Judgment Birendra Prasad Sinha, J. 1. The question for consideration is whether the petitioner is liable to pay the annual minimum guarantee charges even when there is no constant supply of electrical energy by the respondent-Board in terms of the agreement and/or in case where the agreement has been broken by disconnecting the line for non-payment of unauthorised charges ? 2. The petitioner is a partnership firm registered as a Small Scale Industry and is engaged in production of steel shots which is an import substitute. The factory is situated at Mihijam in the district of Santhal parganas. It is the only factory engaged in manufacture of steel shots in the State of Bihar according to the petitioner. Steel shots are manufactured through the medium of electric are furnance which needs constant power supply and any interruption and failure in the supply of electrical energy leads to solidifying of the molten or semi-molten steel. In view of the nature of production requiring constant power supply, this type of industry has been characterised by the respondent-Board as the priority sector to be fed by electricity continuosly. It is stated that this industry cannot accept any trippings or interruption in the process of its manufacture while the furnance is in operation. 3. On 21-1-1978 the petitioner-company executed an agreement with the respondent-Board in Form I. A copy of the agreement has been annexed as annexure 2 to the writ application. According to the agreement the respondent-Board agreed to supply and the consumer, namely, the petitioner-company agreed to take energy in bulk at the premises in the schedule annexed to the agreement for its own use subject to certain terms and conditions.
According to the agreement the respondent-Board agreed to supply and the consumer, namely, the petitioner-company agreed to take energy in bulk at the premises in the schedule annexed to the agreement for its own use subject to certain terms and conditions. Clause 1 (a) of the agreement, which is relevant, reads as under :- "the Board shall furnish to the consumer and the consumer shall accept at the point of supply mentioned in the schedule hereto on and from the date on which the said premises shall be connected with the supply distributing mains and during the continuance of the Agreement, a constant supply of electrical energy at the pressure of 400 kv-11kv Volts, 50 cycles, 3 phase 3 wire (under lined by me)alternating current system, subject to standard variation as provided in Indian Electricity Rules, 1956 or any other statutory modification thereof as may be in force specified as may be in force from time to time for the purpose and upto the maximum specified (hereinafter referred to as the Contract Demand) and under the conditions laid down in the Schedule. The Board will not however be responsible for any interruption or diminution or stoppage of supply due to lockouts, strikes, break-down of machinery or plant, floods or other force majeure or other causes beyond the control of the Board. " Clause 1 (b) provides that the consumer shall commence to take supply within three months of intimation from the Board to the effect that supply is available, falling which a month charge of 50% of the minimum guarantee by the consumer will be levied as penalty until the service is availed of. Clause 4 (a) requires the consumer to pay to the Board the minimum guarantee charges for the energy so supplied even though the energy to that extent has not been consumed. It reads as under :- "4 (a) The consumer shall pay to the Board for the energy so supplied and registered as aforesaid at the rates given in the schedule provided that the minimum charges as specified in the schedule appended hereto shall be paid irrespective of whether energy to that extent has been consumed or not. " (underlined by me)According to the agreement to character of service being A C 50 cycle 3 phase at 11 V K with a contract demand of 400 KVA.
" (underlined by me)According to the agreement to character of service being A C 50 cycle 3 phase at 11 V K with a contract demand of 400 KVA. The tariff applicable to the petitioner is General High Tension Service Symbol HT SI. Under the Head "special terms and conditions of supply" the energy charges is 25% load factor and 75% power factor on the contract demand. The tariff formulated by the respondent board is two part tariff system which comprises of (i) demand charges and (ii)energy charges for actual amount of energy consumed. Under the Act and tariff the consumer cannot exceed the consumption of electrical energy beyond the contract demand, but he is required to pay for his consumption the energy charges at the rate set out in the tariff. He is, however, required to guarantee a certain minimum consumption which he is supposed to consume and he has to pay the difference between the charges in respect of the energy actually consumed and the energy guaranteed to be consumed, even if the consumer fails to consume the said guaranteed energy. This is known as "annual" minimum guarantee charges" The annual minimum guaranted units are calculated in the following manner :in exercise of powers conferred under Sec.49 of the Electricity (Supply) Act, 1948, the Board has framed tariff subject to revision from time to time. After the constitution of the Board, the Government of Bihar in the Department of electricity, by a notification dated 16-11-1954 laid down certain terms and conditions for supply of electrical energy by Government Electricity Department. The said notification provided certain tariff as well as forms of agreement which a consumer is required to execute. Those terms and conditions of the 1954 notification have been adopted by the Board in the tariff. In order to appreciate the point it may be stated that so far as the energy charge is concerned it is actual eugery consumed to be paid at a particular rate. Annual minimum guarantee charge is a species of energy charge. It means that a consumer is supposed to consume a minimum of units per year of the energy supplied and even if the person fails to consume the said minimum units inspite of the energy applied, he has to pay as per tariff of energy charges.
