AI Structured Summary
Not yet generated for this judgment
Judgment
K.M. JOSEPH, C.JÂ Â Â Â Â Â Â
Appellant is the respondent in the Writ Petition. The relief sought in the Writ Petition reads as follows:
“(a) To issue a writ, order or direction in the nature of certiorari quashing the letter dated 13.03.2006 (Annexure-XVII of the Writ Petition) and
letter dated 10.04.2006 (Annexure-XIX of the Writ Petition) by virtue of which demand of Rs. 11,21,307/- towards additional charges in respect of
independent feeder (bay charges) and Rs. 31,50,000/- for minimum consumption charges was made from the petitioner.â€
2. Briefly put, the case of the writ petitioner appears to be as follows:
(i) The petitioner has a factory located in Kashipur, Udham Singh Nagar for manufacture of polyster film. The predecessor of the petitioner M/S SRF
Polymers Limited had applied with the appellant for 1500 KV load, which was sanctioned by the appellant vide letter dated 26.3.2004. The petitioner
was to avail power supply within a period of two years from the date of the sanction letter dated 26.3.2004. Before the issue of the sanction letter
dated 24.3.2004, the Director of the appellant had issued an Office memorandum dated 24.3.2004 sanctioning construction of a 33 KV Independent
Feeder from 132 KV Sub-Station, Kashipur for releasing 1500 KVA power load to the predecessor of the petitioner. The memorandum dated
24.3.2004 is produced as Annexure- II.Â
(ii) As per the report of the Executive Engineer, there was no space in the Sub Station for construction of the new Bay. It was decided that the
predecessor of the petitioner may be provided the lines from the two spare Bays and the cost of renovation and the strengthening of the bays spared
after disconnection of the connection of M/S Flow More Polyesters Limited, about 10 years ago, may be provided to the petitioner and the cost of
renovation, strengthening as well as providing of pilfer proof metering cubical with CT, VCB Control relay panel with other miscellaneous expenses
may be charged from the predecessor of the petitioner. Â
(iii) The Executive Engineer demanded certain amounts by letter dated 05.7.2004. They included the S.C. charges (service connection charges) for
the work to be done at 132 KV Substation amounting to Rs.11,14,000/-. Rs.33,12,086/- was put as S.C. charges for construction of 33 KV
independent feeder from 132 KV S/s Kashipur. Petitioner was permitted to pay system loading charges of Rs. 11,70,000/- in six monthly installments.
It made certain deposits. It is stated that, meanwhile, the unit M/s SRF Polymers Limited was acquired by the petitioner w.e.f 01.6.2004. The
Executive Engineer referred the matter to the Board regarding change of the name and stated that whole of the proceedings have become
meaningless. Certain clarification was sought. There is reference to various correspondence, which we will refer to where it is relevant for deciding
this case.Â
(iv) Suffice it to say, the petitioner has approached this court challenging Annexure-17 and Annexure-19, which are dated 13.3.2006 and 10.04.2006
respectively. It is apposite that we refer to Annexure-17 in full length.
It reads as follows:
                      “No. R-705/EDD(K)              Dated: 13.03.06
Subject: Deposit of additional S.C charges, MGC for 6 months & rest S.C. charges against executed estimate.
M/s SRF LTD.,
Plot No. 12, Rampura,
Ram Nagar Road,
Kashipur (U.S. Nagar)
Â
Dear Sirs,
              Please refer to the Indemnity Bond dated 18.02.2005, which was submitted by you against this office memo No.
R477 dated
25.2.2005, (condition No. A) in respect of payment of Rs.31,50,000.00 as minimum consumption charges for 6 months to be made if at any time
Auditor of AG ( Account General Uttaranchal) asks UPCL to realize the amount.Â
In this connection, it is to inform you that Audit of
Accountant General of Uttaranchal was commenced in this office during 2/2006 who once again asked to realize the above amount from you. The
extract photo copy of objection raised by the Audit is enclosed for your perusal.Â
You are, therefore, requested to please deposit Rs. 3150000.00 as MCG for 6 months at the earliest so that the Audit may be intimated accordingly
for removing of objection.
