1996 JTR(SC) 1061
1997 1 AllCJ 226 ; 1996 3 CLT(SC) 225 ; 1997 DNJ 45 ; 1996 7 JT 208 ; 1996 3 RCR(Civ) 531 ; 1996 5 Scale 686 ; 1996 6 SCC 202 ; 1996 Supp3 SCR 588 ; 1996 6 Supreme 532
1996(6) Supreme 532
SUPREME COURT OF INDIA
K. Ramaswamy and G.B. Pattanaik, JJ.
Bihar State Electricity Board -Appellant
versus
M/s. Bijoy Mining Company Ltd. & Ors. -Respondents
Civil Appeal No. 9843 of 1996
(Arising out of SLP (C) No. 14512/94)
Decided on 15-7-1996
Counsel for the Parties :
For the Appellant : Pramod Swarup, Advocate.
For the Respondents : Gopal Prasad and Ejaz Maqbool, Advocates.
Act Referred :ELECTRICITY SUPPLY ACT : S.49
A) The Electricity Supply Act, specifically section 49, is engaged in this matter through an agreement between the board and the consumer stipulating minimum guarantee charges for electricity supply. The contractual framework operates alongside the statutory obligation, where disputes regarding erratic supply and non-compliance with prior directives are assessed under the Act's provisions. The clause outlining force majeure and operational contingencies must be interpreted in light of the board's statutory duty to ensure proportionate billing, as previously directed by the High Court.
B) Key legal principles include the enforceability of minimum guarantee charges contingent upon actual supply, the necessity of compliance with a judicial directive to reassess bills, the role of force majeure in modifying obligations, and the finality of decisions made by the designated chief authority within the contractual structure.
Facts of the case:
The respondent entered into an electricity supply agreement with the appellant board, obligating the payment of minimum guarantee charges. The respondent later objected to the bill citing erratic supply and failure to meet required quantities. The High Court had previously directed the board to issue a fresh bill with a proportionate reduction, which the board did not comply with, prompting this appeal.
Findings of Court:
The court found that clause 13 of the agreement mandates a proportionate reduction in charges if supply is hindered by specified contingencies, with the decision of the chief engineer being final. It was held that without a proper application to the competent authority, the board is obliged to demand payment and the consumer liable to pay, subject to the chief engineer's subsequent determination.
Issues:
Whether the board was required to reduce the minimum guarantee charges due to erratic supply as previously directed; whether the respondent was bound to make an application to the chief engineer before disputing the charges; and whether the High Court had overstepped by allowing a fresh application without addressing the contractual hierarchy.
Ratio Decidendi:
The appeal succeeds because clause 13 provides for proportionate reduction only upon a proper application to the chief engineer, whose decision is final; the High Court's order granting liberty to make a fresh application was set aside as it bypassed the contractual dispute resolution mechanism.
Result:
The appeal is allowed, the order of the High Court setting aside the bill is set aside, and no costs are awarded.
A) The Electricity Supply Act, specifically section 49, is engaged in this matter through an agreement between the board and the consumer stipulating minimum guarantee charges for electricity supply. The contractual framework operates alongside the statutory obligation, where disputes regarding erratic supply and non-compliance with prior directives are assessed under the Act's provisions. The clause outlining force majeure and operational contingencies must be interpreted in light of the board's statutory duty to ensure proportionate billing, as previously directed by the High Court.
B) Key legal principles include the enforceability of minimum guarantee charges contingent upon actual supply, the necessity of compliance with a judicial directive to reassess bills, the role of force majeure in modifying obligations, and the finality of decisions made by the designated chief authority within the contractual structure.
Facts of the case:
The respondent entered into an electricity supply agreement with the appellant board, obligating the payment of minimum guarantee charges. The respondent later objected to the bill citing erratic supply and failure to meet required quantities. The High Court had previously directed the board to issue a fresh bill with a proportionate reduction, which the board did not comply with, prompting this appeal.
Findings of Court:
The court found that clause 13 of the agreement mandates a proportionate reduction in charges if supply is hindered by specified contingencies, with the decision of the chief engineer being final. It was held that without a proper application to the competent authority, the board is obliged to demand payment and the consumer liable to pay, subject to the chief engineer's subsequent determination.
Issues:
Whether the board was required to reduce the minimum guarantee charges due to erratic supply as previously directed; whether the respondent was bound to make an application to the chief engineer before disputing the charges; and whether the High Court had overstepped by allowing a fresh application without addressing the contractual hierarchy.
Ratio Decidendi:
The appeal succeeds because clause 13 provides for proportionate reduction only upon a proper application to the chief engineer, whose decision is final; the High Court's order granting liberty to make a fresh application was set aside as it bypassed the contractual dispute resolution mechanism.
Result:
The appeal is allowed, the order of the High Court setting aside the bill is set aside, and no costs are awarded.
ORDER
Leave granted.
2. Heard learned counsel on both sides.
This appeal by special leave arises against the order of the Division Bench of the High Court of Patna, dated September 21, 1993 made in CWJA No. 2811/93. Admittedly, the respondent had entered into an agreement with the appellant-Board for supply of electricity pursuant to which the respondent was required to pay the minimum guarantee charges. When a bill was issued, it would appear that the respondent had objected to the minimum guarantee bill on the ground that there was erratic supply of electricity and the Board was unable to supply required quantity of the electricity. Consequently, the respondent is not liable to pay the minimum guarantee under the contract. The High Court allowed the writ petition finding that on an earlier occasion the High Court in CWJC No. 3642/92 had disposed of writ petitions on February 25, 1993 directing the Board to raise fresh bill giving proportionate reduction in the annual minimum guarantee charges, but the same not being complied with it is not open to the Board to give the bill as impugned in the writ petition.
3. It is seen that clause 13 of the agreement provides as under :
"13. If at any time the consumer is prevented from receiving or using the electrical energy to be supplied under this agreement either in whole, or in part due to strike, riots, fire, floods, explosions, act of God or any other case reasonably beyond control or if the Board is prevented from supplying or unable to supply such electrical energy owing to any or all of the cause mentioned above than the demand charge and guaranteed energy charge set out in the Schedule shall be reduced in proportion to the ability of the consumer to take or the Board to supply such power and the decision of the Chief Engineer, Bihar State Electricity Board, in this respect shall be final.
Note : The term Chief Engineer includes additional Chief Engineer for the area concerned."
4. A reading thereof would clearly indicate that the Board is enjoined to give proportionate reduction provided any one of the conditions enumerated therein had occasioned. Obviously, an application in that behalf shall be required to be filed to the Chief Engineer of the Board who was required to investigate into the matter and then his decision shall be final. It would appear that a representation was made, but it is not clear whether it was to the Chief Engineer, the competent authority in terms of the agreement of any other officer. Under these circumstances, unless an application is made to the competent authority to investigate into the matter, the Board in terms of clause 13 of the contract is necessarily obliged to demand and the consumer is to comply with the payment of minimum guarantee amount in terms of the agreement, subject to the decision by the Chief Engineer. Accordingly, we set aside the order of the High Court giving liberty to the respondents to make an application afresh within a period of one month from the date of the receipt of this order to the Chief Engineer, Electricity Board. The Chief Engineer would enquire into and give the decision in that behalf. In the event, the Chief Engineer finds that the Board was responsible, then necessarily, in terms of clause 13, the proportionate reduction is required to be given to the respondents.
The appeal is accordingly ordered. No costs.
Appeal allowed.
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