Bhalotia Auto Products vs Jharkhand State Electricity Board and Others

R.R. Prasad, J.—19/.9.11. The Petitioner, a company registered under the Companies Act engaged in casting of automobile components for supply it to M/s. Telco Limited and other automobile industries was having connected load of 495 KVA. For manufacturing automobile components, the Petitioner does have casting furnace of about one tonne and hence, the Board directed the Petitioner to produce necessary documents and to execute agreement.

Instead of entering into an agreement with the Board, the Petitioner filed a writ application, vide C.W.J.C. No. 3585 of 1999 challenging the new tariff. The said writ application was dismissed on 16.1.2003. Thereupon, revised energy bill amounting to Rs. 1,62,79,009.00 was raised for the period from 09/99 to 04/2003 in HTSS tariff.

Thereupon the Petitioner preferred L.P.A No. 56 of 2003 against the order dated 16.1.2003 but the Petitioner did not succeed as the L.P.A was dismissed on 5.9.2003. Again revised bill amounting to Rs. 1,73,93,830/-was issued for the period from 9/99 to 8/2003 under HTSS tariff with contract demand of 600 KVA. The Petitioner instead of making payment of the amount, moved to the Hon''ble Supreme Court in S.L.P No. 20070 of 2003. On 11.3.2005 an order was passed by the Hon''ble Supreme Court to restore the connection of the Petitioner forthwith which had been disconnected long back subject to Petitioner''s clearing the arrears. Pursuant to that order, electric connection was restored on 15.3.2005 on making payment of outstanding amount. Ultimately that S.L.P was disposed of on 19.7.2007. In spite of long drawn aforesaid litigation, the dispute again arose when, as per the case of the Petitioner, the Electricity Board raised a bill wrongly on account of various counts including delayed payment of surcharge which was objected to but the authority of the Board did not consider the matte in the light of the objection raised by the Petitioner. The Petitioner finding no way out preferred an application before the Vidyut Upbhokta Shikayat Niwaran Forum which was disposed of on 10.10.2007 remanding the matter to the General Manager-cum-Chief Engineer, Respondent No. 2 to dispose of the same within a period of one month. Accordingly, the Respondent No. 2, vide its order dated 25.3.2008 directed the authorities of the Jharkhand State Electricity Board to revise the bills of the Petitioner.

It is also the case of the Petitioner that the Electrical Superintending Engineer did not carry out the order passed by the General Manage-cum-Chief Engineer, Respondent No. 2. Being fed up with the attitude of the authority of the Board, the Petitioner thought it proper to go for disconnection and hence, wrote a letter on 6.5.2008 requesting to the Board to disconnect the electrical connection and to raise final bill so that payment be made. But that was never done, though in the meantime, the Petitioner in terms of the directives given by the General Manager entered into an agreement for supply of connected load of 500 KVA. The Petitioner again on 7.1.2009 made a request to raise the bill in accordance with the direction of the General Manage but the authority did not pay any heed and, therefore, decision was taken for switching over to another licensee, namely, JUSCO but in absence of ''no objection certificate'' to be granted by earlier licensee on payment of entire dues, the Petitioner became helpless to have electric energy from another licensee. However, on 31.1.2009 electric power was disconnected but bills were never revised, as a result of which, the payment could not be made and thereby the Petitioner became handicapped in having new connection from the JUSCO on account of no objection certificate from the Jharkhand State Electricity Board. Ultimately, on 28.12.2010 a bill amounting to Rs. 6,11,39,729/-was served which was not in terms of the order passed by the General Manager. Immediately the Petitioner raised objection on this account but the authority instead of doing needful in the matte initiated a certificate proceeding for recovery of the said amount. Therefore, the Petitioner filed a writ application before this Court, vide W.P.(C) No. 935 of 2011. On filing said writ application, the Petitioner came to know that the Board has also filed a writ application after almost 3 years against the order of the General Manager whereby he had directed the authority to revise the bill. this Court after hearing the matter,stayed further proceeding of certificate case, vide its order dated 22.3.2011. At the same time, the case was ordered to be heard along with the Writ Application bearing No. 5202 of 2010 preferred by the Board. Thereupon, the Petitioner wrote a letter to the Jharkhand State Electricity Board for granting no objection certificate so as to he may have electric connection with other licensee, JUSCO and this request seems to have been made in view of the order passed by the Electricity Regulatory Commission on 20.7.2007 which was affirmed by the Appellate Tribunal of Electricity, New Delhi with certain modification.

It be recorded that the supply code though does have provision as contained in Clause 7.5 prescribing termination of the agreement by the consumer on fulfilling certain conditions but it does not contemplate about termination of agreement in a situation where some dues is outstanding against the consumer on account of some dispute. On account of that situation, the matter some how came before the Jharkhand State Electricity Regulatory Commission so that some resolution be taken in this regard. The Regulatory Commission did record that in such situation on giving undertaking of payment of the amount to be paid or on furnishing bank guarantee, the consumer can switch over to other licensee after getting the electric connection disconnected in terms of Clause 7.5. of the supply code.

It further recorded that on fulfillment of the condition, existing licensee if does not issue ''no objection certificate'' it would be deemed to have been issued after expiry of 15 days. The said resolution taken by the State Regulatory Commission was challenged before the Appellate Tribunal where the matter gets cropped up regarding modalities to be adopted in granting no objection certificate when the matter relating to outstanding dues is pending before the Court. On considering this aspect of the matter, the Tribunal did hold that '' in such situation, it would be in the discretion of the Court to pass an order directing a party disputing the electricity bill to given an undertaking or to furnish a bank guarantee to secure the amount in dispute''.

