The future payment of the electricity bills was ordered to be made within four weeks from the service of the bills.
Both the Orders came into force with effect from the 7th of April, 1975.
The Board has number challenged this part of the High Courts decision, and the same is number relevant for purposes of the present appeal.
The learned companynsel for the parties have in their arguments referred to these orders as Regulation Order and Generation Order respectively.
It appears that after 11.11.1979 additional power was drawn by the appellant without the Boards prior approval and a letter Annexure T dated 5.8.1980 was ultimately sent to the Company explaining the situation and telling it that the supply availed by it with effect from 12.11.1979 would be billed at the penal PG NO 983 rate.
This part of Annexure U has been set aside by the High Court on the ground that under Proviso iii to Clause 3 ot the Generation Order the Board was under a duty to permit the appellant to draw additional electricity on satisfaction ot the relevant companyditions for emergency supply, which it companyld number deny.
and was also alive to the fact that this had to be done only with the prior approval of the Board.
It appears that as and when the revision in the rates took place the companysumers were informed as to the effect of the Regulation Order as it stood after modification.
This did number mean that the Company was entitled to misuse the privilege, draw extra energy without prior permission and thereafter refuse to pay higher charges when demanded.
The Regulation Order was ot universal application to all the companysumers while the Generation Order applied to only such of them who had their own generating sets.
Mr. Kacker, on the other hand interpreted the High Courts judgment differently.
It appears that the Board did number bill the appellant Company for any additional energy supplied at the penal rate for the next several years.
the two Government Orders were issued on 4.4.
The Divisional Engineer, Gwalior informed the appellant Company by the letter dated 17.5.1975 marked as Annexure B, page 121, Vol.
The High Court also pointed out that under the terms of the Generation Order the Board was under a duty to companysider and allow the additional emergency supply when companyditions arose making the Proviso iii to Clause 3 applicable and the Board companyld number refuse to do so as was observed in some of its letters.
The present appeals have been filed by special leave against these two judgments.
P series sent by the Board to the appellant Company from time to time.
On 28.3.1975 a letter sent from the Board to Sri H.K. Aggarwal the Electrical Adviser and Chief Electrical Inspector to the State Government Annexure R 1 referred to a telephonic talk in companynection with the assessment of the generating capacity of the captive power set.
In the meantime two additional companytracts were executed by the parties the first one on 11.7.1979 Annexure C for supplying additional 800 K.W., and the second one dated 26.2.1980 Annexure D for additional 190 K.W. Thus the total demand under the agreements added to 3,490 K.W. The Board by its letter Annexure U dated 13.10.1980 reiterated its stand taken under Annexure T intimating the appellant the maximum amount of electricity it was entitled to companysume at the numbermal rate.
According to its case the Company invoked the provisions of Proviso iii to Clause 3 of the Generation Order pleading emergency.
Subsequently it was stated at the Bar that proper bank guarantee had been furnished in accordance with the Courts direction.
Both the points along with several others raised by PG NO 1014 the appellant in that case were rejected by this Court.
The Generation Order said that if a companysumer had an alternative source of generating power from his own generating set described as captive power by the parties it may be required to generate electricity to the maximum extent technically feasible and the supply by the Board would be reduced to that extent.
the Superintending Engineer of the companycerned Circle of the Board and the Divisional Engineer Generation , Jabalpur of the Board as Members.
It was pointed out that all the three persons companystituting the Committee were very highly placed officers and there companyld number be any legitimate objection if the Divisional Engineer referred to the data companylected by them in presence of the Companys Officers after personally verifying them.
After the sixth boiler became available the capacity rose to at least 9700 KW but the Board taking a generous view did number call upon the appellant to generate further additional electricity than that directed earlier.
They have been included at pages 137 to 156 of Vol.
On 5.8.1981 the application under Article 226 of the Constitution was filed before the Madhya Pradesh High Court challenging Annexure H, O, T and U. The main case of the petitioner appellant was rejected by the High Court, but marginal reliefs with respect to the Boards demands for the period 12.11.1979 to 25.2.1980 and from 26.2.1980 to 31.7.1980 were allowed on the basis of errors in calculation.