Besides above please refer to this office letter No. R 2645 dated 1.10.2005, vide which you were requested to deposit Rs. 1121307.00 as difference
of S.C. charges for construction of 33KV Bay at 132 KV S/s Kashipur on account of revision of estimate by EE, PITCUL, Kashipur, vide his SI. No.
15/2005-06 for Rs. 2235307.00. Against above letter you have submitted your reply vide your letter dated 17.10.2005, which copy was sent to EE,
PITCUL, Kashipur, vide this office letter No. R 435 dated 10.02.2006; but EE PITCUL, Kashipur vide this letter No. 171 dated 23.02.2006, asked this
office to realize the above additional S.C. charges Rs. 1121307.00 from you (copy enclosed).
Further it is also to point out that Rs. 260950.00 are still to be paid by you on account of difference S.C. charges against executed estimate No.
155/2004-05.
You are, therefore, requested to please deposit Rs. 260950.00 also. In this connection, it is to inform you that completion report of the construction of
line for giving 1500 KVA load to you, is under sanction and as & when it is sanctioned and if any amount is found refundable to you shall be refunded
or adjusted in your monthly bills.
Thus as a brief following amounts are to be deposited by you at the earliest.
Rs. 3150000.00 (6 months MCG) 2. Rs. 1121307.00 (Additional S.C. charges forÂ
 construction of 33 KV Bay)
Rs. 260950.0 (Rest S.C. charges against                                    Â
executed estimate No.
155/2004-05)Â Â Â Â
           Total:  Rs. 4532257.00
(Rs. Forty five lac thirty two thousand two hundred fifty seven only)
Yours faithfully,
(Er. M.R. Arya)
Executive Engineerâ€
(v) Petitioner gave a reply to Annexure-17, which is produced as Annexure-18. It is thereafter that Annexure-19 was issued. It reads as follows:
           “No. R-P54-EDD(K)  Dated 10.04.2006
Subject: Non deposit of Rs. 4532257.00
M/s SRF Ltd.
Ramnagar Road,
Kashipur
Dear Sirs,
Please refer to this office letter No. R 705 dated 13.3.2005, vide which you were requested to deposit Rs. 4532257.00 on account of 6 months MCG
Rs. 3150000.00 S.C. charges of PITCUL, Rs.
1121307.00 & S.C. Charges of as executed estimate Rs. 260950.00.
In this connection, it is to say that you have yet not deposited the above amount; therefore you are further requested to deposit the above amount
within 7 days of issue of this letter; to avoid unpleasant action of disconnection of your connection without prejudice.
Yours faithfully
(Er.M.R. Arya)
Executive Engineerâ€
(vi) It is, accordingly, that the petitioner filed the Writ Petition under Article 226 of the Constitution of India seeking the relief, which we have already
noticed.
3. Pleadings were exchanged. In the counter affidavit, it is relevant to notice paragraph nos. 7 & 9, which reads as follows:
That in reply to the contents of para 8 of the writ petition it is submitted that electricity is supplied to the Uttaranchal Power Corporation Ltd. by the
Electricity
Transmission Corporation of Uttaranchal Ltd; accordingly the construction of 33 KV independent feeder was to be done at 132 KV Sub Station
Kashipur which is under the control of Executive Engineer PITCUL, Kashipur. The 33 KV disconnected Bay of M/S Flow More Polysters Ltd; was
provided to the petitioner and estimate of Rs. 11,14,000/- of the said Bay was prepared by the Executive Engineer PITCUL Kashipur which was
demanded from the petitioner vide letter dated 5.7.2004. Latter on the said estimate was revised to Rs.22,35,307 and difference was demanded from
the petitioner vide letter dated 1.10.2005 which the petitioner did not deposit and the same denied by him vide his letter dated 17.10.2005. Thereafter
the PITCUL division renovated & strengthened the old bay of M/S Flow More Polysters Ltd. which was disconnected 10 years back. The letter
dated 17.10.2005 of the petitioner was sent to the Executive Engineer PITCUL which was replied by him vide his letter dated 23.02.2006 stating
therein that whether new bay is constructed or spare feeder is renovated or strengthened to feed supply to any consumer the full estimate as of a new
one charged from the concerned consumer. The true copies of the estimate, letter dated 5.7.2004, revised estimate, letter dated 1.10.2005 letters
dated 17.10.2005, 10.2.2006 and 23.2.2006 are being filed herewith and marked as Annexure C.A. 2,3,4,5,6,7 and 8 to this affidavit.