Annual minimum guarantee charge is a species of energy charge. It means that a consumer is supposed to consume a minimum of units per year of the energy supplied and even if the person fails to consume the said minimum units inspite of the energy applied, he has to pay as per tariff of energy charges. Tf, however, the said minimum units are consumed every year the question of paying annual minimum guarantee charges does not arise. The annuul minimum guaranteed units and/or the value thereof are indicated in the schedule of the agreement. Clause 13 of the agreement provides that in certain conditions the demand charges and guarantee energy charge set out in the schedule shall be reduced. It reads as under :- "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 strikes, riots, fire, floods, explosions, act of God or any other cause reasonable beyond control or it has as if the board as prevented from supplying or is unable to supply such electrical energy owing to any of all of the causes mentioned above then the deman J charges and guaranteed energy charges 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. " 4. In the case of the petitioner the annual minimum guarantee units was fixed as 4,08,800 units. He was served with a bill dated 8-10-1979 for seven months and a sum of Rs.67,260-57 paise were sought to be realised as annual minimum guarantee charges. It was calculated in the manner indicated below. (Annual Minimum Guarantee) units being 4,08,800 actual consumption for the period beidg 13,140 difference = 3,95,651 units.3,95,651 X 17 paise = Rs.67,260.57 paise. A copy of the bill is annexed as Annexure-2/a. This shows that the petitioner had consumed during the period in question only about 3% of the aanual minimum guaranteed units having consumed 13,149 units but was sought to be charged for 3,95,651 units. 5.
A copy of the bill is annexed as Annexure-2/a. This shows that the petitioner had consumed during the period in question only about 3% of the aanual minimum guaranteed units having consumed 13,149 units but was sought to be charged for 3,95,651 units. 5. The petitioners case is that the power station of the Board was so illequipped that it had not the required transformer to make the required supply and on 10-11-1978 the respondent Board wrote to the petitioner that in view of absence of the required transformer the petitioner would be supplied energy only for 8 hours i. e. , from 10 P. M. to 6 A. M. The petitioner was directed to consume electricity only during that period (vide Annexure-3 ). There was no staff of the Board posted at mihijam to remove any fault occuring during the night and any repair could be effected from jamtar on the subsequent day. On 15-11-1978 the petitioner wrote a letter to the Assistant Electrical Engineer, Jamtara that according to the agreement the Board was supposed to supply power continuosly for 24 hours and in order to run the industry the petitioner was in need of continuous power supply. The petitioner pointed out various difficulties if the power supply was limited to 8 hours only and requsted to make continuous supply for 24 hours (vide Annexure-4 ). It is further stated that there were frequent trippings and interruptions and breakdowns which remained unattended for 48 hours and the power was not supplied continuously even during the 8 hours period. The result was that the industry was seriously affected. The petitioner went on requesting the authorities to improve the situation but unfortunately neither transformer was installed nor continous supply of electrical energy was restored nor any person was posted at Mihijam to attend faults occuring during the night. Ultimately the petitioner had to close the foundry since the electric furnace could not and did not operate under such conditions. On 16-12-1978 the petitioner was informed by the Board that it cannot be supplied continous electrrical energy as requested for and the petitioner had to confine its requirement only during 8 hours in night and as efforts were being made for installation of a transformer when the petitioner would be able to obtain energy for 24 hours (vide Annexure-5 ).