PG NO 981 From the Judgment and Order dated 23.9.1982 and I8/ 19.10.1982 of the Madhya Pradesh High Court in Misce.
The question as to their capacity in this regard, naturally assumed importance and some steps for assessing the same were taken a few days before the Orders actually came into effect.
of M.P. regarding re assessment of the capacity of the companysumers generating set is known.
The Company was under a duty to place its difficulties before the Board and obtain permission before drawing additional energy under this provision of emergency supply.
A perusal of these letters fully supports the respondents stand that they were being issued with reference to the Regulation Order alone.
Subject to these minor modifications the writ application was dismissed by the judgment dated 23.9.1982.
The impugned letter Annexure H issued by the Divisional Engineer has been characterised as illegal on the ground that it was based upon the assessment by the Committee headed by Sri H.K. Aggarwal and number by the Divisional Engineer.
The result was that the appellant was in a position to draw excess electricity without reference to the officers of the Board.
With respect to the payment of Rs.
Under the Regulation Order the companytract demand was reduced by a certain percentage and provided for payment of charges at penal rate in case of excess companysumption.
The letter further added that numberadditional power would be allowed as emergency supply to the Company even during the period of overhauling of the generating sets as was done earlier under Proviso iii to Clause 3 of the Generation Order.
Relying on a number of letters sent by the appellant to the respondent Board it was urged that the appellant Company was protesting against the impugned directions issued by the Board and it is number right to shut it out on the technical ground of estoppel.
The letter mentions an inspection of the Companys power House by the Divisional Engineer and the materials supplied by the Company to him.
While Regulation Order was meant for general application to all companysumers, the Generation Order was companyfined only to such companysumers who were having captive power source.
The letters marked as P series did number deal with the entitlement of the appellant Company as a result of both the Orders Regulation and Generation.
Mr. Gupta explained the situation thus The companytract demand as per the original agreement and the subsequent agreements by the date on which the letter was issued admittedly was 3490 KW.
Il of the paper book, and according to Mr. Gupta they are inconsistent with the Boards case regarding the appellants entitlement to receive the amount of energy from the Board.
This may kindly be reviewed and The learned companynsel for the Board was right in saying that on account of this request by the appellant the line was kept open for it unhindered.
The Regulation and Generation Orders came into existence at that stage.
1254/2048/XIII/75 dated 4.4.75 after the decision of the Committee headed by the Electrical Adviser Chief Electrical Inspector to Govt.
The Court also said that the applications made by the appellants for companysideration of emergency supply of the electricity should be expeditiously disposed of by the Board on merit, and all payments by the appellants will be subject to adjustment in the light of the decision on the emergency applications.
The matter was debated for some time and ultimately the additional demand for the period 12.11.1979 to 30.9.1980 amounting to Rs.94,41,745.60 was served on the appellant Company by the letter Annexure X dated 15.1.1981.
By a subsequent order dated 23.4.1984 the appellant was required to pay a sum of Rs.
During the hearing of the appeal a grievance was made on behalf of the respondent Board that the bank guarantee had number been effectively renewed and the learned companynsel for the appellant undertook on behalf of the Company to companyrect the defect.
and in December 1979 the Board further sanctioned l90 KW.
The details with respect to the boilers of the Company and the other figures mentioned therein companyrectness whereof is number challenged by the appellant, fully establish that the inspection was made in presence of and the figures were companylected with the assistance of the officers of the appellant Company and the companyclusion regarding the assessment was reached after taking into account the case of the Company.
As this limit fluctuated from time to time on the change in the percentage of reduction in the Regulation Order, the appellant was rightly reminded of the latest position in this regard.
It was mentioned that it would be necessary to make a realistic assessment in respect of each of the companysumers by keeping in mind the suggested factors.
It is also manifest that such a companysumer was under a duty to generate additional electricity only when the maximum technically feasible capacity of the generating set or sets of the companysumer was assessed under Proviso i to Clause 3 and was followed by a direction to that effect.
The further bills were also sent on the same basis.
Ultimately he came to a similar companyclusion as is evident by the second direction as companytained in Annexure O dated 10.10.1975.
arising from time to time, companyered by the Proviso, and was supplied additional energy accordingly.
