Ridhi Siddhi Co-operative Housing Society Ltd. vs Kim Corporation and Others

V.P. Tipnis, J.—The petitioner is a registered co-operative housing society. The respondent No. 1 is a builder-developer and he has constructed a building known as Alfrad Apartments, Lewis Wadl, Panch Pakhadi final Plot No. 81, TPS1, Eastern Express Highway, Thane. The members of the petitioner society have purchased the flats in the aforesaid building form respondent No. 1.

The 1st respondent builder-developer made an application to the respondent No. 2 i.e. Executive Engineer, Thane Urban Division, Maharashtra State Electricity Board for electric supply on or about 14th July 1986. As no response was received a reminder dated 5-11-1986 was sent by the 1st respondent. The 2nd respondent asked the 1st respondent to bear the costs of sub-station, transformer centre, high tension and low tension lines cost and the cost of other accessories, required by his letter dated 26th November 1986. However the exact amount was not mentioned. The petitioners have asserted that they were ready and willing to pay the charges that may be due and payable by them according to law. However, the respondent No. 2 informed that the Maharashtra State Electricity Board cannot cater the load to the petitioner from the existing nearby substation and respondent No. 2 further demanded from respondent No. 1 to furnish lay out plan in triplicate. Nothing further happened despite reminders in the matter.

The petitioners have further submitted that M/s Adimaya Construction Company who are also developers and are constructing another building on the same plot of land, have offered a sub-station to the respondent No. 2 and the proposed sub-station is at a distance of about 25'' from the building of the petitioner-society. The respondent No. 1 also issued notice through its advocate to the Electricity Board on 31-3-1987 and the copy of the said notice was also sent to the Electrical Inspector.

The petitioners submit that they have made application in July 1986 and the Board has been illegally demanding construction of sub station and costs of the material, which according to the petitioners is not permissible under law. The petitioners have, therefore, prayed for a direction quashing the demands made by the Electricity Board in their letter dated 26-11-1986 and further writ of mandamus directing the Electricity Board to supply electric energy to the petitioners'' building constructed on final plot No. 81.

It requires to be noticed that M/s Adimaya Construction Company was added as respondent No. 5 to this petition. On 8-5-1987 an order was passed after hearing the advocate for the petitioners, advocate for the respondent Nos. 2 and 3 as also advocate for the respondent No, 1 and 5, A statement was made on behalf of the respondent No. 5 that an amount of Rs. 2.77.000/- shall be deposited with the Maharashtra State Electricity Board on or before 20th May 1987. The advocate for the petitioners made a statement that the petitioners, without prejudice, will comply with all the terms and conditions regarding supply of electricity as enumerated in the affidavit in reply on or before 20-5-1987. Upon compliance of the aforesaid, the Electricity Board was directed to take steps for supply of electricity. It is further an admitted position before us that as a matter of fact the amount was deposited and petitioners have also complied with the requisition and the supply was commenced and is continuing since long.

In the affidavit in reply filed on behalf of the Maharashtra State Electricity Board it is submitted that u/s 26 of the Electricity (supply] Act, 1948, the Maharashtra State Electricity Board has all the powers and obligations of a Licencee under the Indian Electricity Act, 1910, in respect of the whole State of Maharashtra and the Electricity [supply] Act. itself is deemed to be a licencee for the purpose of Indian Electricity Act, 1910. It is contended that in exercise of powers conferred u/s 49 read with Section 79 of the Electricity [supply] Act. 1948 the Electricity Board has framed Miscellaneous Conditions of supplies and has also framed Tariffs for supply of power to the consumers. Any person intending to take electricity from the Board is required to apply in the prescribed form and after certain formalities, the consumer is required to enter into agreement of supply with the Board. The miscellaneous Conditions of Supplies and Tariffs framed by the Board are made part of the agreement of supply. It is further contended that under the provisions of Section 59 of the Electricity [supply] Act, the Board is duty bound to carry on its operations under the said Electricity [supply] Act after taking credit of any subvention from the State Government and to adjust its tariffs so as to assure that the total revenue in any year of account, shall after meeting the expenses properly chargeable to revenue including operation, maintenance and management expenses, taxes (If any] on income profits depreciation and interest payable on the debentures, bonds and loans, leave such surplus,, as is not less that 3% or such higher percentage as the State Government may by notification in the Official Gazette specify in that behalf, on the value of fixed assets of the Board in service in the beginning of such year. Thereafter a reference is made to the relevant provisions of the said Misc. Conditions of Supplies and it is asserted that it was pointed out to the petitioners that the Electricity Board cannot cater the load of 244 K.W. from the existing nearby sub-station and that it was necessary to erect one transformer centre in the premises of the petitioners and it was necessary for the petitioners to give consent for giving built-up sub-station of size 13'' X 27'' along with Society''s layout plan. In addition to this the petitioners had to bear the costs of the transformer centre, high tension and low tension lines and other accessories required to give power supply to the premises. In reply the petitioners showed their willingness to pay the prescribed cost and charges as provided in provision 1 [B] of Clause VI of the Schedule to the Indian Electricity Act, 1910. It was stated in the affidavit that the estimated cost of the new-sub-station, the transformer and other accessories would come to Rs. 2,77,000/-. It was also pointed out that the expenditure can be proportionately divided by agreement between the petitioners building and three other buildings constructed by M/s. Adimaya Construction Company. It is asserted that the conditions of supply is deemed to have been framed u/s 49 read with Section 79.

