Ratenlal Muraka v. Kerala State Electricity Board — 1975 DIGILAW 26 (KER)

JUDGMENT V.P. Gopalan Nambiyar, J. 1. The petitioner is a consumer of electricity, to whom electric connection was, according to him, given on 10th July 1971 as will appear from Ext. P-10 produced with the reply affidavit. According to the Board, connection was given to him on 14th July 1971. The petitioner requested on 23rd September 1971 that the supply of electricity to his premises may be temporarily discontinued. The petitioner meter was disconnected temporarily on 23rd September 1971. But by Ext. P-2 notice dated 11th February 1972 the petitioner was called upon to pay minimum monthly charges at the rate of Rs. 312.83 for a period of one year from 16th July 1971. He replied by Ext. P-3 to say that he was not liable. But by Ext. P-4 he was informed that his contention that he, as consumer No. 2229 was only continuing the connection given to consumer No. 637 was not valid, was untenable, and that the accounts in respect of consumer No. 637 had been closed in all respects. Exts.P-7 and P-8 are two further notices which followed, threatening coercive steps under the Revenue Recovery Act against the petitioner. This writ petition is to a quash Exts.P-4, P-7 and P-8. 2. Petitioner Counsel argued strongly that the liability- to pay minimum charges per month was dependant essentially-upon the supply or me continued supply of electricity to the petitioner premises; and once supply had been temporarily discontinued at the petitioner request there can no longer be any further liability to pay the minimum charge. The Electricity Board has countered this argument by pointing to the contract entered into between the petitioner and the Board, a copy of which is produced as Ext. R-2. Clause 2 of the same reads: "2. The consumer shall pay to the Board on demand the minimum payment at the tariff rates in force for so much of any service line as may be laid down on placed for the purpose of supply beyond 15 metres from the nearest supply point of the Board. The board shall be at liberty to utilise the meter, cut-out, post or any portion of the service line of the consumer to give service connection to other consumers. The consumer shall not be entitled to any refund or reduction in charges on account of such service lines being taken by the Board. The board shall be at liberty to utilise the meter, cut-out, post or any portion of the service line of the consumer to give service connection to other consumers. The consumer shall not be entitled to any refund or reduction in charges on account of such service lines being taken by the Board. The consumer shall in addition, pay to the Board on demand the meter minimum or any other minimum charges at the tariff rates in force and the minimum guarantee amount for the extension of lines if any carried out by the Board for effecting supply to his premises". The agreement is dated 14th July, 1971. In his reply affidavit, the petitioner has come out with the case that a blank printed form was signed by the petitioner which was filled up and made to appear the form now taken by Ext. R-2. But so long as the petitioner has not chosen to deny the agreement evidenced by Ext. R-2 on proper pleadings and proper proof and the present proceedings under Article 226 of the Constitution being quite improper for the said purpose, I must proceed on the basis that Ext. R-2 represents a true copy of the agreement between the petitioner and the Board. 3. Cause 2 of Ext. R-2 above extracted affords no indication that the meter minimum or other minimum charges which the petitioner is liable to pay and which are in addition to the minimum guarantee are in any way dependent upon the supply or the continued supply of electricity to the petitioner premises. The contractual basis for the demand by the impugned notices thus appears to be clear and definite. 4. But the petitioner's counsel contended that the contractual term would not avail the Board if the same would be against the provisions of the statutes or the statutory rules. My attention was drawn to section 24 of the Indian Electricity Act, 1910 and to rule 17 (b) of Indian Electricity Rule, 1956 and annexure VI of the said rules. But these provisions and the other relevant statutory provisions have come in for judicial notice and examination. As pointed out by counsel for the Electricity Board, the statutory basis for sustaining the impugned demand can well be found in section 22 of the Indian Electricity Act and section 23 thereof which read as follows: "22. Obligation on licensee to supply energy. As pointed out by counsel for the Electricity Board, the statutory basis for sustaining the impugned demand can well be found in section 22 of the Indian Electricity Act and section 23 thereof which read as follows: "22. Obligation on licensee to supply energy. Where energy is supplied by a licensee, every person with in the area of supply shall, except in so far as is otherwise provided by the terms and conditions of the licence, be entitled, on application to a supply on she same terms as those on which any other person in the same area is entitled in similar circumstances to a corresponding supply. Provided that no person shall be entitled to demand, or to continue to receive, from a licensee a supply of energy for any premises having a separate supply unless he has agreed with the licensee to pay to him such minimum annual sum as will give him a reasonable return on the capital expenditure, and will cover other standing charges incurred by him in order to meet the possible maximum demand for those premises, the sum payable to be determined in case of difference or dispute by arbitration. 23. Charges for energy to be made without undue preference.- (1) A licensee shall not, in making any agreement for the supply of energy, show undue preference to any person. (2) No consumer shall, except with the consent in writing of the licensee, use energy supplied to him under one method of charging in a manner for which a higher method of charging is in force. (3) In the absence of an agreement to the contrary, a licensee may charge for energy supplied by him to any consumer (a) by the actual amount of energy so supplied, or (b) by the electrical quantity contained in the supply, or (c) by such other method as may be approved by the State Government. In Saila Bala v. Darjeeling Municipality A.I.R. 1936 Cal. 265 a learned Judge of the Calcutta High Court had occasion to consider the above statutory provisions. Adverting to section 23(3) (c) the learned Judge observed: "A minimum charge is not really a charge which has for its basis the consumption of electric, energy. In Saila Bala v. Darjeeling Municipality A.I.R. 1936 Cal. 265 a learned Judge of the Calcutta High Court had occasion to consider the above statutory provisions. Adverting to section 23(3) (c) the learned Judge observed: "A minimum charge is not really a charge which has for its basis the consumption of electric, energy. It is really