The Tamil Nadu Electricity Board vs R. Narendra Kumar

B. Rajendran, J.—The defendants in O.S. No. 5104 of 2001 are the appellants in this second appeal. The said suit in O.S. No. 5104 of 2001 was filed by the respondent herein praying for a declaration to declare that the show cause notice dated 31.03.2001 issued by the second defendant/second appellant herein and the assessment order dated 28.04.2001 issued by the first defendant/first respondent herein are null and void and not binding on the plaintiff/respondent herein and for a consequential mandatory injunction directing the defendants/appellants to re-install the meter and restore supply of electricity to the plaintiff''s SC No. 67-23-109 at K-11, Industrial Estate, Vyasarpadi, Chennai - 600 039. Subsequently, the plaint was amended on 14.12.2004 challenging the order dated 09.09.2013 passed by the third respondent, confirming the order dated 28.04.2001 of the first defendant.

It is the case of the plaintiff/respondent herein that he has taken the suit property on lease on 15.10.2000 together with electricity amenity. According to the plaintiff/respondent, after getting the certificate from the commercial tax and sales tax authorities on 14.12.2000, he commenced the production of P.V.C. pipes in the suit property. While so, during the course of business of the plaintiff/respondent, on 09.03.2001 officers of the electricity board inspected the service connection provided to the property and alleged that there was tampering of the wiring and theft of electricity energy has been committed. On the same day, the officials of the Electricity Board disconnected the electricity service connection. The second defendant/second appellant herein issued the show cause notice dated 31.03.2001 calling upon the plaintiff/respondent herein to show cause as to why he should not be held liable for theft of electricity energy as per the terms and conditions of supply of electricity energy. The Plaintiff/respondent was further called upon to show cause as to why a compensation should not be levied to the tune of Rs. 31,48,531/-. In and by the said notice dated 31.03.2001, the plaintiff was also called upon to appear for an enquiry on 10.04.2001. The plaintiff/respondent submitted his explanation on 10.04.2001 but did not attended the enquiry. However, the landlord of the premises attended the enquiry and requested the first defendant/first respondent herein to drop all the charges. It was explained to the first defendant that the plaintiff entered into a lease agreement only on 15.10.2000, the machineries were installed thereafter and the production commenced only during December 2000. The plaintiff/respondent filed the suit challenging the show cause notice dated 31.03.2001 issued by the second defendant. Subsequent to the filing of the suit, the first defendant passed an order of assessment dated 28.04.2001 assessing the loss caused to the department at Rs. 31,48,531/-. According to the plaintiff/respondent, the assessment was made erroneously on the basis that the plaintiff''s workshop functioned for 300 working days in a year and 24 hours a day continuously without any break. Therefore, challenging the assessment order dated 28.04.2001, the plaintiff/respondent preferred a statutory appeal before the third respondent herein. Pending the statutory appeal, as the respondents attempted to disconnect the electricity service connection, the plaintiff filed the suit only challenging the assessment notice and for consequential injunction from disconnecting the electricity service connection. In the suit, interim order was granted to pay the assessment amount in two instalments and not to disconnect the electricity service connection. A direction was also issued to dispose of the appeal in a time bound manner. The appeal was taken up and ultimately it was rejected by the third respondent on 09.09.2013 and the order of rejection was also subjected to challenge by the plaintiff/respondent by amending the plaint suitably.