We have heard Shri Agarwal, learned Counsel for the petitioners and Shri Joshi, learned Counsel for the Maharashtra State Electricity Board at some length. Shri Agrawal, learned Counsel appearing for the petitioners submitted that u/s 26 of the Electricity [supply] Act 1948 subject to the provisions of the Act the Board shall, in respect of the whole State, have all the powers and obligations of licensee under the Indian Electricity Act, 1910, and though certain provisions of the Indian Electricity Act 1910 are expressly made not applicable to the Board, Clause VI of the Schedule of the Indian Electricity Act, 1910 is applicable. Shri Agrawal submitted that Clause VI of the Schedule to the Indian Electricity Act makes a provision for certain tariff to be recovered from the person who makes a requisition for supply of electricity, which does not include costs of sub-station, transformer point, high tension and low tension lines and other accessories. It makes a mention only of sufficient security, certain amount of supply of energy to be received and if required by the licensee to pay costs of so much of any service line as it may be necessary for the said purpose to lay down or place beyond one hundred feet from the licensee''s distributing main, although not on that property. Shri Agrawal therefore submitted that the provisions contained in the conditions and misc. charges requiring the petitioners to pay the aforesaid charges, is clearly unauthorised and inconsistent with the provisions of clause VI of the Schedule to the Indian Electricity Act and, therefore, has to be quashed as unlawful. Shri Agrawal next submitted that even if it is taken that the conditions and misc. charges as framed by the Board are regulations u/s 79 of the Electricity [supply] Act, 1948, same can be lawfully made only by notification in the Official Gazettes per the express words of Section 79, Secondly Shri Agrawal contended that under the provisions of Section 79-A, every such regulation made by the Board is required to be laid, as soon as may be, before the State Legislature. Shri Agrawal therefore contended that inasmuch as the regulations are not gazetted and are not laid before the State Legislature, same cannot be implemented.

Shri Joshi, learned Counsel appearing for the Electricity Board contended that Clause VI of the Schedule to the Indian Electricity Act, 1910, is not exhaustive but can be supplemented by other provisions. He relied in this behalf, on the decision of Karnataka High Court reported in K.S. Susheela and Another Vs. The Karnataka Electricity Board, Bangalore and Others, . Shri Joshi further submitted that nothing in the objected conditions is inconsistent with Clause VI of the schedule to the Indian Electricity Act, 1910. In this behalf he relied upon the decision reported in Hyderabad Engineering Industries Ltd. and Others Vs. A.P. State Electricity Board and Others, . Shri Joshi further contended that the conditions of supply are framed u/s 49 though erroneously asserted in the affidavit in reply, as also u/s 79, In fact Shri Joshi categorically stated that these conditions of supply are not regulations u/s 79, they are neither gazetted nor laid before the State Legislature. However, Shri Joshi submitted that even assuming that it is regulation u/s 79, non-placement of the same before the legislature does not make it invalid or inoperative. Shri Joshi in this behalf relied upon the decision of the Apex Court reported in Jan Mohammad Noor Mohammad Begban Vs. State of Gujarat and Another, . Shri Joshi next submitted that in view of the provisions of Section 59 of the Electricity [supply] Act, 1948 conditions of recovery of costs involved can be justified. Ultimately Shri Joshi contended that in the facts and circumstance of this case, the condition is just, reasonable and equitable and therefore, should not be interfered with by this Court in its writ jurisdiction,

