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2006 DIGILAW 869 (BOM)

MAHARASHTRA STATE ELECTRICITY BOARD, KHAMGAON v. M/S SUREKA INDUSTRIES, KHAMGAON

2006-06-09

A.H.JOSHI

body2006
JUDGMENT :- At the first hearing on 29-11-2002 this Court has noticed the respondent that this appeal shall be decided at the admission stage since the only question which is to be decided is as to whether costs which are awarded are excessive or not. Appeal is admitted, and by dispensing Paper Book, the appeal is heard finally by consent of parties. 2. Appellants herein who are original defendants are challenging the exemplary cost of Rs. 25,000/- levied on them to be paid to the respondents Original plaintiff) by judgment and decree dated 30-3-2001, passed by Civil Judge, Senior Division, Khamgaon, in Special Civil Suit No. 75/1995. 3. The respondent is a proprietary concern doing the business of Oil Mill and who is a consumer of the appellant M.S.E.B. The controversy in this matter arose when the defendants issued a letter dated 19-10-1995 to the plaintiff for recovery of Rs. 2,80,650.97 on the ground that defendants have issued electricity bill to the plaintiffs taking into account a wrong multiplying factor, i.e., 'I' instead of 2', for the consumption of electricity by plaintiff Oil Mill between December, 1993 to August, 1995. This discrepancy in the setting of wrong multiplying factor in the meter was found by the flying squad of the defendants and was recorded in their report dated 20-9-1995. The said squad also found that the functioning of the meter was stopped though the mill was working. Accordingly the said letter claiming difference of under-billed amount along with the fresh bill was issued to the plaintiffs. Though the disputed bill is dated 6-111995, in which the due date of payment was shown as 30-10-1995. 4. Aggrieved by the said letter dated 6-11-1995 and the disputed bill, the plaintiff lodged a protest with the defendants by letter dated 24-11-1995 in which he represented that the amount claimed by defendants under the letter dated 1910-1995 was not acceptable to him and hence the said bill was sent back for furnishing proper and corrected bill. 5. On 17-11-1995 a corrected bill along with a notice of disconnection was issued by the defendants requiring plaintiff to pay the amount of Rs. 2,80,650.97 as bill adjustment on 30-11-1995. Interestingly, the corrected bill also showed the multiplying factor as 1' instead of 2' as claimed by defendants. 5. On 17-11-1995 a corrected bill along with a notice of disconnection was issued by the defendants requiring plaintiff to pay the amount of Rs. 2,80,650.97 as bill adjustment on 30-11-1995. Interestingly, the corrected bill also showed the multiplying factor as 1' instead of 2' as claimed by defendants. Plaintiffs therefore filed Suit for declaration and permanent injunction before the Court of Civil Judge (Senior Division), Khamgaon challenging the letter dated 19-10-1995 as well as the Bill dated 17-11-1995. This Suit was registered as Special Civil Suit No. 75/1995. The plaintiff deposited the disputed amount with the Court, as he failed to secure order of temporary injunction and therefore sought for refund of the said amount in the said suit. 6. Learned trial Court framed three issues, and the crucial issue on which fate of the suit depended was issue No.1, which reads as follows: "1. Does the plaintiff prove that the defendant issued incorrect bill of electricity to him?" 7. The learned trial Court found that report of the flying squad not only demonstrated regarding the wrong application of multiplying factor, but also showed the fact that at the time of spot inspection of the meter, the said meter was stopped, which was fortified by the deposition of witness, Shrikant, who happens to be brother of plaintiff. After appreciating the evidence, learned trial Court came to the conclusion that plaintiff had actually consumed the electricity energy as per the requirement though the meter was not functional. Trial Court further found that the plaintiff was not entitled to refund. Court found that plaintiff s grievance, if any was about negligence in issuance of proper bill by defendant Electricity Board, and that for any mistake in calculation of the bill, the plaintiff is not relieved from liability of payment of charges towards electricity energy consumed by him. The reasoning of the trial Court on this point does not require further attention of this Court in view of the fact that plaintiffs have not challenged the refusal of the said refund. 8. At the same time, i.e. while holding that plaintiff had duty to pay according to the bill which was raised, trial Court found that the Electricity Board was negligent and failed to verify correctness of the contents of the said bill as to application of proper multiplying factor commensurate with the category of consumer. 8. At the same time, i.e. while holding that plaintiff had duty to pay according to the bill which was raised, trial Court found that the Electricity Board was negligent and failed to verify correctness of the contents of the said bill as to application of proper multiplying factor commensurate with the category of consumer. The learned trial Court felt necessary that defendants be saddled with a cost in order to make the Electricity Board's employee realize that they have to be vigilant while issuing bills to the consumers, and accordingly saddled a cost of Rs. 25,000/- on the defendant Board to be paid to the plaintiff. 