It is also the case of the Petitioner that in spite of that, the authority did not issue no objection certificate, though agreement had been terminated 30 days before and even disconnection had already been effected. Under these circumstances, this writ application has been filed..

Mr. Mittal, learned Senior counsel appearing for the Petitioner submitted that in spite of the order passed by the General Manager-cum-Chief Engineer when the Board did not raise bill in terms of his order, the Petitioner became fed up with the long drawn litigation and decided to have electric energy from other licensee and therefore, approached the Board to grant no objection certificate with clear stand that the Petitioner is ready to deposit the outstanding dues which be raised in accordance with the direction given by the General Manager but the Board instead of raising the bill in accordance with the direction given by the General Manager, raised the bill arbitrarily and then immediately got certificate proceeding initiated for realizing the said amount which was challenged and the proceeding of the certificate case has been stayed.

It was pointed out that until the matter is decided, the Petitioner is ready to give co-lateral security and even the undertaking for making payment of the amount which would be determined by the Court and, in fact, photocopy of the sale deed as well as undertaking has also been submitted before this Court in terms of the order of this Court and, hence, the Board be directed to issue ''no objection certificate'' which the Board is now duty bound to give it in view of the resolution of the State Electricity Regulatory Commission which has been affirmed by the Appellate Tribunal.

As against this, Mr. V.P. Singh, learned Senior counsel appearing for the Board submitted that since there is no statutory provision under the Act or Rules or Regulation to grant no objection certificate, no writ is maintainable.

He would further submit that earlier to this litigation when the Board had raised bill against the Petitioner, that matter went up to the Supreme Court and ultimately the Hon''ble Supreme Court directed the Petitioner to make payment of the dues. Thereafter the Petitioner again raised dispute when fresh bill was raised by the Board which matter when came before the General Manager-cum-Chief Engineer, he passed an order directing the authority to raise bills in terms of the direction given by him which was against the decision of the Hon''ble Supreme Court and therefore, the Board has challenged the order of the General Manager before this Court which is pending and therefore, the Board will have no objection in granting no objection certificate provided the Petitioner does pay the entire outstanding dues.

Admittedly, the bill raised for consumption of the electric energy by the Petitioner is under litigation before this Court. The Board on raising the bill, got a certificate proceeding initiated for realizing the said amount. However, the initiation of proceeding on being challenged before this Court, the further proceeding has been stayed. Meanwhile, the Petitioner approached before the Board to have ''no objection certificate'' so as to Petitioner may switch over to another licensee but the Board did not respond to that and hence, the matter has come up before this Court.

This question does arise as to whether the Petitioner is entitled to have no objection certificate from the Board ?

Admittedly, no such contemplation is there either in the Act or in the Rules or even in the Regulation for issuance of no objection certificate by the licensee. However, Clause 7.5 of the Supply Code does speak about the termination of the agreement which reads as follows:

Clause 7.5 - A consumer may terminate the agreement after expiry of the initial period of agreement after giving 30 days notice to the distribution licensee. However, if the agreement is to be terminated before expiry of the initial period of agreement, the consumer shall be liable to pay charges as per tariff for the balance period of agreement.

Provided that whenever an agreement is terminated on notice given by the consumer the distribution licensee shall give a written intimation within 15 days after termination failing which such intimation shall be deemed to have been given to the consumer.

Provided further that if the service of the consumer remains continuously disconnected for 180 days not being a temporary disconnection upon request of the consumer the agreement shall be deemed to be terminated on the expiry of 180 days or after expiry of the initial period of agreement whichever is later without prejudice to the rights of the distribution licensee or of the consumer under the Act for recovery of any amount due under the agreement.

The aforesaid provision does speak about the termination of agreement on fulfilling of certain condition but it never contemplates about the termination of agreement at the instance of consumer when dispute relating to electric bill is pending.

When such situation arose, the matter came up before State Electricity Regulatory Commission which resolved that in such situation on giving undertaking of the payment of the amount to be paid or on furnishing bank guarantee, the consumer can switch over to other licensee after getting the electric connection disconnected in terms of Clause 7.5 of the supply code.

It further recorded that on fulfillment of the condition existing licensee if does not issue ''no objection certificate'' it would be deemed to have been issued after expiry of 15 days.

That matter was challenged before the Appellate Tribunal for Electricity, New Delhi. The Appellate Tribunal upheld the order by substituting 15 days by 30 days. With respect to dispute relating to electricity bill, it was observed that it will be discretion of the Court where the matter is pending to pass an order directing a party disputing the electricity bill to give an undertaking or to furnish bank guarantee to secure the amount in dispute.

Under this situation, I do not find any substance in the submission that in the situation as aforesaid no writ or direction can be issued for grant of ''no objection certificate''.

It be recorded that in similar situation, this Court in a case of W.P (C) No. 1990 of 2010 did pass an order for issuance of no objection certificate within 30 days on furnishing document in original as co-lateral security and also an undertaking.

Thus, the Petitioner is also entitled to have no objection certificate on deposit of sale deed as co-lateral security and also an undertaking for making payment of the amount which ultimately is found to be payable to the Board. Such undertaking and also a photocopy of the sale deed relating to a piece of land, valuation of which is said to be more than the amount legally payable by the Petitioner has been deposited with this Court under a direction of this Court.

Thus, the Board is hereby directed to issue ''no objection certificate'' to the Petitioner within 30 days from the date of furnishing original copy of the sale deed, photocopy of which has been submitted to this Court and also an undertaking to the effect as stated above before the Respondent-Board.

Thus, this writ application is disposed of with the aforesaid direction.