Coming first to certain undisputed facts, it must be stated that it is an agreed position before us that so far as the area in which the petitioners building is situate, the distribution mains have been laid by the Electricity Board and supply of energy through them has commenced. Therefore, though Shri Agrawal in this behalf has relied upon the judgment of the Division Bench of this Court reported in AIR 1966 Bombay 160-Maharashtra State Electricity Board v. Madhusudan dass and Brothers, Tumsarand especially paragraphs 18 to 21 thereof. In view of this admitted position it is unnecessary to refer to the said judgment. In support of his submissions Shri Agrawal has also relied upon the judgment of the Apex Court reported in State of U.P. and Others Vs. Hindustan Aluminium Corpn. and Others, . paragraphs 17 to 22 in particular. In paragraph 22 of the said judgment it is mentioned that "distribution main" has been defined by Clause [e] of the same section to mean the portion of any main with which a service line is, or is intended to be, immediately connected. This judgment also makes a reference that the provisions of Clause VI of the Schedule shall apply to the Electricity Board in respect of that area only where distribution mains have been laid by the Board and the supply of energy through any of them has commenced. As stated earlier in view of the agreed position before us that the distribution mains have been laid in the area concerned and that the supply has been commenced, we need not deal with this case any further. Shri Agrawal also relied upon the decisions of the Allahabad High Court reported in U.P. State Electricity Board Vs. Smt. Lakshmi Devi Sehgal and Another, , which lays down that a transformer is not a part of the service line and in computing the cost of service line as may be laid or placed for the purpose of supply of energy beyond 100 feet of its distributing main, the Board cannot demand the cost of the transformer from the consumer in terms of Clause VI of the Schedule. In the aforesaid judgment the Allahabad High Court was dealing with a condition which provided that if in any case the transformer in the rural area outside the premises of a consumer from which he is receiving supply is stolen then the consumer will have to bear the cost of its replacement. One such transformer was stolen and when the consumer requested the Board to replace the stolen transformer, the Board insisted that the consumer should bear the replacement costs. It was in those circumstances that the Allahabad High Court held that the said condition cannot be held to be lawful.

At the beginning only we must make it clear that the Board has categorically stated before us that these conditions are not regulations u/s 79 of the Electricity [supply] Act, 1948. Therefore, we need not consider the fact that those were not gazetted and they were not laid before the State Legislature. The Board''s categorical stand before us that these terms and conditions are framed under the powers given to the Board by the provisions of Section 49 of the Electricity [supply] Act. Another thing which must be noted at the beginning is that Shri Agarwal learned Counsel appearing for the petitioners has very clearly stated that the petitioners are challenging only that part of note 6 to Clause 5, which requires the consumer to agree to pay to the Board the total cost [non-refundable] involved in making such supply available including extension of high tension line, distribution transformer sub-station and low tension lines and the specific demand of the Board of costs of sub-station, transformer center, low tension and high tension lines and that petitioners are not challenging the requirement by the Board for making available the suitable piece of land for distribution transformer sub-station at nominal lease of Rs. 1/- per year for 99 years. The submission of Shri Agrawal is that the Board cannot charge anything, which is beyond Clause VI of the Schedule to the Indian Electricity Act and he submits that inasmuch as under the provisions of Clause VI, the Board is permitted to charge only the cost of service line on the property of the consumer and only that portion of the service line, though not on the property of the consumer, but which is beyond 100 feet from the point of main distribution line, nothing more as demanded or as mentioned in the conditions can be lawful.

Shri Joshi on the other hand with reference to the provisions of Section 49, contended that Section 49 clearly empowers the Board to supply electricity to any person upon such terms and conditions as the Board thinks fit. Shri Joshi in this behalf relied upon the decision of the Karnataka High Court reported in K.S. Susheela and Another Vs. The Karnataka Electricity Board, Bangalore and Others, . The Karnataka Electricity Board had framed electric supply Regulations u/s 79 of Electricity [supply] Act, 1948. Under Regulation 2[f] it was provided that the Board may require an applicant seeking supply of electric energy to produce a certificate from the concerned Local Authority to the effect that the construction is an authorised one. The Karnataka High Court in the aforesaid judgment held that Section 26 of the Electricity [supply] Act makes Clause VI of the Schedule to the Electricity Act, 1910 applicable to the supply of electricity by the Board. Under the said clause the Board is under an obligation to- supply electric -energy to the applicant if the distributing main have been laid down. The said clause also prescribes the circumstances under which the supply of electricity could be refused and also the maximum period during which the Board can refuse to supply electric energy. The condition that a building should be an authorised construction is not one of the conditions prescribed therein. The Karnataka High Court has observed that, however, it cannot be said that the conditions prescribed in Clause VI of the Schedule to Electricity Act are exhaustive and it is not competent for the Board to lay down any additional conditions to be complied with for supply of electric energy. In Clause VI certain basic conditions, on the fulfillment of which supply of electricity should be given by the Licensee or the Board as the case may be, are incorporated. In addition to them, Section 49 of the 1948 Act empowers the Board to supply electric energy upon such terms and conditions as the Board thinks fit. The condition challenged was held to be not inconsistent with the provisions of Clause VI of the Schedule to the Indian Electricity Act, 1910.

