K. N. Saikia, J. - (1.) This appeal by special leave is from the Judgment and Order of the High Court of Judicature at Patna, dated 10th March, 1983, in Civil Writ Jurisdiction Case No. 4581 of 1978 allowing the writ petition and quashing the electricity bills dated 25-5-1978 and the Order dated 24-5-1978 refusing to apply the Incentive Scheme, and directing the Bihar State Electricity Board, hereinafter referred to as 'the Board to restore electrical connections immediately on payment of fresh bills.
(2.) The Board entered into an agreement on 12-8-1974 with the respondents who are partners of M/s. Alakha Rubber Industry, hereinafter referred to as 'the firm', to supply 100 KVA electric energy to the firm. Cl. 4(c) of the agreement read thus: "The maximum demand charge for the supply in any month will be based on actual maximum KVA demand for the month or 75 per cent of the contract of the demand whichever is higher subject to provisions of Cl. 13. For the first 12 months service the maximum demand charge for any month will however be based on actual monthly maximum demand for that month." During the period from August 1974 to October 1975 as many as 15 monthly bills were submitted to the firm which, however, did not pay any of those bills. On 6-9-1975 the firm was intimated that a sum of Rs. 51,789/- was outstanding against them. Consequently on 16-10-1975, after giving the statutory 7 days' notice the electric connection was disconnected. Thereafter, in terms of aforesaid Cl. 4(c) of the agreement the minimum demand charges continued to be charged from the firm on the basis of 75 per cent of the contract of demand. After the disconnection was effected, it appears the firm also wrote to the Board asking for disconnection on the ground that floods had damaged their factory and they were not in need of electric energy. Notwithstanding the disconnection the firm was being charged the minimum demand charges on the basis of 75 per cent of the contract of demand, hereinafter referred to as the 'minimum guaranteed charges' and the outstanding rose to Rs. 92,213 /- by 24-4-1977. The electric connection was restored on 15-6-1977 on the firm's executing a fresh agreement dated 30-5-1977 and furnishing a fresh security deposit of Rs. 11,950/-. The firm submitted a representation to the Industrial Department of the State Government to take up the question of remission of current charges as well as for granting benefit under the Incentive Scheme in terms of the Government Resolution No. 16808 dated 29-9-1973. The Board allowed remission of minimum guaranteed charges under Clause 13 of the agreement for the financial year 1975-76 on account of flood damages caused to the firm, but rejected the claim in respect of years 1974-75 and 1976-77 and after adjustment on that account the firm's outstanding stood at Rs. 59,369.15p. The Government Resolution No. 16808 dated 29-9-1973 was amended in 1976 with effect from 1-4-1976 restricting the Government subsidy in respect of minimum guaranteed charges to a maximum of Rs. 1,000 /- only per year. The Electrical Executive Engineer of the Board wrote to the firm on 23-5-1978 demanding the arrear dues. On 19-4-1978 the supply line was again disconnected; and on 23-5-1978 the Board wrote to the firm that the Incentive Scheme could not be extended to it as the name of the Industry did not find mention in the list of registered small scale industries. On 25-5-1978 the firm was served with a bill for Rs. 1,06,795/- being the outstanding dues mainly for minimum guaranteed charges for the entire period minus the remission granted for 1975-76. The firm moved the High Court of Judicature at Patna for quashing the bills, for grant of the benefit under the Incentive Scheme and for restoration of the connection.
(3.) Before the High Court the Board contended that the disconnection on 16-10-1975 was on the firm's failure to pay the outstanding dues. The restoration thereafter was on execution of a fresh agreement and it was again disconnected on 19-4-1978 on the firm's failure to clear the outstanding dues. The High Court while considering the question as to whether the firm was liable to pay minimum guaranteed charges during the period of non-supply of electrical energy, took the view that the disconnection brought to an end the contract in so far as the minimum guaranteed charges were concerned and that both parties were discharged from further performance of the obligations under the contract and accordingly held that the firm was entitled to treat the contract as discharged. The High Court also held that the firm was not liable to pay minimum guaranteed charges for five years from 12-8-1974 till 12-8-1979 by virtue of the Incentive Scheme issued under S. 78A of the Electricity Supply Act; that it had no liability to pay minimum guaranteed charges from 12-8-1979 till date as there had been no supply of electrical energy to the firm, but the firm was liable to pay the energy charges in arrears. Further it was held that the bills submitted by the Board were composite, i.e. comprising legal and illegal charges and non-payment thereof could not disentitle the firm to seek rebate in making timely payment. The writ petition was accordingly allowed and the bills and the Order dated 24-5-1978 refusing benefit under the Incentive Scheme were quashed and the Board was directed to restore electrical connection immediately on payment of fresh bills presented within 15 days of the Judgment.;