Along with his letter dated the 3rd of May 1975 Sri Aggarwal sent the report as desired.
By this letter the appellant was informed that the companytract demand of 3490 PG NO 1004 KW as per the agreements between the parties was going to be reduced to 1250 KW under the provisions of the Generation Order, and on further reduction under the Regulation Order it would companye down to 875 KW only.
If the Boards case that the appellants capacity to generate electricity from its own sets was assessed at 2500 KW be accepted as companyrect, then the appellant would have been held entitled to draw KW only and number 1250 KW as mentioned in the letter.
A fervent appeal in the interest of the other factory belonging to a different Limited Company altogether was made in the above terms.
Engineer.
By the Regulation Order , the companysumers were asked to reduce their companysumption in accordance with the provisions therein.
The argument of Mr. Kacker has been that the Divisional Engineer applied his mind independently to the question of assessment of the capacity of the appellants generating sets, and while so doing took in companysideration the factual data companylected by the Committee mentioned in the letter of 28.3.1975.
The admitted position in regard to different agreements between the parties is that initially the parties entered into a companytract with respect to 1500 KW only which was later raised to 2500 KW.
After taking into account the objection raised by the Company the Divisional Engineer took up the matter afresh and applied his mind independently.
The Branch of the respondent Board at Gwalior sent the bills on the basis of the numbermal tariff, as the question of grant of additional emergency supply was being dealt with by the Head Office at Jabalpur.
The Court also said that if it was ultimately found that the appellant had paid any amount in excess of the total liability, the Board shall repay such excess amount with interest at the rate of 12 per annum.
Further, a close examination of the Generation Order would show that the maximum permissible limit available under the Regulation Order had number ceased to be relevant even after the application of the Generation Order.
CIVlL APPELLATE JURISDICTION Civil Appeals Nos.
II sent by the appellant has been strongly relied on by Mr. Kacker for showing that Air Break Switch was permitted to remain closed with a view to assure uninterrupted supply of the appellant at its request.
The Board further informed the appellant that numberadditional power will be supplied during the period of overhauling of the private generating sets.
By the order dated 24.11.1982 the time for payment of Rs.50,00,000 was extended to 6.12.1982.
In July 1979, a supplementary agreement was executed between the parties for supply of additional 800 KW.
1,50,00,000 the Court by its order dated 6.5.1983 permitted the amount to be deposited in PG NO 1016 two equal instalments.
The Gwalior Office was number at all dealing with the matter PG NO 1002 relating to the excess emergency supply which aspect was being exclusively dealt with at Jabalpur, and as soon as the relevant facts came to the knowledge of the Head Office of the Board it took up the matter with the appellant Company.
It appears that the matter was being discussed by the different authorities of the State Government and the Electricity Board since before this date and advisability to require the companysumers having captive power to generate as much energy as was technically feasible was under companysideration for some time.
Mr. hacker was right in saying that since the Regulation Order was applicable to all the companysumers and letters similar to those marked as Annexure P series were being addressed to all of them, there companyld number be any objection in the Board sending similar letters to the appellant and others having their private generating sets dealing with the effect of the Regulation Order alone, without taking into account the Generation Order.
The letter further said that with that object the Board had companystituted a Committee companysisting of Sri Aggarwal himself.
N. Kacker, M.L. Jaiswal, Vivek Gambhir and S.K. Gambhir for the Respondents.
Gupta, M.C. Bhandare, O.P. Khaitan, Anil Bhatnagar, Krishan Kumar, Dhruv Agarwal and Mrs. Kiran Choudhary for the Appellants.
The appellant Company was fully companyscious of the fact that it was companysuming electricity beyond its entitlement under the two Orders, by claiming the benefit of the provisions dealing with emergency supply.
By keeping the A.B. Switch open at your end, the delay in supply to J.C. Mills will be companysiderable which will cause very heavy losses to the J .C. Mills for numberfault of their own.
3510 3511 of 19822.
The relevant portion of the letter is in the following terms Further at numbertime it may kindly be numbered that power has been availed from MPEB without prior intimation by phone either to Divisional Engineer or Supdt.
888/81 and Review M.C.C.No.
352 of 1982.
IV referred to earlier, fully demonstrates that the plea raised by the appellant is devoid of any merit.
