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Chhotey Lal v. State Electricity Board, U.P, Lucknow And Others
Structured Summary of the Opinion
Factual and Procedural Background
The petitioner, Chhotey Lal, challenged the validity of recovery proceedings initiated against him for electricity dues treated as arrears of land revenue under S. 279(1)(b) read with S. 281 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (and the rules framed thereunder). The U.P. State Electricity Board (opposite party No. 1) entered into an agreement with the petitioner on 29 November 1966 to provide an industrial electricity connection for a guaranteed period of five years; supply began on 27 January 1967. In August 1976 the opposite parties sought to recover certain electricity dues from the petitioner as arrears of land revenue. The petitioner filed a writ petition under Article 226 of the Constitution challenging those recovery proceedings. The court heard counsel, examined the agreement and statutory provisions, and dismissed the petition.
Legal Issues Presented
- Whether recovery of electricity dues as arrears of land revenue under S. 279(1)(b) read with S. 281 of the U.P. Z.A. & L.R. Act and the rules was valid in the circumstances of this case.
- Whether a notice under S. 3 of the U.P. Government Electricity Undertaking (Dues Recovery) Act, 1958 was served on the petitioner before issuance of a recovery certificate under S. 5.
- Whether the modes of recovery prescribed in S. 279 of the U.P. Z.A. & L.R. Act (including arrest and detention under clause (b) and attachment/sale under clause (f)) apply to "sums of money recoverable as arrears of land revenue" in addition to arrears of land revenue proper.
- Whether recourse to arrest and detention under clause (b) of S. 279(1) can be taken without proof that the defaulter possesses sufficient means to discharge the liability, and what standard governs the exercise of detention.
Arguments of the Parties
Petitioner's Arguments
- The electricity connection was disconnected in June 1973 and no electricity was supplied thereafter, so no amount could lawfully be recovered as electricity dues for later periods.
- The petitioner transferred his mill and requested the Board to finally settle the account after disconnection (relied on letters dated 4-4-1975 and 13-6-1975).
- The recovery certificate issued under S. 5 of the U.P. Government Electricity Undertaking (Dues Recovery) Act, 1958 was invalid because no notice under S. 3 was served on the petitioner.
- The modes of recovery under S. 279 relate only to land revenue proper and not to other sums recoverable as arrears of land revenue; thus arrest/detention under Ss. 279(1)(b) and 281 was not available for recovery of such sums. In particular, recourse to clause (b) could be taken only if it was proved the petitioner did not possess sufficient movable and immovable property and other means to discharge the liability.
Opposite Parties' Arguments
- The power supply to the petitioner was not discontinued after June 1973 as claimed, and no request from the petitioner for terminating the agreement was received by the Board; even assuming such a request was received, under the agreement the petitioner was liable to pay minimum charges up to 26 January 1976.
- A notice under S. 3 of the U.P. Government Electricity Undertaking (Dues Recovery) Act, 1958 was sent to the petitioner by registered post on 12-12-1975, and Explanation 1 to S. 3 deems sending by registered post to be sufficient notice; therefore issuance of a recovery certificate under S. 5 was properly preceded by the required notice.
- The modes of recovery under S. 279 apply to sums of money recoverable as arrears of land revenue and are not confined to land revenue strictly; S. 286 contains a specific distinction but does not negate the availability of S. 279 modes for sums recoverable as arrears.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Ram Narayan Agarwal v. State of U.P., (1983) 4 SCC 276 : AIR 1984 SC 1213 | The requirement that, before ordering detention under the land-revenue recovery provisions, the officer must inquire whether detention would be productive of payment of the arrear or a substantial portion of it; detention should be ordered only when satisfied it will compel payment. | The court relied on this decision to support its view that recourse to arrest and detention under Clause (b) of S. 279(1) is permissible only if there is reason to believe detention will compel payment (and thus effectively only where the defaulter possesses sufficient means to discharge the liability). The Supreme Court's formulation was used to interpret the duty of the officer to decide on available material and evidence before ordering detention. |
Court's Reasoning and Analysis
The court proceeded by first examining the written agreement dated 29 November 1966, particularly Clauses 4 and 9. It noted the contractually agreed guaranteed minimum charges for a five-year period and an ongoing obligation to pay minimum charges on a yearly basis thereafter until the contract was validly determined by the consumer by written notice (with special provisions if supply ceased during the course of a year).
