Apple Valley Resort vs Himachal Pradesh State Electricity Board and Another

Rajiv Sharma, J.—The brief facts necessary for the disposal of this writ petition are that the petitioner-company (hereinafter referred to as ''the company'' for convenience sake) submitted application to the respondent-Board for sanctioning 198-120 KW load. The same was sanctioned by the competent authority. Consequently, an estimate amounting to Rs. 1,57,480/- was prepared by the Board. The company was required to deposit the amount with the respondent-Board. The company deposited the cost of estimate in two installments of Rs. 82,900/- and 75,000/- on 16-3-1991 and 9-4-1991. The Board incurred a sum of Rs. 82,699/- towards providing three phase electrical facility to the company due to non-availability of new transformer. The Board did not refund a sum of Rs. 75,383/-. The company sent a letter to the Executive Engineer of the Board on 7-1-1994 claiming refund of Rs. 75,383/''. The same request was repeated on 17th May, 1995 and 5th December, 1995. The respondent-Board issued a bill No. 223085 dated 30-11-1995 to the company calling upon it to deposit a sum of Rs. 1,77,337.80 paise by due date i.e. 23-12-1995 (Annexure P-6). The company addressed a letter dated 23-12-1995 to the Assistant Engineer of the respondent-Board requesting the authorities to assign the reasons for issuance of bill and had also requested in the meantime to pay the bills by way of installments under protest. In fact, the company had already paid installments of Rs. 12,725.30 paise per month with effect from December, 1995 to April, 1996. The company was apprised by the Board on 4th January, 1996 that the bill has been raised vide Annexure P-6 on the basis of the inspection carried out by the Executive Engineer in the premises during February, 1993 whereby the metering equipment was found recording 1 /3rd of the actual consumption and consequently the account has been overhauled with effect from September, 1992 to February, 1993 and an amount of Rs. 1,52,704/-(SOP) and Rs. 9,589/- (ED) has been charged during the month of December, 1995. The Board has filed a detailed reply to the writ petition. The sum and substance of the reply of the Board is that the amount of Rs. 75,383/- could not be refunded to the petitioner since new transformer was to be installed. The reasons assigned for issuance of Annexure P-6 is that the metering equipment of the company was found faulty and it was recording 1 /3rd of the actual consumption.

Mr. R.L. Sood, Senior Advocate had strenuously argued that the respondent-Board could not retain a sum of Rs. 75,383/- deposited by the company for the installation of transformer. He also argued that the issuance of Annexure P-6 is bad in law.

Mr. Baldev Singh, Advocate had supported the retention of money by the respondent-Board as well as issuance of Annexure P-6 by the respondent-Board.

I have heard the learned Counsel for the parties and have also perused the pleadings of the parties.

It is not disputed by the parties that the company had submitted application for installation of three phase electricity connection. The same was sanctioned and the company was directed to deposit the necessary amount. The company deposited a sum of Rs. 82,900/- on 16-3-1991 and Rs. 75,000/- on 9-4-1991. The total expenditure incurred by the Board for the installation of the transformer was Rs. 82.699/-. Mr. R.L. Sood, had submitted that new transformer was never installed in the premises of the company. The company had deposited two installments of Rs. 82,900/- and 75,000/- for the installation of the new transformer. The total expenditure incurred by the Board of Rs. 82,699/-. The Board could not retain a sum of Rs. 75,383/- since it has failed to provide new transformer in the premises of the company. The stand taken by the Board for not refunding the amount only on the pretext that it has been retained for the purpose of installation of new transformer is unjust and unfair besides being arbitrary. In all fairness, the respondent-Board being a State within the meaning of Article 12 of the Constitution of India should have refunded the amount to the petitioner-company with interest. The decision of the Board to retain a sum of Rs. 75,383/- is declared bad in law.

Now, the Court has to advert to the second submission whether the issuance of Annexure P-6 is in accordance with law or not. There is a detailed procedure prescribed u/s 26 of the Indian Electricity Act, 1910. Sub-section (6) of Section 26 of the Act, reads thus:

26(6) Where any difference or dispute arises as to whether any meter referred to in Sub-section (1) is or is not correct, the matter shall be decided, upon the application of either party, by an Electrical Inspector, and where the meter has, in the opinion of such Inspector ceased to be correct, such Inspector shall estimate the amount of the energy supplied to the consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct; but save as aforesaid, the register of the meter shall, in the absence of fraud, be conclusive proof of such amount or quantity:

Provided that before either a licensee or a consumer applies to the Electrical Inspector under this sub-section, he shall give to the other party not less than seven days I notice of his intention so to do.