The suit was resisted by the department by filing a written statement contending inter alia that the suit is not maintainable especially when the plaintiff/ respondent has already filed an appeal dated 28.04.2001 before the third respondent and during the pendency of the statutory appeal, the suit is not maintainable. It was further contended that the suit is barred under Section 9 of Civil Procedure Code as already the plaintiff availed the remedy before the statutory authority namely the third defendant. It was further contended that the Anti Power Theft Squad have inspected the premises in question on 09.03.2001 after giving prior notice to the plaintiff/respondent. During the course of such inspection, it was found that the live wire was directly connected with the supply line of the plaintiff company by-passing the energy meter. Therefore, it was reported that the plaintiff/respondent indulged in theft of electricity energy by violating the terms and conditions of the supply code. In this connection, a written complaint was given to the Inspector of Police, P-5, M.K.B. Nagar Police Station on 10.03.2001 based on which a case in Crime No. 179 of 2001 was registered. The show cause notice issued by the department is in consonance with the principles of natural justice. The Plaintiff/respondent also submitted an explanation on 10.04.2001 besides that the land owner appeared for an enquiry. After conducting an enquiry, the department has determined the loss caused to the department. The assessed amount was also directed to be paid by the plaintiff in 15 equated monthly instalment commencing from 18.05.2001. While so, the plaintiff/ respondent ought to have preferred only statutory appeal. When the plaintiff/ respondent has filed a statutory appeal before the third defendant/third respondent, the suit is not maintainable inasmuch as he cannot avail parallel remedy for one and the same dispute. Even before the trial court, on the application of the plaintiff/respondent in I.A. No. 14778 of 2001, direction was issued to the plaintiff/respondent to pay 2 instalment amount and on such payment, the electricity service connection was directed to be restored. Having availed such remedy, it is not open to the plaintiff/respondent to institute the suit and therefore the defendants /appellants prayed for dismissal of the suit. During the pendency of the suit, the third respondent rejected the appeal filed by the plaintiff/respondent on 09.09.2003 and the order of the third respondent was also subjected to challenge in the suit by amending the plaint.

Before the trial court, the plaintiff examined himself as PW1, another witness T. Kandasamy as PW2 and marked Exs. P1 to P18. On behalf of the defendants, one G. Thiagarajan examined himself as DW1 but no documents were marked. The trial court, on appreciation of the oral and documentary evidence made available, dismissed the suit. Aggrieved by the same, the plaintiff preferred A.S. No. 674 of 2006 before the lower appellate Court. The lower appellate Court pointed out that the Field Workman who actually attended the work on 27.02.2001, prior to inspection by the anti theft squad, had stated that there was no default or tampering of meter etc., Therefore, it was pointed out that as it is proved that there could not have been any theft of loss of energy by illegal tampering before 27.02.2001 and if at all any theft or loss of energy by illegal tampering it should have been between 27.02.2001 and 09.03.2001 on which date, the anti theft squad inspected the premises. Therefore, the lower appellate Court pointed out that the loss of energy has to be assessed only between the period from 27.02.2001 to 09.03.2001 for 11 days. Consequently, the lower appellate Court itself arrived at the loss to the tune of Rs. 1,15,446/- for 11 days. Aggrieved by the same, the present second appeal is filed by the department.

At the time of admission of this second appeal, the following substantial questions of law have been framed for consideration namely

(i) Whether the lower appellate Court failed to note that without exhausting the appeal remedy and before the appeal disposed of by the appellate authority (Superintending Engineer/TNEB) the plaintiff cannot file the suit as per the judgment of the Honourable Supreme Court of India reported in 1997 SCC 120

(ii) Whether the assessment amount of Rs. 31,48,531/- is payable by the respondent as per clause 8.01 and 8.02 of the terms and conditions of supply of electricity?

(iii) Whether the terms and conditions of supply of electricity is upheld by the Honourable Division Bench of our Honourable High Court of Madras in W.A. Nos. 343 and 344 of 1998 dated 12.01.2009 following the Honourable Supreme Court judgment reported in M/s. Hyderabad Vanaspathi Limited Vs. Andhra Pradesh State Electricity Board and Others, ?

(iv) Whether the lower appellate Court erred in reversing and modifying the judgment and decree of the trial court by reducing the compensation amount from Rs. 31,48,531/- to Rs. 1,15,446/- and ordering refund of the amount of Rs. 4,19,804/-?