Applying those contractual terms, the court concluded that the petitioner was obliged to pay minimum charges up to 26 January 1976. The petitioner’s contention that supply ceased in June 1973 and that he had requested permanent disconnection by letters of 4-4-1975 and 13-6-1975 did not relieve him of liability under the agreement. The court also noted that, according to paragraph 9 of the counter-affidavit (not denied in the rejoinder), the amount sought related to the period up to September 1975, which is within the period for which the agreement required minimum payments.
On the procedural point under the U.P. Government Electricity Undertaking (Dues Recovery) Act, 1958, the court accepted the opposite parties' statement (in paragraph 21 of the counter-affidavit and not denied) that a notice under S. 3 was sent by registered post on 12-12-1975. The court relied on Explanation 1 of S. 3, which deems sending notice by registered post to be sufficient notice, and therefore rejected the petitioner's contention that a recovery certificate under S. 5 was issued without prior demand notice.
Addressing the contention about the applicability of S. 279 (modes of recovery) to "sums of money recoverable as arrears of land revenue," the court analyzed the statutory scheme: S. 279 lists seven modes of recovery, and Ss. 280–286A set out the procedures for each mode. The court found that Ss. 279–285 and the rules make no general distinction between land revenue and sums recoverable as arrears of land revenue; a specific distinction appears only in S. 286. The court interpreted S. 286(1) and (2) as distinguishing situations where arrears of land revenue must first be attempted to be recovered by Clauses (a)–(e) before attaching other immovable property (S. 286(1)), while S. 286(2) allows recovery of sums recoverable as arrears of land revenue from other immovable property without that restriction. From this reading the court concluded that the modes in S. 279 (including arrest/detention and attachment/sale) are available for recovery of sums recoverable as arrears of land revenue, and rejected the petitioner's narrower reading.
Concerning the use of arrest and detention under Clause (b) of S. 279(1), the court considered the legislative intent and procedural safeguards. It referred to Clause (2) of S. 251, which requires that after arrest the defaulter be brought before the issuing officer and not detained unless there is reason to believe detention will compel payment of the whole or a substantial portion of the arrear. The court held that recourse to detention can be taken only where the person possesses sufficient means to discharge the liability and where detention is likely to produce payment. The court relied on the Supreme Court decision in Ram Narayan Agarwal for the requirement that the officer must decide (on available material and any evidence from the defaulter) whether detention is justified because it will compel payment; if not so satisfied, detention must not be ordered.
Holding and Implications
HOLDING: The writ petition fails and is DISMISSED WITH COSTS.
Direct Consequences for the Parties
- The court upheld the validity of the recovery proceedings in the circumstances described: under the terms of the agreement the petitioner remained liable to pay minimum guaranteed charges up to 26 January 1976, and the amounts sought related to periods (up to September 1975) within that liability period.
- The court accepted that a notice under S. 3 of the U.P. Government Electricity Undertaking (Dues Recovery) Act, 1958 was sent by registered post on 12-12-1975 and, under Explanation 1 of that section, deemed sufficient; therefore the subsequent recovery certificate under S. 5 was not invalid for want of service of the demand notice.
- The court held that modes of recovery listed in S. 279 apply to sums recoverable as arrears of land revenue (subject to the specific distinction in S. 286) and that arrest/detention under Clause (b) may be used only where detention is likely to compel payment (i.e., ordinarily where the person possesses sufficient means to discharge the liability), consistent with the Supreme Court authority cited.
Broader Implications
The opinion applies existing statutory interpretation principles to hold that the recovery modes in S. 279 are generally available for sums recoverable as arrears of land revenue (with S. 286 containing particular qualifications) and reiterates the safeguard that detention should be ordered only when it is likely to compel payment. The opinion does not purport to establish a new precedent beyond applying the cited Supreme Court authority and statutory scheme to the facts; no broader or novel legal principle was announced beyond the court's application of the statutes and the Supreme Court decision to the case at hand.