That in reply to the contents of para 13 of the writ petition it is submitted that the SRF Polymer Ltd; executed an agreement with the respondent for
supply of 1500 KVA load on 9.8.2004 and the intimation regarding acquiring the unit of SRF Polymers by the petitioner was given vide his letter dated
13.8.2004 which was submitted to in the office of the respondent on 8.9.2004 and in this way cheated the respondent as on the date of execution of
agreement SRF Polymers Ltd. was not the owner of the company and accordingly, the SRF Polymers Ltd. is liable to pay minimum consumption
charges for the balance period of agreement or 6 months whichever is less as per UPSEB/Corporation’s Order No. 479 CUII/R dated 10.6.85.
The true copy of the letter dated 31.8.2004 and Board’s order dated 10.6.1985 are being filed herewith and marked as Annexure C.A. 9 and 10
respectively to this affidavit.
In this respect it is further submitted that the case of minimum guarantee charges for six months which is (6x350x1500)=Rs.31,50,000 was remained
in correspondence with higher authorities w.e.f. 10.9.2004 to October 2004. In the month of November 2004 audit party of the Auditor General of
Uttaranchal audited the account of respondent’s and objection was raised by the audit department regarding not charging MCG amounting Rs
31.50 lac from the petitioner. In view of the objection raised by the audit party the matter was again referred to the Managing Director of the
Uttaranchal Power Corporation Ltd. on 20.1.2005 in shape of note duly signed by the Deputy General Manager, Rudrapur and General Manager, Hill
Zone on which the Chairman/Managing Director Uttaranchal Power Corporation Ltd. passed an order dated 8.2.2005 requiring an indemnity bond to
be furnished by the petitioner in respect of payment of MCG. The true copy of the letter dated 20.1.2005 and order dated 8.2.2005 is being filed
herewith and marked as Annexure 11 and 12 to this affidavit.â€Â
Petitioner filed rejoinder affidavit and a supplementary rejoinder affidavit.
Judgment of the learned Single Judge:
(i) The learned Single Judge, by the impugned judgment, has proceeded to take the view that as far as the payment of minimum charges is
concerned, the supply of electricity was commenced on 27.02.2005 and, till date, it has not been disconnected and the petitioner is paying consumption
charges as per the reading of the meter. Therefore, it is not open to the Department to recover the minimum consumption charges either for the period
prior to the commencement of supply or after the commencement of supply, over and above the bills generated and paid by the petitioner for the
actual consumption, which is admittedly more than the minimum consumption level.Â
(ii) As regards the claim for Rs. 11,21,307/- for additional charges for the construction of 33 KV Bay, this is what the learned Single Judge has stated:
“Now, I have to examine as to whether respondent can recover Rs. 11,21,307/- for additional charges for construction of 33 KV Bay.
Undisputedly, as per the Office Memorandum dated 24.3.2004, 33 KV independent feeder was to be provided to the petitioner and all the expenses
were to be borne by the petitioner, however, later on construction of independent feeder at 33 KV station was found not possible. Therefore,
respondent decided to make supply of the electricity to the petitioner from the old bay feeder, which was earlier being used for supply of the electricity
to M/s Flowmore Polysters Limited, which was disconnected ten years prior to the supply of the electricity to the petitioner and ultimately supply was
made to the petitioner by that old feeder.
Undisputedly, only renovation and maintenance work was done on the old bay feeder and no new construction was made. Undisputedly, the petitioner
has paid Rs. 11,14,000/- for the renovation and maintenance of the old feeder, wherefrom supply was being made to M/s Flowmore Polysters Limited.
Electricity Company is not denying this fact, however, is saying that recovery for additional cost of the construction of independent feeder is being
demanded only because there is an audit report saying that since earlier estimate was prepared for new construction of independent feeder (which
was although not constructed), however, cost thereof should be recovered.
