal is allowed. The impugned direction given by the National Commission for billing the respondent for the period from 23-5-1987 to 31-10-1987 for 100 KVA is set aside. There will be no order as to costs.

M.P Electricity Boar... v. Manju Singh Chauhan ...