Disposition: Petition dismissed (with costs).
J.N Dubey, J.:— By means of this writ petition petitioner Chhotey Lal has challenged the validity of recovery proceedings initiated against him for recovery of electricity dues as arrears of land revenue under S. 279(1)(b) read with S. 281 of the U.P.Z.A and L.R Act of 1950 and rules framed thereunder (hereinafter referred to as the Act and Rules).
2. The opposite party No. 1, U.P State Electricity Board entered into an agreement with the petitioner Chhotey Lal on 29th November, 1966 under which it was to provide an industrial connection to him for running his flour and rice mill etc. for a guaranteed period of five years. It installed the necessary connection in the premises of the petitioner and started supplying the electricity to him with effect from 27th January, 1967. In August, 1976 opposite parties sought to recover some electricity dues from the petitioner as arrears of land revenue. Feeling aggrieved the petitioner has approached this Court for relief under Art. 226 of the Constitution. We have heard learned counsel for the parties and have perused the record.
3. Learned counsel for the petitioner contended that the electricity connection of the petitioner was disconnected in June, 1973 and thereafter no electricity was supplied to him. Later on he transferred his mill and requested the opposite party No. 2 for setting the account finally after disconnecting the connection. In these circumstances no amount could be legally recovered from him as electricity dues. On the other hand, learned counsel for the opposite parties contended that neither the power supplied to the petitioner was discontinued after June, 1973 as claimed by him nor any request from him for terminating the agreement was received by the opposite party No. 2. But even assuming that such request was received by the opposite party No. 2 under the terms of the agreement the petitioner was liable to pay minimum charges up to 26th January, 1976.
4. In order to appreciate the argument of the learned counsel for the petitioner, it is necessary to have a look to the terms of the agreement dated 29th November, 1966. Clauses 4 and 9 of the agreement read thus:—
“4(1) The consumer shall pay for all the electrical energy supplied at the rates and in accordance with the rent terms in force for the time being and the signing of this agreement shall be held to imply the consumers concurrence to the terms and the rate in force for the time being and in any subsequent modifications or alteration thereof.
(2) A fixed charge of Rs. 1.62 per month will be levied upon the consumer each month in addition to the charge for electricity consumed.
(3) Provided, nevertheless that if in any year commencing, from the first day of the month of April following the date on which the supply is made available by the Electricity Board the value of the energy supplied for industrial or agricultural purposes or both calculated at the rates aforesaid (excluding the discount forfeited, if any) shall fall, short of the guaranteed minimum as specified in item 4(b) of the said schedule the consumer shall pay the full guaranteed minimum amount as specified therein. The Executive Engineer, Hydro Electric Division, Varanasi on behalf of the Chairman shall have the right to disconnect and remove the line service connection and meters, if the consumer fails to pay the deficiency in the guaranteed minimum payments within one month of the receipt of a bill from the Electricity Board calling upon him to pay the said deficiency, provided that the disconnection or removal of the line or both, under this clause or under any clause of this agreement, such as for non-payment of electrical dues or any other dues of the Electricity Board or the like shall not absolve the consumer from his liability of paying to the Electricity Board the minimum charges for the whole period of five years……………….
(a), (b), (c) & (4) …………………”
“9(1) The consumer shall not be at liberty, save with the consent of the Electricity Board to determine this Agreement before the expiration of five years from the first day of April following the date of commencement of the supply hereunder and the Electricity Board may give its consent subject to the condition that the consumer pays the minimum guaranteed charges for five years or damages stipulated in Clause 4(3) herein. The consumer may determine this Agreement at any time after the said period subject to sub-clause (2) herein on giving to the Electricity Board not less than thirty days notice in writing in that behalf and upon the expiration of the period of such notice this Agreement will cease and determine save and except for the settlement of all accounts outstanding between the Electricity Board and the consumer and without prejudice to the rights or remedies (if any) which may have accrued to the Electricity Board hereunder in the meantime.