I carefully considered the rival submission made by the counsel for both sides and also perused the materials placed. The plaintiff has instituted the suit challenging the show cause notice dated 31.03.2001 issued by the second defendant. The said notice was issued pursuant to an inspection conducted by the anti theft squad on 09.03.2001. Admittedly, at the time of inspection, it was found that the main line wire was snapped and it was directly connected to the supply line of the plaintiff company by-passing the energy meter. This is not disputed by the plaintiff. What is disputed by the plaintiff is only the quantification of the amount sought to be levied in the show cause notice. In the show cause notice, the plaintiff was called upon to show cause as to why compensation charges of Rs. 31,48,531/- be not recovered from him in accordance with the terms and conditions of supply. The plaintiff submitted his explanation on 10.04.2011 and an enquiry was conducted by the first defendant. Thereafter, an order of assessment was passed by the first defendant on 28.04.2001. The plaintiff questioned the correctness of the order of assessment dated 28.04.2001 before the third respondent by filing a statutory appeal and thereafter, the suit is filed by him pending the statutory appeal. In the appeal, the plaintiff would contend that the average consumption charges taken for the preceding 12 months and 24 hours working hours for 300 days is untenable. During the pendency of the suit, the first defendant rejected the appeal on 09.09.2003. Upon such rejection, the plaintiff filed a petition for amending the plaint and subjected the order of rejection dated 09.09.2003 also under challenge in the suit. It is contended by the plaintiff that the order of assessment is per se illegal inasmuch as the third defendant followed an anarchy principle, contravened the terms and conditions imposed in the code of supply and imposed an exorbitant amount as alleged loss caused to the department.

With this background, it has to be seen whether the suit filed by the plaintiff is maintainable or not. Admittedly, as against the levy of assessment, the plaintiff/respondent filed a statutory appeal before the third respondent and on that date, the suit filed by the plaintiff/respondent was also pending before the trial court. In this context, it would be useful to refer to the decision of the Honourable Supreme Court in the case of Punjab State Electricity Board and Another Vs. Ashwani Kumar, , relied on by the learned counsel for the defendants/appellants, wherein it was held in para Nos. 8 and 9 as follows:-

"8. The question then arises whether the Civil Court would be justified in entertaining the suit and issue injunction as prayed for? It is true, as contended by Shri Goyal, learned Senior Counsel, that the objections were raised in the written statement as to the maintainability of the suit but the same given up. Section 9 of C.P.C. provides that Civil Court shall try all suits of civil nature, subject to pecuniary jurisdiction, unless their cognizance is expressly or by necessary implication is barred. Such suit would not be maintainable. It is true that ordinarily, the Civil Court has jurisdiction to go into and try the disputed questions of Civil nature, where the fundamental fairness of procedure has been violated. The statutory circulars adumbrated above do indicate that a fundamental fairness of the procedure has been prescribed in the rules and is being followed. By necessary implication, the cognizance of the civil cause has been excluded. As a consequence, the Civil Court shall not be justified in entertaining this suit and giving the declaration without directing the party to avail of the remedy provided under the Indian Electricity Act and the Indian Electricity (Supply) Act and the instructions issued by the Board in that behalf from time to time as stated above.

Shri Goyal has contended that the authorities do not hear the parties, nor give reasoned order. Therefor, the parties cannot be precluded to avail of the remedy of a suit. We cannot accept such a broad and generalised proposition. When the provisions for appeal by way of review has been provided by the statutory instructions, and the parties are directed to avail of the remedy, the authorities are enjoined to consider all the objections raised by the consumer and to pass, after consideration, the reasoned order in that behalf, so that the aggrieved consumer, if not satisfied with the order passed by the Board/appellate authority, can avail of the remedy available under Article 226 of the Constitution. Therefore, by necessary implication, the appropriate competent authority should here the parties, considers their objections and pass the reasoned order, either accepting or negativing the claim. Of course it is not like a judgment or a civil court. It is then contended that the respondent has been subjected to pay hug amount of bill in a short period; hence, it is a case for interference. We find no force in the contention. May be that due to the advice given by the counsel, the respondent obviously has availed of the remedy of the suit, instead of departmental appeal. In our view, by necessary implication the suit is not maintainable. Therefore, the respondent is at liberty to avail the remedy of appeal within six weeks from today and raise the factual objection before the Board and the Board/appellate authority would consider and dispose of them, as indicated earlier, on merits.

