Municipal Council vs Maharashtra State Electricity Distribution Company Limited

V.A. Naik, J—By this first appeal, the appellant - Municipal Council challenges the judgment of the trial Court dated 18.08.2001 partly decreeing a suit filed by the respondent - plaintiff for recovery of a sum of Rs. 55,80,787/- towards realization of the electricity bills with interest. By the said judgment the appellant was permitted to pay the decretal amount by monthly installments of Rs. 80,000/-.

The respondent is the original plaintiff. A suit was filed by the plaintiff for recovery of a sum of rupees seventy four lakhs and odd against the appellant/defendant towards the arrears of electricity charges. The plaintiff pleaded that the defendant was irregular in paying the electricity bills. Despite the said communications issued to the defendant, dated 25.11.1988 and 4.1.1989 etc. requesting the defendant to pay the bills regularly, the defendant failed to pay the electricity charges. The plaintiff did not disconnect the electricity supply for long, however, it published in the newspaper about the default of the defendant in making the payment. On reading the news, the defendant informed the plaintiff on 04.01.1991 by a telegram that it was ready to pay the bills but the electricity supply should not be disconnected. On certain conditions, the request of the defendant was acceded to. The defendant, however, did not keep its word and again started making default in payment of electricity charges. After issuing a registered notice to the defendant, the plaintiff instituted the suit.

The defendant filed the written statement and denied the claim of the plaintiff. The defendant admitted that it receives the electricity supply from the plaintiff and it had paid certain sums to the plaintiff in the year 1991. It was admitted by the defendant that the electricity supply was necessary for supplying water to the citizens and if the electricity supply was disconnected the citizens would suffer. According to the defendant, the suit was not maintainable. It was pleaded that the suit was barred by limitation. It was pleaded that the financial condition of the defendant was not good and the plaintiff had illegally issued the bills at the commercial rate.

On the aforesaid pleading of the parties, the trial Court framed the issues and the plaintiff examined its employees Shriram, Krushna and Suresh to substantiate the case. The defendant examined Gopichand who was serving as the Chief Officer of the Municipal council as its witness. The trial Court, on an appreciation of the evidence, partly decreed the suit filed by the plaintiff. The trial Court held that the defendant was liable to pay a sum of Rs. 55,80,787/- towards arrears of electricity charges with interest. The trial Court held that the suit was filed within limitation and the same was maintainable. The Court held that the defendant was entitled to clear the arrears by paying a sum of Rs. 50,000/- per month to the respondent in installments.

Shri Panpalia, the learned Counsel for the Municipal Council submitted that the trial Court was not justified in decreeing the suit of the plaintiff to the extent of Rs. 55,80,787/-. It is submitted that the plaintiff could not have charged interest on the arrears of the electricity charges. It is submitted that the suit was not maintainable as the plaintiff had not served a notice on the defendant under Section 304 of the Maharashtra Municipalities Act. It is submitted that the suit ought to have been dismissed as the monetary claim was barred by the law of limitation. It is submitted that the trial Court has not considered the evidence tendered by the parties in the right perspective before decreeing the claim of the respondent.

Shri Moharir, the learned counsel for the respondent-original defendant, supported the judgment of the trial Court and submitted that the trial Court has rightly held that the suit filed by the plaintiff was maintainable, the same was not barred by limitation and the defendant was in arrears of a sum of Rs. 55,80,787/- towards electricity charges. It is submitted that while holding so, the trial Court has relied on the evidence of the witnesses examined on behalf of the plaintiff as also the agreement, Exhibit 50. The learned counsel sought for the dismissal of the appeal.

On hearing the learned Counsel for the parties and on a perusal of the record and proceedings and the judgment dated 18.8.2001, it appears that the following points arise for determination in this first appeal.

"(1) Whether the trial Court was justified in decreeing the suit of the plaintiff for a sum of Rs. 55,80,787/- with interest?

(2) What order?"

To answer the points for determination framed in this first appeal, it would be necessary to first consider whether the suit filed by the plaintiff was maintainable and whether it was filed within the prescribed period of limitation. It is stated on behalf of the defendant that the suit was not maintainable as the plaintiff had not served a notice under Section 304 of the Maharashtra Municipalities Act on the defendant. The trial Court has considered this issue and rightly held on a perusal of the provisions of Section 304 of the Maharashtra Municipalities Act that it was not necessary for the plaintiff to serve a notice on the defendant under Section 304 of the Act as a notice was necessary only in a suit against a council in respect of any act done or purported to have been done for execution of the Act or intended execution of the Act. The trial Court rightly held that the suit for recovery of arrears of electricity charges was based on the contract between the parties and, hence, Section 304 of the Act was inapplicable.

The trial Court rightly observed that the suit could not have been dismissed on the ground of limitation. The suit was instituted in April-1994 and the plaintiff had sought the electricity charges for the period from January-1992 to March-1994. The finding of the trial Court on the maintainability of the suit and on the issue of limitation appears to be just and proper.

The trial Court found, on an appreciation of the material on record, that the defendant did not clear the electricity bills issued by the plaintiff and was liable to pay a sum of Rs. 55,80,787/-. For holding so, the trial Court considered the admissions made by the defendant and also the evidence tendered by the plaintiff-Company. The defendant had admitted the default in payment of the electricity charges and had made a grievance in regard to the claim for penal interest. The trial Court relied on Clause 14 of the agreement, Exhibit 50, which empowered the plaintiff to seek interest on the arrears of electricity charges. The trial Court, while answering the issue in regard to the default by the defendant in payment of electricity charges, relied on the Ledger Book produced by the plaintiff. The Court found that though the plaintiff did not file the Cash Book or Bill Book, the Ledger Sheet maintained by the plaintiff at Exhibit 30 could have been looked into for arriving at the amount of dues. The Court found that the defendant did not produce any evidence in rebuttal to show that the electricity charges were paid by the defendant and there were no dues. On a proper appreciation of the evidence, both oral and documentary, the trial Court rightly decreed the suit for an amount of Rs. 55,80,787/- with interest.

The trial Court, while decreeing the suit of the plaintiff also accepted the prayer of the defendant for installments. The trial Court rightly considered that the financial condition of the defendant was not sound and, therefore, the defendant was liable to pay a sum of Rs. 50,000/- per month towards the arrears of Rs. 55,80,787/- with interest. The approach of the trial Court in deciding the suit is just and proper and the findings recorded by the trial Court on the issues framed cannot be interfered in the first appeal. This Court had rightly not stayed the decree during the pendency of the first appeal.

For the reasons aforesaid, the first appeal is dismissed with no order as to costs.