As per Section 46 of the Electricity Act, 2003, distribution licencee may charge from the consumer only such charges, which are authorized by the
State Commission, which were reasonably incurred in providing any electric line or electrical plant. Undisputedly, in the present case, any such
authorization by the State Commission has not been placed on record and recovery of expenditure is being justified on the basis of audit report only.â€
(iii)Â Thereafter, the learned Single Judge proceeds to take the view that unless and until State Commission authorizes to recover the expenses
incurred in providing the electricity, no such charges can be recovered by the distribution licencee. The Writ Petition was allowed and it was found
that the additional charges could not be recovered and the impugned letters, to that extent, were quashed.
In the Appeal, we heard Mr. D.S. Patni, learned counsel for the appellant and Mr. V.K. Kohli, learned Senior Counsel for the respondent/writ
petitioner.
Mr. D.S. Patni, learned counsel for the appellant, would first of all point out that an agreement was executed on 09.8.2004. The agreement was
actually executed between M/s SRF Polymers Limited and the department. As already noticed, the agreement was executed on 09.8.2004. He
thereafter drew our attention to a communication addressed by the present petitioner. This is after the date of the agreement. It reads as follows:
“The General MangerÂ
Uttaranchal Power Corporation Ltd.
Haldwani
Nainital
Date 13/08/2004
           SUB:   SALE OF POLYESTER FILMS BUSINESS BY SRF POLYMERS LIMITED TO SRF LIMITED
Dear Sir,
With an aim to satisfy the customers in the best possible way, by providing the complete focus on the Polyester Film business, the Polyester Films
Business of SRF POLYMERS LIMITED, with its factory situated at, Plot No. 12, Rampura, Ramnagar Road, Kashipur (U.S. Nagar), Uttaranchal
has been sold to SRF Limited, a company incorporated under the Companies Act, 1956, having its registered office at 9-10, Bahadurshah Zafar Marg,
Express Building, New Delhi-110 002 and Divisional Office at C-8, Commercial Complex, Safdarjung Development Area, New Delhi- 110 016, by
virtue of Business transfer agreement signed on June 1, 2004.
All the assets and Liabilities of the business of Polyster Film of SRF Polymers Ltd. transferred to SRF Limited.
Subsequent to purchase of business of Polyster Film SRF Limited has renamed the business as Packaging Films Business. The office address,
however, remains the same, i.e. Plot No. 12, Rampura, Ramnagar Road, Kashipur, Distt. Udham Singh Nagar, Uttaranchal. We would request you to
kindly incorporate our changed name in all your records.
Thanking you
Yours faithfully
FOR SRF Limitedâ€
8. It is, thus, pointed out that a fraud was committed by the petitioner, inasmuch as, as on the date of the execution of agreement dated 09.8.2004,
M/S SRF Polymers Limited was not in existence, as it had been taken over by the present petitioner. This fact was brought to the notice of the
appellant only through the letter. Thereafter, he would draw our attention to a Circular, which is the foundation for the claim for minimum charges.
The Circular, insofar as it is relevant, reads as follows:
“Copy of Addl. Chief Engineer (Com.) Cir. Letter No.479-CU-II/R-4, dated June 10, 1985 addressed to Ex. Engineer EDD Firozabad and copy
endt. to all concerned.
Subject:Â Change of tenancy and shifting of connection.
Please refer to your endorsement No.632-EDDF dated 18-2-1985 on the above noted subject.
In this connection I am desired to say that action in such cases may be taken under the following guidelines:
(1) Shifting of connection to new place can be allowed within the compulsory period also if it fulfils all the conditions provided in the conditions of
supply.
(2) Mutation of name within the compulsory period of agreement can be allowed in case of death of consumer without realization of any charge in the
name of his legal heir(s). But in all other cases change of tenancy/mutation of name within the compulsory period be allowed after payment of
m.c.g. for balance period of agreement or 6 months which ever is less.
Copy of Addl Chief Engineer (Com.) Cir. Letter No. 1345-CU-II/A-4 dt. June 18 1985 addressed to all Ex. Engineers. Electy. Distn./Com./Gen.