(2) After the expiry of the said minimum period of five years the consumer will not be bound to retain the connection. But if he does so the supply will be deemed to have been continued by the Electricity Board on a year to year basis on the terms and conditions herein contained unless and until the Electricity Board directs otherwise in writing in which case the consumer shall be bound by the direction so made in writing, provided that if the consumer ceases taking supply during the course of a year, after the expiry of the aforesaid five years, he shall be liable to pay the minimum guaranteed charges on yearly basis.
(3) & (4) ……………………………”
5. A plain reading of the aforesaid provisions of the agreement indicates that the petitioner had to pay minimum charges for the guaranteed period of five years and thereafter on yearly basis till the termination of the agreement by him by means of the written notice provided if taking of the supply was stopped during the course of the year he had to pay minimum charges for that entire year. This being so, the claim of the petitioner that no electricity was supplied after 1973 and that he had written to the opposite party No. 2 for disconnecting his connection permanently by his letter dated 4-4-1975 and 13-6-1975 is of no help to him. Under the terms of the agreement he has to pay minimum charges up to 26th January, 1976, while according to the allegations in paragraph 9 of the counter-affidavit which have not been denied in the rejoinder affidavit the amount sought to be recovered from him relates to the period up to September, 1975.
6. It is next contended by the learned counsel that the opposite party No. 3 was not legally justified in issuing recovery certificate to the opposite party No. 4 under S. 5 of the U.P Government Electricity Undertaking (Dues Recovery) Act, 1958, without serving a notice upon the petitioner under S. 3. In paragraph 21 of the counter-affidavit which has not been denied in the rejoinder affidavit the opposite parties have stated that necessary notice under S. 3 was sent to the petitioner per registered post on 12-12-1975. Explanation 1 of S. 3 provides that the sending of notice by registered post shall be deemed to be sufficient notice on the person concerned. This being so, once a notice under S. 3 was sent to the petitioner per registered post on 12-12-1975 the petitioner cannot claim that recovery certificate under S. 5 was issued against him without sending a notice of demand under S. 3 of the aforesaid Act. Thus this contention of the learned counsel for the petitioner has also no substance.
7. Learned counsel further contended that modes of recovery of land revenue contemplated under S. 279 of the Act relate to the recovery of land revenue only and not to other sums of money which are recoverable as land revenue. According to him such dues can be recovered as arrears of land revenue only by resorting to the mode prescribed under sub-section (2) of S. 266 of the Act and not by arrest and detention of the petitioner a mode prescribed under Ss. 279(1)(b) and 281 of the Act. The procedure for recovery of arrears of land revenue is to be found in S. 279(1)(b) and other cognate provisions in Chapter X of the Act Section 279 of the Act reads thus:—
“279. Procedure for recovery of an arrear of land revenue — (1) An arrear of land revenue may be recovered by any one or more of the following processes:
(a) by serving a writ of demand or a citation to appear on any defaulter,
(b) by arrest and detention of his person,
(c) by attachment and sale of his movable property including produce.
(d) by attachment of the holding in respect of which the arrear is due,
(e) by lease or sale of the holding in respect of which the arrear is due,
(f) by attachment and sale of other immovable property of the defaulter; and
(g) by appointing a receiver of any property, movable or immovable of the defaulter,
(2) The costs of any of the processes mentioned in sub-sec. (1) shall be added to be recoverable in the same manner as the arrears of land revenue.”
8. Section 279 provides seven modes for recovery of arrears of land revenue, while Ss. 280 to 286A provide procedure to be followed in case of each of seven modes. The procedure to be followed while taking recourse to the modes provided under Clauses (b) and (f) of sub-sec. (1) of S. 279 are contained in Sections 281 and 286 which read thus:
“281. Arrest and detention:— Any person who has defaulted in the payment of an arrear of land revenue may be arrested and detained in custody up to a period not exceeding 15 days unless the arrears including costs, if any, recoverable under sub-sec. (2) of Section 279, are sooner paid:
Provided that no woman or minor shall be liable to arrest or detention under this section.
Provided further that no person shall be liable to arrest or detention for an arrear in respect of a holding of which he is not the bhumidhar merely because of his joint responsibility for the payment of land revenue under Section 243.”