On 16-12-1978 the petitioner was informed by the Board that it cannot be supplied continous electrrical energy as requested for and the petitioner had to confine its requirement only during 8 hours in night and as efforts were being made for installation of a transformer when the petitioner would be able to obtain energy for 24 hours (vide Annexure-5 ). Even though there was no continuous supply of energy, bills for the minimum demand charges were sent to the petitioner. The bills could not be paid and the line was disconnected on 31-12-1978. It is stated that the petitioner acceded to the illegal demand under protest in the interest of the industry and the line was resorted on 2-7-1979. Even after the restoration of electrical energy the intermitent failure of the power continued and the petitioner could not start production in the steel foundry. It is alleged that load-shedding becomes the order of the day and petitioner requested the authorities by letter dated 7-8-1979 that as a measure of rationing the petitioner was prepared to consume the electrical energy for few days in a week instead of intermittent loadshedding and the petitioner may be given power supply for some days in a week constantly for 24 hours without interruption in order to enable the petitioner to start production (vide Annexur-8 ). On 10-8-1979 the Board intimated the petitioner that interruptions would continue as before and the Board could not assure continuous supply of energy (vide Annexure-9 ). On 12-10-1979 the petitioner received another bill dated 8-10-79 for the payment of annual minimum guarantee charges for the period from September, 1978 to March, 1979 demanding rs.67,260/-The petitioner disputed the liability to pay this amount contending that there could be no minimum charges as per the schedule of the agreement, the Board having not made available power at all during the period for which the bill had been raised. It was contended that the liability could only arise if the power was made available and the petitioner failed to consume the said power. It was pointed out that there were power cuts, trippings and loadshedding during the period and above all there was no arrangement for supplying the required power since a transformer of requisite capacity had not been installed.
It was pointed out that there were power cuts, trippings and loadshedding during the period and above all there was no arrangement for supplying the required power since a transformer of requisite capacity had not been installed. Instead of replying to the representation of the petitioner a notice was served on the petitioner on 5-11-1979 for disconnection of power supply. The petitioner came to this Court in C. W. J. C. No.3179 of 1979 which was disposed of on an assurance given by the Boards counsel that the representation of the petitioner would be disposed of within 2 months. But the line was, however, disconnected on 12-11-1979. The petitioner sent more than a dozen reminders between 29-2-1980 and 4-1-1981 and the Superintending Engineer assured the petitioner that the line would be restored on the basis of some undertaking given by the petitioner. The representation of the petitioner, however, was not disposed of and the factory remained closed since after 12-11-1970. The respondent Board, however, kept on raising bills regularly for the payment of minimum guarantee charges even though admittedly there was no supply of electrical energy from 12-11-1979 the date on which the line was disconnected. It is stated that after being energised on 24-9-1978 the line was first disconnected on 31-12-1978 which was restored on 2-7-1979 and the second disconnection was made on 12-11-1979 since when the factory remained closed. 6. A counter affidavit has been filed on behalf of the Board. It has been inter alia, stated that the agreement provides only for constant supply of electrical energy but it does not include the words "for the entire 24 hours". The agreement further provides that the Board will not be responsible for any interruption or demunition or stoppage of supply due to lock-out, strike etc. or causes beyond the control or the Board. The Board has tried to justify the failure in supplying the energy to be beyond its control. 7. It was submitted by learned counsel appearing on behalf of the petitioner that the scheme and formulla of calculating the charges of annual minimum guarantee involves continuous supply of power for 24 hours throughout and since the respondent Board had failed to do so the agreement stood terminated and there was no question of asking for payment for anything more than the energy supplied by the respondent Board and consumed by the petitioner.