Division/ Undertakings, UPSEB and Copy endt. to all concerned.
Subject: Standard draft of the agreement for supply of electrical energy to the consumers having contracted demand of more than 75 KW (100 BHP).
 In view of the revised conditions of supply enforced by the Board w.e.f. July 1984, it has become necessary to modify the existing agreement form
for above category of consumers which was last finalized vide B.O. No.878-C II/SEB/V-137N/69, dated 24/25-7-1973 and modified vide this office
letter No.3588-CU-II/A-4, dated 22.10.1984. Accordingly a copy of the revised agreement form is enclosed herewith with the request that in future
all agreements with such consumers be executed strictly on this form.
It is further advised that at the time of mutation, change of process or sanction of additional process, reduction of load or additional load etc. of the
existing consumers under this category, supplementary agreement should not be executed with them. Instead fresh agreement should be got
executed from the consumer on the revised proforma enclosed.
Your attention is also drawn to D.O. letter No.415-HC/SEB-6(31)/LS/75, dated 21.2.1979 (copy again enclosed) vide which instructions already stand
issued for termination of the agreements containing provision of giving 12/3 months notice (in clause 13 thereof) for enforcing the revised rates. In
case any such agreement has not so far been terminated, immediate action for its termination should be taken as per procedure laid down in the D.O.
letter dated 21.2.1979 referred to above and fresh agreement be executed on the enclosed proforma.
 It should be ensured that while executing further agreements instructions contained in this Office letter No.3588-CU-II/A-4, dated 22.10.1984 are
strictly followed. Encl: As above (Agreement form available at Annexure A-9).â€
9. He would, thereafter, point out that the petitioner had executed an Indemnity Bond. The Bond reads as follows:
INDEMNITY BOND
I, Arun Bharat Ram Son of Dr. Bharat Ram, Chairman and Managing Director of M/s. S.R.F. Limited do hereby declare and indemnify to
Uttaranchal Power Corporation Ltd. through its Executive Engineer, Electricity Distribution Division, Kashipur, as under:-
WHEREAS Uttaranchal Power Corporation Limited, Plot no.12 Rampura, Ramnagar Road, Kashipur, as connection no.B-191.
AND WHEREAS S.R.F. Polymers Limited has transferred as above company to S.R.F. Limited with all movable and immovable properties, including
above electricity connection with fittings and fixture etc.
AND WHEREAS the name of Company is to be changed and audit of AG Uttaranchal has asked Uttaranchal Power Corporation Limited to realize 6
months MCG for maximum of amount Rs.31,50,000/-.
AND MCG is not payable legally by the company as the power connection has not yet been released. Moreover if any time auditor ask UPCL to
realize the amount of MCG for the period of 6 months, the company will be bound to pay the same.
In consideration of UPCL so doing I on behalf of SRF Ltd. hereby indemnify the UPCL to pay for MCG amount for 6 months, if any.
In witness whereof I, Arun Bharat Ram, Chairman and Managing Director of SRF Ltd. on behalf of the company signed this 18th Day of February,
2005 this Indemnity Bond at New Delhi in the presence of following witnesses:-
Witnesses
1.
EXECUTANT
For and on behalf of SRF LTD
(Arun Bharat Ram)
CHAIRMAN & MANAGING DIRECTORâ€
Therefore, he would submit that the Audit raised the objection in terms of the Circular and, honouring the indemnity bond, it is incumbent upon the
petitioner to pay the amount representing the minimum charges. He further expatiated and drew our attention to agreement dated 09.8.2004 in Sub-
Clause (6) of Clause (A) thereof, which is extracted herein below:
“6) Date of commencement of supply means the date mentioned in para (c) hereinunder and if no such date is mentioned then the date of actual
connection of consumer’s installation or the date of expiry of a period of one month from the date of intimation of the consumer about the
availability of power after completion of the arrangements required to connect his installation whichever is earlier.â€
Still further, he drew our attention to the understanding of the parties regarding the words “commencement of supplyâ€. Further, he points out
that in Clause (C) of the agreement dated 09.8.2004, the date of commencement of supply has been specified as 09.8.2004. Therefore, he would
submit that, reading the Circular, the Indemnity Bond and the agreement dated
09.8.2004, the following result would emerge:
This is a case, where there is a mutation. As the original party to the agreement was found not to exist, a request was made by the petitioner to
supplant it in place of the original party. It is agreed subject to the condition that he will pay the minimum charges. It is also submitted that load was
sanctioned on 26.3.2004 and, therefore, as on the date of the agreement dated 09.8.2004, the load was fully sanctioned. Supply, however, commenced
only subsequently. Â
He would further point out that the Circular has not been challenged. The terms of the Circular read with the Indemnity Bond and the terms of the
agreement, meaning thereby, Clause (C) and the Clause which provides for date of commencement whichever is earlier, would form the foundation
for the claim for minimum charges.
