NIPHA STEELS LIMITED Vs. WEST BENGAL STATE ELECTRICITY BOARD
LAWS(SC)-2003-5-49
SUPREME COURT OF INDIA (FROM: CALCUTTA)
Decided on May 07,2003

NIPHA STEELS LIMITED Appellant
VERSUS
WEST BENGAL STATE ELECTRICITY BOARD Respondents

JUDGEMENT

- (1.) All these appeals involve identical disputes and, therefore, are taken together for disposal. The only issue involved is whether the monthly maximum demand charges for the supply of power was rightly demanded by the West Bengal State Electricity Board (hereinafter referred to as 'the Board') notwithstanding disruption and irregular supply of electricity by it.
(2.) According to the appellants (hereinafter referred to as 'the consumers') when the true essence of the agreement made between them and the Board was uninterruption and/or regular power of supply, analogy can be drawn from the deductions granted in respect of the minimum charges in case of disruption/interrupted supply. The plea found favour with a learned single Judge of the Calcutta High Court, but in appeal filed by the Board the view was reversed.
(3.) Factual background is almost undisputed and, therefore, a brief reference thereto would suffice. Consumers entered into the agreements with the Board for supply of power. The agreement in the standard form is common for all the appellants who are large industrial consumers. The agreements were in terms of the Indian Electricity Act, 1910 (in short 'the Act'), West Bengal Electricity Energy (Maintenance of Supply) Order, 1977 (in short 'the Order') and the Electricity (Supply) Act, 1948 (in short 'the Supply Act'). The appellants on receipt of bills from the Board took the stand that in view of interrupted supply of electricity, the demand of maximum demand charges at the rate fixed in the agreement was not proper. The agreement itself provided for remission under identical circumstances in respect of minimum charges under certain circumstances. There was no reason as to why the departure should be made in the case of maximum demand charges. It was pointed out that under certain circumstances notwithstanding the Board's inability to supply power without interruption, minimum charges were specifically provided to be payable. There was no such provision so far as maximum demand charges are concerned. Previously, Board used to grant remission even in respect of maximum demand charges and without any logic and/or basis the same was abandoned. Intention of the parties to the agreement can be clearly discerned from the fact that even in the absence of any specific prescription in the agreement, remissions were being granted. That is how the parties interpreted the agreement and to crystalise this understanding into a concrete form, the subsequent agreements contain clauses similar to those in respect of minimum charges. When the plea was not accepted by the Board, the High Court was approached and as noted supra the learned single Judge accepted the view but the Division Bench took a contrary view.;


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