SRINIVASAN - (1.) I. RELEVANT FACTS.- The appellant in the earlier appeal of 1988 is a public limited company engaged in the manufacture of Vanaspathi. It entered into two agreements with Andhra Pradesh State Electricity Board hereinafter referred to as 'Board' on 1-9-1970 and 27-8-1973 for supply of High tension power. In January, 1976 the officers of the Board inspected the factory premises and noticed pilferage of energy. The power supply was immediately disconnected and a provisional assessment of the loss was made at Rs. 61,28,535.00. A prosecution was launched under Section 379 Indian Penal Code read with Section 39 of the Indian Electricity Act, 1910, hereinafter referred to as the Electricity Act in the Court of the Chief Metropolitan Magistrate, Hyderabad. The Board also initiated proceedings calling upon the appellant to file its objections to the provisional assessment. The appellant denied the allegations made by the Board. After enquiry, the final assessment was made fixing the loss at Rs. 55,72,511.81 Ps. The order was challenged by the appellant in appeal but in vain. The appellant filed a suit in the Court of Additional Chief Judge, City Civil Court (Temp), Hyderabad for a declaration that it was not liable to pay any amount as penal damages and prayed for a direction for refund of the amount of Rs. 22.50 lakhs collected by the Board during the pendency of the assessment proceedings and for perpetual injunction restraining the defendants therein from disconnecting the power supply.
(2.) THE suit was contested by the Board. Several issues were raised including one relating to the jurisdiction of the civil Court. THE trial Court held that it had jurisdiction to try the suit but negatived all the contentions of the plaintiff and dismissed the suit. On appeal, a Division Bench of Andhra Pradesh High Court rejected the pleas of the appellant and dismissed the same. THE High Court held that the terms and conditions of supply on the basis of which the agreements were entered between the appellant and the Board did not in any way contravene the provisions of either the Electricity Act or the Electricity (Supply) Act, 1948, hereinafter referred to as the Supply Act. It was also found that ample opportunity was given to the appellant before the final order of assessment was made and that the enquiry held by the officers of the Board was in no way vitiated. Aggrieved by the said decision of the High Court the appellant preferred the said appeal on obtaining Special Leave of this Court. The questions which were decided by the High Court in the aforesaid proceedings were raised again in Writ Petitions under Article 226 of the Constitution of India by some industrial undertakings which had also entered into agreements with the Board for supply of electricity. When proceedings were initiated by the Board against those industrial undertakings on the ground of pilferage of electrical energy and supply was disconnected pending enquiry, those undertakings filed Writ Petitions challenging the validity of such proceedings. In one of the writ petitions, an appeal was filed against an Interlocutory Order refusing to grant interim relief to the petitioner therein. When that appeal was admitted by a Division Bench the matter was placed before a Full Bench for disposal as the Division Bench opined that the view taken by the Division Bench in the Civil Appeal referred to earlier was likely to be in conflict with the "possible view that the contractual obligation upon the consumer of electricity that in case of a dispute as to the consumption, the adjudication shall be by the officers of the Board shall be deviative of Article 14 of the Constitution of India". Thus all the writ petitions and the writ appeals against interlocutory orders were heard by a Full Bench of three Judges and disposed of by a common judgment dated 12-9-1997. The Full Bench opined that the creation of the adjudicatory process by a contractual obligation in condition No. 39 of the 'Terms and Conditions of Supply' of electricity was wholly vitiated. The Full Bench observed that though there is no bar against the Board to recover compensation for the loss caused to it even when a consumer is prosecuted for the same offence under the Act, the enquiry into and estimate of the loss should be made by an independent and properly constituted body. Ultimately the Full Bench concluded its order as follows : "In view of the above discussion, we have no hesitation to hold that condition 39 of the conditions framed by the Board, to the extent it prescribes the procedure for adjudication of the dispute relating to pilferage or malpractice of energy and for final assessment of the additional charges, is ultravires of Sections 24, 26(6) and Cl. IV(3) of Schedule of the Act of 1910 and Sect. 49 of Act of 1948, and is wholly vitiated as being arbitrary and violative of Article 14 of the Constitution and is accordingly struck down. However, the contention of the learned Advocate General that the Board is empowered to regulate the supply of energy including the power of disconnection, on a prima facie satisfaction or suspicion of a conduct amounting to malpractice or pilferage of energy, appears to be unexceptionable. The Board is certainly within its limits to discontinue supply of energy on ground of including malpractice of pilferage of energy. The conditions in the agreements in Appendix III and IV also contain stipulation of disconnection of supply on suspicion of violation of conditions. Thus, if an allegation is made of malpractice or pilferage against the consumer and if the consumer denied the allegation and makes an application to the Electrical Inspector under sub-section (6) of Sec. 26 or Cl. IV(3) of the Schedule to the Act of 1910, and the Electrical Inspector, holds on preliminary facts, that he has no jurisdiction in the matter, then the Board is empowered to take such step as it may deem proper and appropriate including disconnection of supply and for restoration of supply on certain conditions. This action of the Board, is however, subject to the scrutiny by a Court of law".
(3.) IT is against the said judgment of the Full Bench the Board has filed the Civil Appeals Nos. 7139-7144 of 1997. All the appeals have been heard together as the contentions are common. For the sake of convenience, the parties will be hereafter referred to as the Board on the one hand and the consumers on the other. The chief argument advanced on behalf of the consumers is that condition number 39 in the 'Terms and Conditions of Supply' of electricity which are purely contractual is ultra vires the provisions of the Indian Electricity Act, 1910 hereinafter referred to as the 'Electricity Act' and Electricity (Supply) Act, 1948 hereinafter referred to as the 'Supply Act'. Alternatively, it is contended that even if the terms are statutory in nature, the condition is not valid. Thirdly, it is argued that the said condition is violative of Article 14 of the Constitution of India. Per contra, it is contended on behalf of the Board that it is performing a statutory obligation to supply electricity and has been empowered by the provisions of Section 49 of the Supply Act to impose such terms and conditions as it thinks fit. The conditions which have been so imposed including condition number 39 are statutory in character and are in no way contrary to the provisions of either of the enactments. The conditions are also quite reasonable and cannot in any sense be termed arbitrary and violative of the provisions of Article 14 of the Constitution of India. II. RELEVANT STATUTORY PROVI-SIONS ;