It is evident from the above decision of the Honourable Supreme Court that when there is an alternative remedy available before the departmental authorities, the aggrieved person should only avail such statutory remedy and should not resort to invoke the jurisdiction of the Civil Court.

The learned counsel for the defendants/appellants also relied on the decision of this Court in the case of (Assistant Engineer (O&M), TNEB, Vellore and others Vs Abdul Lathif Mahagir and others) (2008) 6 MLJ 787 wherein in Para No. 21, it was held as follows:-

"21. In any event, if aggrieved by Exhibit A-18 Demand notice, the plaintiff ought to have sought for redressal of appropriate remedy available under the Act. If the Provisional Assessment is questioned, the plaintiff must have preferred appeal to the Divisional Engineer, then to the Superintendent Engineer, Chief Engineer and then to the Chairman of the Board. Admittedly, the plaintiff not having exhausted the remedies, rushed to the Civil Court bye-passing the prescribed procedure and authorities under the Act."

It is evident from the above decision of this Court that if the plaintiff/ respondent is aggrieved by any demand notice or an assessment order, he should only prefer a statutory appeal and the jurisdiction of the civil court is ousted. In the present case, the plaintiff/respondent has parallely invoked the jurisdiction of the civil court and also preferred a statutory appeal before the third respondent. Therefore, it has to be held that the suit filed by the plaintiff/respondent is not maintainable when there is an alternative and efficacious remedy having been availed before the statutory authority.

The learned counsel appearing for the plaintiff/respondent relied on the decision of the Division Bench of this Court in the case of Union of India (UOI) Vs. Vasantha Carbide Company Ltd., . In this decision, the Division Bench, referring to the earlier decision of the Honourable Supreme Court reported in (Punjab State Electricity Board Vs Aswani Kumar) mentioned supra, held that as against disconnection of electricity power supply a suit is maintainable. In that case, the Division Bench held that remedy of appeal is provided only against the order of assessment of extra levy and not against disconnection of power supply. In those circumstances, the Division Bench of this Court held that the suit is maintainable. In this case, as against the show cause notice, the plaintiff/respondent filed the suit and also parallelly filed a statutory appeal before the third respondent questioning the levy. When the statutory appeal was rejected, the order of rejection was also subjected to challenge in the suit. Therefore, the ratio laid down by the Division Bench of this Court in the above decision is factually distinguishable.

In the present case, the plaintiff has not challenged the manner in which the electricity power supply was disconnected. It is pertinent to point out that during the pendency of the suit, the power supply itself was restored. In the suit, what was challenged by the plaintiff is the show cause notice issued by the department calling upon the petitioner to show cause as to why levy should not be made. When such a notice was issued by the department, the plaintiff/respondent ought to have availed only the statutory remedy before the third respondent instead of rushing to the trial court in filing the suit. Even otherwise, the plaintiff was given sufficient time to pay the amount levied in instalments, but he has not paid the amount. Rather, he tacidly preferred the statutory appeal and pending such appeal, he rushed to the trial court and instituted the suit challenging the show cause notice dated 31.03.2001 issued by the second defendant. The plaintiff not only stopped with the filing of the suit. He also filed a statutory appeal before the third defendant and on its dismissal, subjected the order of the third defendant also to challenge in the suit by amending the plaint. Thus, the plaintiff not only filed the suit but also availed the alternative remedy of statutory appeal before the statutory authority. In fact, only on the basis of a direction given by the trial court, the third respondent had taken up the appeal and rejected it on merits. In the light of the above discussion and following the decisions mentioned supra, I hold that the suit filed by the plaintiff/respondent is not maintainable. Accordingly, the first question of law is answered in favour of the appellants and against the respondent.