It is evident from the language of Sub-section (6) of Section 26 of the Indian Electricity Act, 1910 that where any difference or dispute arises as to whether any meter is or is not correct, the matter is required to be decided, upon the application by either party, by an Electrical Inspector. The reasons assigned by the Board for the issuance of the bill vide Annexure P-6, is that the meter installed in the premises of the company was faulty as it was recording 1 /3rd of the actual consumption.

The Board itself could not decide the matter. The matter was required to be decided by moving the appropriate authority i.e. Electrical Inspector. The Board in addition to referring the matter to the Electrical Inspector under Sub-section (6) of Section 26 could also take simultaneously re-coupe to Sub-section (7) of Section 26.

It is evident from the report Annexure RA/1 filed by the respondent Board that the meter was faulty since it was not recording the correct consumption. The Board on the basis of this report has decided to raise bill (Annexure P-6) amounting to Rs. 1,77,337.80 paise. The procedure adopted by the Board is contrary to the mandatory provisions of Sub-section (6) of Section 26 of the Indian Electricity Act, 1910.

Their Lordships of the Hon''ble Supreme Court in Madhya Pradesh Electricity Board and Others Vs. Smt. Basantibai, have held as under:

It is evident from the provisions of this section that a dispute as to whether any meter referred to in Sub-section (11 is or is not correct has to be decided by the Electrical Inspector upon application made by either of the parties. It is for the Inspector to determine whether the meter is correct or not and in case the Inspector is of the opinion that the meter is not correct he shall estimate the amount of energy supplied to the consumer or the electrical quantity contained in the supply during a period not exceeding six months and direct the consumer to pay the same. If there is an allegation of fraud committed by the consumer in tampering with the meter or manipulating the supply line or breaking the body seal of the meter resulting in not registering the amount of energy supplied to the consumer or the electrical quantity contained in the supply, such a dispute does not fall within the purview of Sub-section (6) of Section 26. Such a dispute regarding the commission of fraud in tampering with the meter and breaking the body seal is outside the ambit of Section 26(6) of the said Act. An Electrical Inspector has, therefore, no jurisdiction to decide such cases of fraud. It is only the dispute as to whether the meter is/is not correct or it is inherently defective or faulty not recording correctly the electricity consumed, can be decided by the Electrical Inspector under the provisions of the said Act.

In the instant case it appears from the report of the Assistant Engineer of the State Electricity Board that one phase of the meter was not working at all, so there is undoubtedly a dispute as to whether the meter in question is a correct one or a faulty meter and this dispute has to be decided by the Electrical Inspector whose decision will be final. It is also evident from the said provision that till the decision is made no supplementary bill can be prepared by the Board estimating the energy supplied to the consumer, as the Board is not empowered to do so by the said Act. It is pertinent to refer in this connection to the observations made in the case of Gadag Betgiri, Municipal Borough, Gadag v. Electrical Inspector, Govt. Electrical Inspectorate, Govt. of Mysore AIR 1962 Mys 209 as follows:

What the Inspector may decide under Sub-section (6) is whether or not the readings obtainable from the meter are accurate and whether the meter is faulty or mechanically defective, producing erroneous readings. That is the limited adjudication which in my opinion, an Inspector or other authority functioning under Sub-section (6) may make under its provisions....

In my opinion, the legislative intent underlying Section 26(6) of the Act is similar. The only question into which the Inspector or other authority functioning under that sub-section might investigate is, whether the meter is a false meter capable of improper use or whether it registers correctly and accurately the quantity of electrical energy passing through it. If in that sense, the meter installed by respondent 2 this case was a correct meter as it undoubtedly was and as it has been admitted to be, the fact that respondent 2, even if what the petitioner states is true, so manipulated the supply lines that more energy than what was consumed by the petitioner was allowed to pass through the meter would not render the meter which was otherwise correct an incorrect meter.

In view of the observations made hereinabove and the definitive law laid down by the Hon''ble Supreme Court it is held that the issuance of Annexure-P-6 is illegal. Similarly, the decision of the respondent-Board to retain a sum of Rs. 75,383/- is arbitrary.

Consequently, the writ petition is allowed. Annexure P-6 is quashed and set aside. The respondent-Board is directed to refund to the petitioner-company a sum of Rs. 75,383/- with interest @ 9% per annum with effect from 9-4-1991 till its realization. The amount deposited by the petitioner-company pursuant to the issuance of Annexure P-6 will either be refunded to the petitioner with interest @ 9% or the same will be adjusted in future bills. The amount will be refunded to the petitioner within a period of 8 weeks from today. There shall be no order as to costs.