Next, as regards the claim for the additional amount by way of construction of Bay, he would reiterate the pleas taken in the counter affidavit and
would contend that the matter was taken up with PITCUL and PITCUL took the view by letter dated 23.02.2006, which is produced as Annexure-
CA 8. It reads as follows:
           “No. 171/ETD400(K)/           Dated 23.02.2006
Sub: Additional SC charges for construction of 33 KV bay at 132 KV Sub Station, Kashipur
For M/s SRF Ltd. Kashipur
Executive Engineer
Electricity Distribution Division,
Kashipur
 This is in reference to your letter No. R 435 Dt. 10.02.06 on the subject cited above that Dy. General Manager, ETC, Haldwani had advised that
whether new bay is constructed or spare feeder is renovated or strengthened to feed supply to any consumer, the full estimate as of a new one is
framed and charged to the concerning firm.
 You are therefore requested to please take necessary action to realize SC charges amounting to Rs. 1121307.00 from the consumer. The future
correspondence in this regard may please be done with ETD, 132 KV, Kashipur.
(S.K. Sharma)
Executive Engineeerâ€
This led to the raising of the demand for the additional charges, which was insisted upon by PITCUL. He would further point out that there is an
Arbitration Clause in the agreement, namely Clause (16), which reads as follows.
“16) If any question or dispute or difference arises between the parties to this agreement as to the interpretation or effect of any provision or
clause herein contained or the construction or effect of any provision or clause herein contained or the construction thereof or as to any other matter
in any way connected with or arising out of this agreement of the operation thereof or the rights duties or liabilities of either party in connection
therewith, such question, dispute or difference shall be referred to the Arbitration of the Chairman Uttaranchal Power Corporation Limited or the
person nominated by him and the award/decision of the said Arbitrator shall be final and biding upon the parties. In case of any neglect or refusal by
the nominee to proceed with the arbitration, the Chairman, MD of Uttaranchal Power Corporation Ltd. may nominate another person in his place to
proceed with the dispute as Sole Arbitrator.
PROVIDED that if the question, dispute or difference relates to or concerns any dues chargeable to the consumer in terms of this agreement no
reference to the arbitration shall at the instance of the consumer be made till the consumer has deposited with the supplier the amount of dues in
dispute, in cash.â€
Per contra, learned Senior Counsel for the writ petitioner would meet the aforesaid arguments in the following manner:
(i) As regards the additional claim towards renovation of the Bay, he would disclaim any relationship between the petitioner and PITCUL. He would
lay store by the understanding, according to him, that the petitioner would have to pay only for the renovation of existing Bay. There is no dispute, in
fact, that a new construction was not done and what was done was only renovation of an existing Bay. The amount due towards renovation of the
existing Bay was quantified at Rs.11,14,000/-. The said amount has been paid, as found by the learned Single Judge. The petitioner cannot be saddled
with the liability to pay any further sum on the basis of the communication addressed to the appellant by PITCUL, runs the argument.