The first appellate Court erroneously concluded that the production commenced by the plaintiff/respondent only during December 2001 and before the inspection by the anti theft squad, the Field Workman attended the work on 27.02.2001 in the premises of the plaintiff but he did not find any default or tampering of meter etc., Therefore, the first appellate Court held that the assessment of the amount for 12 months preceding the occurrence is unjustifiable. This observation of the first appellate Court is erroneous. Even according to the first appellate Court, there was a electricity theft and it could have been committed during the period between 27.02.2001 and 09.03.2001. It was proved by the department that there was theft of electricity energy during the course of inspection by the anti theft squad. When there is electricity theft committed by a consumer, the department is empowered to levy 12 months of the average consumption charges as has been stipulated in clause 8.01 and 8.02 of the terms and conditions of supply and it is binding on the plaintiff/respondent. When the plaintiff/respondent enjoyed the electricity amenity by agreeing to the terms and conditions of supply, it cannot be contended that the department has no right to levy 12 months average consumption charges as penalty. Even otherwise, the levy of amount by taking the average consumption charges of the preceding 12 months by the Electricity Board as has been upheld by this Court in the judgment rendered in W.A. Nos. 343 and 344 of 1998 dated 12.01.2009 following the Honourable Supreme Court judgment reported in M/s. Hyderabad Vanaspathi Limited Vs. Andhra Pradesh State Electricity Board and Others, . When the first appellate Court finds that the levy made by the third respondent is excessive, it ought to have returned the plaint and directed the parties to appear before the third respondent for consideration of the assessment of levy afresh. The first appellate Court, without directing the parties to appear before the third respondent, ought not to have reduced the quantified amount towards levy. The first appellate Court is not justified in quantifying the amount on its own. Therefore, I hold that the question of law Nos. 2, 3 and 4 in so far as it relates to reduction of the amount by the first appellate Court is not justified and these questions are answered in favour of the appellants and against the respondent.

The learned counsel for the plaintiff/respondent relied on the decision of this Court in the case of Hindustan Engineering Industries Vs. The Assistant Divisional Engineer, O and M, Madras Electricity System and Others, wherein this Court held that the assumption that the Board has suffered loss for one year is not based on any material and the respondents have not made any attempt to fix the date of theft. Relying on this decision, the learned counsel for the plaintiff/respondent would contend that the plaintiff had taken the premises on lease only on 15.10.2000 and commenced the production activities on 14.12.2000. To substantiate this, the plaintiff has produced the lease agreement, invoices, payment bills etc., however, the third respondent, while rejecting the statutory appeal, did not consider it. In any event, the calculations made by the third respondent, taking into account 12 months preceding consumption average, is excessive and it is not warranted. Even during the course of enquiry, the plaintiff/respondent could not appear as he was not in station and the land owner alone appeared. Therefore, the plaintiff/respondent ought to have given one more opportunity to put forth his submissions, but it was not done. Therefore, the learned counsel for the plaintiff/respondent sought for affording one more opportunity to the plaintiff/ respondent to submit a representation to the third respondent for reducing the assessment amount and such representation shall be considered on its own merits.

Having regard to the above submission of the learned counsel for the plaintiff/respondent, while setting aside the decree and judgment passed by the first appellate Court and confirming the decree and judgment passed by the trial court, dismissing the suit, I am inclined to issue appropriate direction to the third respondent to consider the representation, if any, submitted by the petitioner for reducing the levy. This is more so that this Court is of the view that the third respondent/Superintending Engineer did not give adequate opportunity to the plaintiff/respondent to produce the documentary evidence before confirming the levy. Taking into account the peculiar facts and circumstances involved in this case and the fact that a huge amount was slapped on the plaintiff/respondent towards alleged loss sustained by the department, in the interest of justice, the third respondent shall consider the representation that may be submitted by the plaintiff/respondent, consider reducing the amount quantified towards alleged loss sustained by the department, on merits.

Subject to the aforesaid observation, the second appeal is allowed setting aside the decree and judgment passed by the first appellate Court and the decree and judgment of the trial court, dismissing the suit, is restored. No costs. However, in the peculiar facts and circumstances of this case, the third respondent is directed to consider the representation, to be filed by the plaintiff/respondent seeking reduction of the assessment amount, afford an opportunity of hearing to the plaintiff/respondent before determining the amount of levy payable by him and thereafter pass orders on merits and in accordance with law, as quickly as possible.