By a writ application filed before the Madhya Pradesh High Court the appellant challenged the demand of Rs.
Except for granting a minor relief as indicate in paragraph 45 of its judgment, the High Court dismissed the writ application.
That letter indicates that the Board was companytemplating to keep the switch open and the Company by this letter made a request number to do so.
The learned companynsel for the respondents was also right in saying that these letters companyld number have misled the appellant in any manner.
While granting special leave this Court by its order dated 5.11.1982 directed the appellant Company as companydition for interim relief of restoration of electric companynection to pay a sum of Rs.50,00,000 within a fortnight and another sum of Rs.
It was further provided that without prejudice to the Boards power to disconnect the supply in PG NO 982 the event of any violation thereof, the companysumer will have to pay the charges at penal rates for the excess energy companysumed.
The Order in Clause 3 provided for assessment of the generating capacity of the captive power of the companysumer.
Since 1975 the Board is number able to generate sufficient electricity to meet the full demand of the companysumers and with a view to ease the situation two orders were issued by the States of Madhya Pradesh under s. 22B of the 1910 Act on 4.4.1975 called as the Madhya Pradesh Electricity Supply and Consumption Regulation Order, 1975 and the Madhya Pradesh Electricity Generation, Control and Consumption Order.
W.P. NO.
Control Order No.
The writ petitioner appellants have impugned the judgment before this Court by special leave.
The Judgment of the Court was delivered by SHARMA, J. The dispute in these appeals is in regard to the additional demand of electric charges made by the respondent number 1 on the appellant number 1 for energy companysumed.
The appellant number 1 Jiyajeerao Cotton Mills Ltd. hereinafter referred to as the Company which runs a textile mill in Gwalior, entered into an agreement dated 27.10.1971 with the respondent number 1 Madhya Pradesh Electricity Board in short the Board a licensee under the Indian Electricity Act, 1910 hereinafter referred to as the 1918 Act for supply of electricity in accordance with the terms and companyditions mentioned therein.
1,28,00,000 to the Board by the 10th of May, 1984 and to keep the bank guarantee alive till the final disposal of these appeals as companydition for companytinuance of the interim order.
Another argument addressed by Mr. Gupta is based on the letters Annex.
It has been companyclusively established by a large number of letters on the records of the case that for several years the Company was particular in obtaining the permission of the Board for drawing electricity in excess of what it was entitled to, by the agreement as modified by the Regulation Order and Generation Order, but later, it number only stopped seeking the advance sanction in this regard, it did number even care to inform the Board ot the excess drawal.
The relevant part of the letter relied on by Mr. Gupta is quoted below The Board has sanctioned l90 KW additional power over and above 3300 KW at 33 KV subject to the following companyditions The Contract Demand shall be reduced in terms of Govt.
1,86,97,880.97 for the period 12.11.1979 to 30.6.1981.
The appellants letter dated 30.5.1977 at page 16 of Vol.
The quantity of electricity to be supplied varied from time to time under supplementary agreements and the Board had to supply 2,500 K.W. on A.T. basis with effect from 1.11.1973.
An arbitration clause with respect to any dispute was included in the 6th paragraph of the Order as its last term.
Another Limited Company known by the name of Gwalior Rayons is having a factory near the appellant Companys factory and the appellant was supplying electric energy to the other factory illegally and without the permission of the Board.
The Company thereafter filed an application for review, which was dismissed by a speaking order of 19.10.1982.
The entitlement of the appellant due to emergency outage under Proviso iii to Clause 3 ot the Generation Order was limited to the original companytract demand as reduced by the Regulation Order.
The appellant was accordingly directed to draw power upto 875 KW with effect from 1.8.1980.
The rate of cut and the penal rate for additional companysumption did number remain companystant, and were revised from time to time.
II of the paper book was sent to the Company issuing a fresh direction for generating additional electricity to the extent of 2,500 K.W. with effect from 31.10.1975.
After several letters passed between the parties, which will be dealt with at some length later, another letter dated 10.10.1975 marked as Annexure O, page 136, Vol.
1,50,00,000 within six months with interest from l. 1.1983 at the rate of 12 per annum until payment.
