BIHAR STATE ELECTRICITY BOARD Vs. M/S ICEBERG INDUSTRIES LTD
LAWS(SC)-2020-4-33
SUPREME COURT OF INDIA (FROM: PATNA)
Decided on April 27,2020

BIHAR STATE ELECTRICITY BOARD Appellant
VERSUS
M/S Iceberg Industries Ltd Respondents




JUDGEMENT

ANIRUDDHA BOSE, J. - (1.)These appeals are directed against a judgment of a Division Bench of the Patna High Court affirming in substance the decision of the learned Single Judge in disposing of three writ petitions in disputes arising out of obligation of the first respondent to pay certain sum categorised as Annual Minimum Guarantee (AMG) and certain other charges to the Bihar State Electricity Board. The appellant was the Board. The complaint of the first respondent, Iceberg Industries Ltd. (the company) over disconnection of their supply which they argued to be illegal was sustained by the Single Judge and it was also held by the First Court that the said company was not liable to pay AMG and certain other charges as per Board's computation. The judgment of the Division Bench was delivered on 7th February 2013. The company had entered into an agreement for supply of electricity with the appellant Board for contract demand of 1,000 KVA on 16th April 2004. This was for supply of high-tension electricity connection for setting up of a brewery. Supply to the company was energised on 06.05.2005. The dispute involved in the three writ petitions giving rise to these appeals originated from a bill for Rs. 27,11,814/- dated 17th April 2006. This was raised by the appellant towards AMG and was payable by 06.05.2006. The company did not make payment thereof within the prescribed date. Three disconnection notices, dated 15th May, and 26th May and 29th June 2006 on account of default in payment of AMG as also energy charges were issued by the Board. The company on 29th July 2006 made a representation for liquidating their dues on account of AMG in ten monthly installments citing certain business related difficulties. Part payment of the dues to the extent of Rs. 14,71,952/- was made. Next disconnection notice under Section 56 of the Electricity Act, 2003 (the Act) was sent to the company dated 23rd August 2006 for a sum of Rs. 33,38,572/- for non-payment of AMG as also on account of Delayed Payment Surcharge (DPS). Another bill was raised on 1st September 2006, the due date for which was 20th September 2006. The bill amount was Rs. 37,00,923/- and the bill heads were AMG, DPS as also energy charges. Supply to the company, however, was disconnected on 6th September 2006. There is some doubt as to whether such disconnection took place on 6th September or 8th September, but this variation is of little significance so far these appeals are concerned.
(2.)The factual background of the three petitions would appear from the recordal made in the following passages of the judgment under appeal:
"Subsequently a fresh bill was raised on 1.9.2006 which included arrears of AMG and DPS under the bill dated 17.4.2006 also for a total of Rs. 37,00,923/- along with current charges. The due date for payment was 20.9.2006. The Board disconnected supply on 6.9.2006 pursuant to the notice for disconnection dated 23.8.2006. The Board thereafter acted on the representation dated 26.8.2006 and granted facility of installments. An agreement was signed between the parties on 11.4.2007 for payment of AMG and DPS in installments. The connection was restored 7 months later on 16.4.2007. It is not in dispute that payments under the bill dated 17.4.2006 has then been made as agreed.

A fresh bill was thereafter raised by the Board on 4.5.2007 for Rs. 70,23,149/- as the minimum guarantee charge/base charge for the disconnected period of 1.11.2006 to 30.4.2007, along with AMG charge for the financial year 2006-07 (which also included charges for the disconnected periods of August, September, October 2006) of Rs. 18,02,582/-. The total bills thus raised was for Rs. 88,389,528/-. A fresh disconnection notice for non-payment of the same was issued on 22.5.2007. The industry moved the Forum under the Act. By order dated 12.2.2008 the Forum held the industry liable to pay minimum charges up to November 2006. The minimum charges from December 2006 to April 2007 were held to be bad. The Industry, to the extent it was aggrieved by the order, questioned it in CWJC 4637 of 2008. The latter part of the order was not challenged by the Board.

On 19.3.2008, a fresh disconnection notice was served for non-payment of Rs. 1.33 Crores inclusive of AMG and DPS for the period December 2006 to April 2007 disallowed by the Forum. The Board also refused to accept current consumption charges. Based on a demand contrary to the order of the Forum, the Board disconnected electric supply for the second time on 2.4.2008.

After it had disobeyed the order dated 12.2.2008 of the Forum CWJC 7314 of 2008 was filed by the Board on 5.5.2008 questioning the same. The writ petition did not disclose that the Board had already disobeyed the order and disconnected supply without raising fresh revised bills. No prayer for interim stay of the order of the Forum was made in the Writ Petition.

Pursuant to an interim deposit of 35 Lacs directed on 15.5.2008 in CWJC 4637 of 2008, electric supply was restored on 24.5.2008. A fresh bill was again raised on 22.5.2009 for Rs. 1.47 Crores along with notice for disconnection. It included AMG and DPS for the period disallowed by the Forum. It also included AMG and DPS charges for the subsequent disconnection from 2.4.2008 to 23.5.08. The industry challenged the same again before the Forum. The demand was stayed by the Forum on 12.6.2009. Without challenging the order of the Forum, the Board in complete disregard refused to accept even current payments, showed arrears of Rs. 1.82 crores and disconnected supply of the Industry again on 7.8.2009. CWJC 9742 of 2009 was preferred against the same by the Industry. Rs. 80 Lacs was deposited pursuant to the order of the Court, and electric supply was restored on 1.12.2009. The industry therefore also questioned AMG and DPS charge for the disconnection period from 7.8.2009 to 30.11.2009. Further payment of Rs. 40 Lacs has been made pursuant to interim directions in the present Appeals."

(3.)The Single Judge found the act of disconnection without considering the request for installments was unwarranted. It was held that such default on the part of the company did not constitute "neglect to pay" as contemplated in Section 56 of the 2003 Act. The fresh bill, which was raised on 1st September 2006 showed the due date of payment to be 20th September 2006. Disconnection was however made on 6th September 2006 on the basis of earlier notice of 23rd August 2006. This was held to be unjustified. The demands raised thereafter contrary to the order of the Forum constituted under Section 42(5) of the Act was also held to be illegal by the Single Judge.
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