The Apex Court in its judgment reported in Hyderabad Engineering Industries Ltd. and Others Vs. A.P. State Electricity Board and Others, has held that sub-clause 1 of Section 49 clearly provides that the Board could lay down conditions of supply and for purposes of such supply it may also frame uniform tariffs. Sub-section [1], therefore, clearly authorises the Board to lay down the conditions of supply and have to fix uniform tariffs as provided for in Sub-clause 2. The Apex Court has further observed that if there is any doubt Sub-clause 4 makes it clear that in exercise of powers under this Section Board could fix the conditions of supply and also fix the tariffs. The Apex Court has referred to its earlier decision reported in Jagdamba Paper Industries (Pvt.) Ltd. and Others Vs. Haryana State Electricity Board and Others, , wherein it was observed that Section 49[1] of the Act clearly indicates that the Board may supply electricity to any person upon such terms and conditions as the Board thinks fit. In paragraph 11 of the judgment the Apex Court has clearly observed that in its opinion the specific power u/s 49 Clause 1 is clear enough wherein the Board has been authorised to lay down the conditions of supply.

We are in respectful agreement with the decision of the Karnataka High Court, which lays down that Clause VI is not exhaustive of all the terms and conditions. It is not possible for us to accept the submission of Shri Agrawal that the Board cannot charge anything beyond what is mentioned in Clause VI of the Schedule in view of the judgment of the Apex Court referred to above. The language of Section 49 is clear that the Board has power to supply electricity upon such terms and conditions as the Board thinks fit. Of course, there is no doubt, that these terms and conditions must bear scrutiny of reasonableness, justness and fairness as also lawfulness.

Though not argued, there is another facet of this situation. It is relevant to notice that Section 70 of the Electricity [supply] Act, 1948, provides that no provision of the Indian Electricity Act, 1910 or of any rules made thereunder or of any instrument having effect by virtue of such law or rules shall, so far as it is in consistent with any of the provisions of this Act, have any effect : Sub-clause [2] of Section 70 provides that save as otherwise provided in this Act, the provisions of this Act shall be in addition to and not in derogation of the Indian Electricity Act, 1910. In our opinion, this leaves no manner of doubt that the provisions of the Electricity [supply] Act, 1948 has clear and express overriding effect,

In our opinion, as held by the Karnataka High Court, the provisions of Clause VI of the schedule are not exhaustive and they can be lawfully supplemented in exercise of the powers under the Electricity [supply] Act, 1948. However, assuming that there is some apparent inconsistency between the provisions of Clause VI of the schedule to the Indian Electricity Act and the power given to the Board u/s 49 of the Electricity [supply] Act, 1948, to supply electricity on such terms and conditions as it thinks fit, in view of the provisions of Section 70 of the Electricity [supply] Act, the provisions of Section 49 shall prevail,

As stated earlier, this, however, will not permit the Board to put any arbitrary, unreasonable, or unfair conditions. However whether a particular condition stands, scrutiny of lawfulness, reasonableness, justness and fairness, would be question of fact to be determined in each case. 17. Coming to the facts and circumstances of this case, it is not challenged as unreasonable unfair, or unjust. It has been challenged solely on the ground that those charges having not been mentioned in Clause VI of the schedule, cannot be demanded by the Board. Nevertheless it requires to be stated that Shri Joshi did submit that the condition is just and reasonable as also equitable inasmuch as there are 63 Hat holders in the building, and now, since 3 more buildings have been constructed by respondent No. 2-Adimaya Construction Company, costs would obviously be divided puling very little burden on each individual.

In the result, we find no merit in the petition and the petition is dismissed. Rule is discharged. There shall be no order as to costs.