based on the principle that every consumer installation involved the licence in a certain amount of capital expenditure in plant and mains on which he is to have a reasonable return. He gets a return when energy is actually consumed, in the shape of payments for energy consumed. When no such energy is consumed by a consumer, or a very small amount is consumed in a long period, he is allowed to charge minimum charges by his licence, but these minimum charges are really interest on his capital outlay incurred for the particular consumer. Clause (c) sub-section (3) section 23 accordingly in my judgment, does not authorise a licensee to levy minimum charges without any agreement with the consumer. I also fail to see how clause (c) can also be invoked by the Municipality to support its claim for minimum charges as the Local Government has not exercised their powers under that clause by the aforesaid notification issued by it. In my judgment clause 11 (a) of the schedule only empowers or authorises the licensee to levy minimum charges. That clause was inserted by the amendment of 1922 to remove doubts on the authority of the licensee to enter into contracts with intending consumers with terms for payment of minimum charges. But that power in my judgment can only be exercised by a licensee through a contract entered into with an intending consumer."� In this case, as we have noticed already, the contract R-2 is clear. The petitioner counsel attempted to argue that the discussion in the above case was with respect to the minimum guarantee and not with respect to the minimum charge. I cannot agree; and what is important to notice is the principle that the minimum charge is for the purpose of recoupment of the capital out-lay for providing supply lines to the consumer premises. The principle of the above decision was noticed and followed in Watkins Mayor and Co. v. Jullunder Elec. Supply Co. I cannot agree; and what is important to notice is the principle that the minimum charge is for the purpose of recoupment of the capital out-lay for providing supply lines to the consumer premises. The principle of the above decision was noticed and followed in Watkins Mayor and Co. v. Jullunder Elec. Supply Co. A.I.R. 1955 Punjab 133 by Division Bench of the Punjab High Court After noticing sections 22 and 23 of the Indian Electricity Act, 1910 the learned Judges extracted clause XI-A in the schedule of the Indian Electricity Act which reads as follows:- "XI.A. A licensee may charge a consumer a minimum charge for energy of such amount and determine in such manner as may be specified by his licence, and such minimum charge shall be payable notwithstanding that no energy has been used by the consumer during the period for which such minimum charge is made."� The above clause was as noticed by the Punjab decision, added to set at right doubts as to the legality of the minimum charge which was authoised by the licences. It was pointed out that minimum charge had long been enforced and had a substantial foundation, viz., that every consumer's installation involved the licensee in a certain amount of capital expenditure in plant and mains and labour on which he is entitled to a reasonable return. The English Court had ruled in Land Elec. Supply Corporation v. Priddis (1901) 18 T.L.R. 64 that such charges are legal and valid. In Natesa Chettiar v. Madras State Electricity Board 1969 (1) M.L.J. 69 the learned Judge in the Madras High Court had occasion to survey the decisions of the Calcutta and the Punjab High Courts referred to earlier. The question raised was again in regard to the liability of claiming minimum charge as an item of rent. Clause XI-A of the schedule to the Electricity Act was noticed as expressly authorising the levy of a minimum charge. But it was argued that this clause which was inserted in 1922 was deleted by Act 32 of 1959, and that therefore, with such deletion, the statutory basis for the levy of minimum charge had disappeared. The argument was rejected by learned Judge, and I think the rejection was quite right. But it was argued that this clause which was inserted in 1922 was deleted by Act 32 of 1959, and that therefore, with such deletion, the statutory basis for the levy of minimum charge had disappeared. The argument was rejected by learned Judge, and I think the rejection was quite right. It was pointed out that there was nothing in the relevant Acts (Indian Electricity Act and Electricity Supply Act) prohibiting the insertion of a clause in an agreement providing for the payment of monthly minimum charge. The statutory basis for the insertion of such a clause was also found in sections 22 and 23 of the Indian Electricity Act, 1910. In regard to the latter provision, viz, section 23 an argument was attempted before the Madras High Court that that section would be unavailable in view of section 26 of the Electricity (Supply) Act, 1948. The argument was met on behalf of the Board by pointing out that only sections relating to "duties and obligations"� of a licensee are excluded from their operation to the Board by the proviso. This appears to have provoked a reply from counsel for the consumer that other 'rights'� in the case of a statutory body were also to be construed as 'duties'. The learned Judge of the Madras High Court was not inclined to accept the argument of the consumer. Whatever it be, he pointed out that section 22 of the Electricity Act was sufficient to found a statutory basis for the demand of minimum charge. The learned Judge referred to section 70 of the Electricity (Supply) Act, 1948 which enacted that the said provision shall be in addition to, and not in derogation of, the Indian Electricity Act, 1910. Section 49 of the Electricity (Supply) Act provides:” "49. (1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs. Section 49 of the Electricity (Supply) Act provides:” "49. (1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs. (2) In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors, namely: (a) the nature of the supply and the purposes for which it is required; (b) the co-ordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee; (c) the simplification and standardisation of methods and rates of charges for such supplies; (d) the extension and cheapening of supplies of electricity to sparsely developed areas. (3) Nothing in the foregoing provisions of this section shall derogate from the power of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being licensee, having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and any other relevant factors. (4) In fixing the tariff and terms and conditions far the supply of electricity, the Board shall not show undue preference to any person.� This was found to afford a further statutory basis for the levy and imposition of the monthly minimum charge. I am in respectful agreement with the principle of the above decision. Being so, I do not see any ground to quash the impugned notices. I dismiss this writ petition, but without costs.