(ii) As regards the claim for minimum charges, he drew our attention to agreement dated 25.02.2005. He would also submit that the endorsements
made therein would make things clear beyond the region of doubt that the earlier agreement dated 09.8.2004 was terminated. There was a
subrogation and a new agreement came into force. In terms of the agreement dated 25.02.2005, power supply was availed of and running charges
were paid and, therefore, this is not a case, which attracts Regulation 17(ii) of the Electricity Supply (Consumers) Regulations, 1984. It reads as
follows:
“(ii) If the supply to a consumer is disconnected on request or in default before compulsory period of two years is over, he shall be liable for
payment of minimum charge for the remaining period by which it falls short of two years or for the period of six months from the date of
disconnection whichever is less, together with the estimated expenditure on the erection and demolition of the sub-station and the line (not paid by the
consumer)Â actually dismantled due to the disconnection, together with the estimated expenditure on the cartage of the salvaged materials to stores
and the cost of unsalvaged materials plus 15% supervision charges on the labour and cartage only.â€
(iii) He would point out that this is not a case, where either, on a request, the connection has been disconnected, nor is it a case where there is any
default committed in the payment and this led to disconnection and, therefore, there is no occasion to invoke Regulation 17(ii). He would further point
out that the concept of minimum charges would come into play only when, after the agreement is executed, power is availed of. There are
contingencies contemplated in Regulation 17(ii), which come into play. In this case, such contingencies have not occurred. As far as the Circular relied
on by the appellant is concerned, the argument is that this is not a case of change of tenancy or even mutation. This is a case of subrogation.
Therefore, there cannot be reliance placed on the same. He also lays store by Section 46 of the Electricity Act, 2003. It reads as follows:
“46. Power to recover expenditure- The State Commission may, by regulations, authorise a distribution licensee to charge from a person requiring a
supply of electricity in pursuance of Section 43 any expenses reasonably incurred in providing any electric line or electrical plant used for the purpose
of giving that supply.â€Â
We have already noticed and observed that there is a lot of correspondence, which is referred to by the parties in this case. Having regard to the
nature of the order we propose to pass, we do not wish to dwell upon it any further. We would think that the Writ Petition itself could not have been
maintained. This is a Writ Petition, which arises out of a contract. While it is true that the State cannot shake off its mantle as State when it enters
the commercial area and it would, notwithstanding its foray into the commercial field, continue to be saddled with the liability to act as State, it cannot
also be in the region of dispute that the area of interference for a Writ Court would become limited. After a party enters into an agreement with a
State, if there is any breach of the agreement, ordinarily, it is for the party to approach the competent forum, which may be decided under the
agreement and, if it is not specified under the agreement, as per the law of the land. A party approaching a writ court under Article 226 of the
Constitution of India in a contractual matter can successfully do so only if a contention is raised that the State has acted arbitrarily. A person may
have, in fact, two causes of action. If the cause of action, which is sought to be built up before the Writ Court, is that there has been violation of the
agreement, then certainly the party would be told off the gates on the basis that the proper remedy is before the competent forum, may be the Civil
Court or the Arbitrator, if there is an arbitration clause. The party may, in such a case, plead that the action of the State is absolutely arbitrary and,
therefore, occasions violation of Article 14. This may, in an appropriate case, where the facts are not much in dispute, give rise to an occasion for the
Court to examine the plea of arbitrariness. If there are disputed questions of fact, then the court would not exercise its discretion and resolve those
disputes. We need only notice one decision of the Hon’ble Apex Court in the case of Joshi Technologies International Inc. Vs. Union of India and
others reported in (2015) 7 SCC 728.Â
We would think that, in the nature of the case before us, the learned Single Judge ought not to have entertained the Writ Petition. In fact, we
notice that there is an arbitration clause. We must equally notice that the appellant did not specifically plead the arbitration clause in its pleadings, nor
does it appear to have been urged at the time of hearing. But, even then, we would think that, having regard to the nature of the case, it is appropriate
only that the judgment of the learned Single Judge be set-aside without prejudice to the right of the petitioner to seek remedy before the competent
forum. We do so.
Accordingly, we allow the Appeal. The judgment of the learned Single Judge will stand setaside. We make it clear that this will be without
prejudice to the right of the petitioner to seek remedy in any appropriate forum. We also make it clear that it will be open to the writ petitioner to seek
aid of Section 14 of the Limitation Act and it will be for the forum to decide the matter.
There will be no order as to cost.