It was further submitted that there could be no liability of minimum guarantee charges when there was disconnection of electrical energy and the bills raised for the period during which the line remaining disconnected were illegal. 8. From the materials on the record it transpires that electrical line of the petitioner-company was energised on 24-9-1978 and was first disconnected on 31-12-1975. The admitted position is that in between this period there was no constant supply of electrical energy. The line was reconnected on 2-7-19/9 and was again disconnected on 12-11-1979. In between 31-12-1978 and 2-7-1979 and after 12-11-1979 there was no supply of electrical energy at all as the remained disconnected. In between 31-12-1978 and 2-7-1979 also there was no constant supply of electrical energy. 9. There is no controversy that annual minimum guarantee charges is an essential part of the contract. Clause 4 (a) of the contract referred to above contemplates that in order to attract the liability the person liable must be and continue to be a "consumer" and the Board on its part must have "supplied energy". It is obvious that when there is no supply of energy the Board is not ready to serve the consumer and consequently the consumer is prevented from consuming energy. If a party is unable to perform his part of the contract for reasons not mentioned in the contract itself, it must be said that, that party had broken the contract. According to Clause l (a) of the agreement the Board may not be responsible for any interruption or diminution or stoppage of supply due to lock-out, strikes, break-down of machinery or plant, floods or other force maejure or other causes beyond the control of the Board. It is not the Boards case that interruption or diminution or stoppage of supply of electrical energy to the petitioner was for any of the reasons mentioned above. It is no doubt stated in the counter affidavit of the Beard that failure in supplying the energy was for the reasons beyond their control. It is not stated that were those reasons which were beyond the control of the Board. If there be any reason, it has to be shown that it was reasonably beyond the control of the Board.
It is not stated that were those reasons which were beyond the control of the Board. If there be any reason, it has to be shown that it was reasonably beyond the control of the Board. From the materials placed before me it is obvious that interruption or diminution or stoppage in supply of electrical energy was, if at all, due to sheer inefficiency and callous attitude adopted by the authorities of the Board and those responsible for the supply of electrical energy. If transformer for adequate supply of energy could not be installed it cannot be said that it was beyond the control of the Board. If a person was not posted at the spot for removing the faults during the night it was only a callous attitude of the Board authorities and no fault of the petitioner. As stated above the annual minimum guarantee units are worked out on the basis of contract demand multiplied by power factor, load factor and 24 hours constituting a day and 365 days constituting a year. Having entered into an agreement the Board never supplied nor was ever in the position to supply electrigal energy continuosly for 24 hours in a day and through-out the year when the agreement provides for constant supply of electrical energy. It means that the energy must be continuosly supplied without any break, interruption or trippings. It does not lie in the mouth of the Board to say that the agreement does not include the words "for the entire 24 hours". Failure to supply or immunity to supply electrical energy constantly i. e. for 24 hours a day and through-out the year for any of the reasons not mentioned in clause 1, in my opinion, immediately brings to an end the contract so far the annual minimum guarantee charges are concerned. The consumer cannot be saddled with any liability for the inefficiency and callousness on the part of the supplier. 10. So far the liability during the period in which the electrical line was disconnected i. e. between 31-12-1978 and 2-7-1979 and 12-11-1979 on words it is needless to say that the petitioner cannnot be fastened with any liability. During this period the admitted position is that there was no supply at all of electrical energy as the line had been disconnected.
During this period the admitted position is that there was no supply at all of electrical energy as the line had been disconnected. The disconnection was, however, on account of non-payment of the bills illegally raised, which the petitioner was not bound to pay. In the case of Rajeshwar Singh and others V/s. State of bihar and others, AIR 1983 Patna 194) a division bench of this Court in a similar situation held that disconnection at the instance of the Board amounts to renunciation of the contract and consumer is entitled to treat the contract as discharged. It was further held that in such a situation a consumer could not be saddled with the liability to pay the annual minimum guarantee charges for restoration of its electrical energy for the period when there was no supply of electrical energy. 11. To sum up I find that the petitioner is not liable to pay the annual minimum guarantee charges at all. The petitioner is liable only to pay for the energy actually consumed. In the circumstances the Board is directed to modify its bills in the light of my decision. The Board is further directed to supply the petitioner fresh bills after adjustment of payments, if any, made by the petitioner within one month from today. If there is any excess payment the petitioner should be intimated about it and the line be restored after treating the excess payment as advance. If there be any dues still to the petitioner his electrical energy should be immediately restored on clearing of the said dues. 12. In the result this writ application is allowed and Annexure-1 is quashed. The Board is directed to restore the electrical connection of the petitioner immediately on submitting fresh bills, if there be any dues, which must be presented by the Board to the petitioner within one month from today. There shall be no order as to costs. Petitioner allowed.