“286. Power to proceed against interest of defaulter in other immovable property—
(1) If any arrears of land revenue cannot be recovered by any of the processes mentioned in Clauses (a) to (e) of Section 279, the Collector may realise the same by attachment and sale of the interest of the defaulter in any other immovable property of the defaulter.
(2) Sums of money recoverable as arrears of any specified land, may be recovered by process under this section from any immovable property of the defaulter including any holding of which he is a bhumidhar or assami.
9. After going through the various provisions of the Act and the Rules we find that Ss. 279 to 285 and rules framed thereunder make no distinction between land revenue and sums of money recoverable as arrears of land revenue. It is only in S. 286 that a distinction has been drawn between arrears of land revenue and sums of money recoverable as arrears of land revenue. While sub-sec. (1) of S. 286 provides that if any arrears of land revenue cannot be recovered by the processes mentioned in Clauses (a) to (e) of sub-sec. (1) of S. 279 the same may be realised by attachment and sale of immovable property of the defaulter. Sub-sec. (2) of S. 286 provides that sums of money recoverable as arrears of land revenue, but not due in respect of any specified land, may be recovered by process under this section from any immovable property of the defaulter including any holding of which he is a bhumidhar or assami. In our opinion, the distinction between the two sub-clauses of S. 286 is that while under sub-sec. (1) which leals with the recovery of arrears of land avenue the dues can be realised by attachment and sale of the immovable property of the defaulter only if the same cannot be recovered by any of the processes mentioned in Clauses (a) to (e) of sub-sec. (i) of S. 279, there is no such restriction under sub-sec. (2) which deals with the recovery of sums of money recoverable as arrears of land revenue which means that for recovery of such dues recourse could be taken to the mode provided in Clause (f) of sub-sec. (1) of S. 279 irrespective of the fact that the same could be recovered by other processes mentioned in Clauses (a) to (e) of sub-sea (1) of that section. Hence we are unable to accept the contention of the learned counsel that the modes prescribed under S. 279 are not available for recovering the sums of money recoverable as arrears of land revenue and that such sums of money can be recovered only by the mode provided under sub-sec. (2) of S. 286. The arrears of land revenue and the sums of money recoverable as arrears of land revenue are kept at par under S. 279 and other cognate provisions of Chapter X of the Act except S. 286, which deals with the mode prescribed under Clause (f) of sub-sec. (1) of S. 279. Only because some distinction is made between the land revenue and the sums of money recoverable as arrears of land revenue under S. 286, it cannot be said that the other modes contained in S. 279 are not available for recovery of the sums which though not land revenue are recoverable as arrears of land revenue. Learned counsel lastly contended that recourse to the provisions of Clause (5) of sub-sec. (1) of S. 279 could be taken only if it was proved that the petitioner did not possess sufficient movable and immovable property and other means to discharge his liability. In our opinion this contention of the learned counsel is also without substance. The intention of the Legislature can be well inferred from Clause (2) of S. 251 which provides that after the arrest a defaulter shall be brought without delay before the officer, who issued the warrant and shall not be detained in custody unless there is reason to believe that the process of detention will compel the payment of the whole or substantial portion of the arrear. In our opinion recourse to the mode provided under Clause (b) of sub-sec. (1) of S. 279 for recovery of the arrear of land revenue can be taken only if a person possesses sufficient means to discharge the liability and not otherwise. Our this view finds support from the decision of the Supreme Court in Ram Narayan Agarwal v. State of U.P, reported in (1983) 4 SCC 276 : AIR 1984 SC 1213. The Supreme Court while interpreting the various provisions of the Act relating to the procedure for recovery of arrears of land revenue contained in Chapter X of the Act observed thus:
“Under this sub-rule there is necessity to enquire into the question whether the detention of the defaulter would be productive of payment of the arrear or a substantial portion thereof. The officer concerned is, therefore, required to decide on the basis of the material before him and any evidence tendered or submission made by the defaulter whether there is any justification for detaining him and it is only after he is satisfied that the detention of the defaulter will compel him to make the payment of the whole or a substantial part of the arrear he can order his detention. If he is not so satisfied the officer is under an obligation to release him.”
10. In the result, the writ petition fails and is dismissed with costs.
11. Petition dismissed.
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