9. It is this judgment/decree for payment of costs that is challenged by the defendant Electricity Board. The ground of challenge is that issue of wrong bill was a case of bona fide mistake on the part of the employees of the defendant, and moreover, the bill was issued towards rightful and legally recoverable dues, and the defendants had succeeded in the said litigation. Therefore, the learned trial Court ought not have imposed a cost on defendants. In alternative, the defendants took the ground that the cost levied was excessive, disproportionate and unjust, and prayed for setting aside the judgment and decree passed in Special Civil Suit No. 75/95. 10. In this background, the limited question for this Court to answer in this First Appeal is ;- Whether the learned trial Court was justified in awarding exemplary costs on the defendants though the suit was decided in their favour? 11. The learned Advocate, Mr. R. E. Moharir for the appellants submitted as follows ;- (a) The learned trial Court could not have imposed cost against the Electricity Board though it has become successful in their defense and have won the lis. (b) The learned Advocate of the defendants further submits in the alternative that the cost imposed was excessive and disproportionate. (c) Section 35 provides no limit on the Courts to impose cost; however, the cost imposed should not be disproportionate; (d) Whenever a Court awards costs on the higher scale, it is required that it should provide "special reasons" for the same. In the instant case the learned trial' Court has imposed a cost of Rs. 25,000/which is claimed by the defendants to be excessive and disproportionate. In the instant case the learned trial' Court has imposed a cost of Rs. 25,000/which is claimed by the defendants to be excessive and disproportionate. (e) The bill of costs provided on page 21 of the judgment dated 30-32001 shows that the expenses incurred by plaintiff (plaintiff herein) was Rs. 7,756/-. (f) There was no specific prayer of plaintiffs for grant of exemplary cost. Any details of special cost, if any, already incurred by the plaintiff were brought on record of trial Court. (g) The compensatory cost provided under section 35-A of the Civil Procedure Code the maximum amount can be awarded up to Rs. 3000/-. 12. Learned Adv. Madkholkar appearing for the plaintiff argued in support of the decree. Learned Advocate has not disputed the fact that the decree of trial Court in dismissing the suit has been accepted/connived at by the plaintiff. Learned Advocate for plaintiff has placed reliance on the judgment of S. A. Jais and Company and others vs. The Gujarat Electricity Board, reported in AIR 1988 SC 254 , to bring home the point that trial Court order of awarding costs should not be interfered with as it enjoys considerable discretion in awarding costs. 13. For dealing with the issue at hand effectively, it would not be necessary to briefly refer to the provisions of law relating to costs. The Code of Civil Procedure 1908 deals with the subject of costs in following provisions :- a. General Costs (section 35) b. Compensatory Costs for false and vexatious claims or defenses (section 35-A) and c. Miscellaneous Costs (Order 20A) d. Costs for Causing Delay in the process of trial and hearing (section 35-B) e. Para 639 and 639-A of Civil Manual issued by The High Court of Judicature (Appellate Side) Bombay. 14. Section 35 of the Civil Procedure Code runs as follows: "(1) Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incident to all suits shall be in the discretion of the Court, and the Court shall have full power to determine by whom or out of what property and to what extent such costs are to paid, and to give all necessary directions for the purposes aforesaid ... " Plain reading of section 35 reveals that the Court has full power to determine by whom or out of what property and to what extent such costs are to be paid. Normally the successful party, either be the plaintiff or the plaintiff will be entitled to be compensated with the costs incurred by him in the litigation. 15. Section 35-A of Civil Procedure Code provides for Compensatory Costs for false and vexatious claims or defenses and the maximum amount which can be awarded under this section is Rs. 3000. 16. Order 20-A makes specific provision with regard to the power of the Court to award costs in respect of certain expenses incurred in giving notices, typing charges, inspection of records, obtaining copies and producing witnesses. Thus, it can be observed that Courts enjoy considerable discretion in awarding costs to the parties of the suit. 17. Para 639 of Civil Manual issued by The High Court of Judicature (Appellate Side) Bombay for the Guidance of the Civil Courts and their Subordinate Officers, deals with the provisions relating to cost. This paragraph lists the specific or implied reference to costs made in various parts of the Code. for e.g. Order IX, Rules 6(2), 7, 9 and 13; Order XI, Rules 3, 15 and 18(2); etc. 18. There was no specific provision in Civil Procedure Code or Civil Manual containing any guidance for the Courts to follow while awarding costs, though clause 639 contained in some provision. This situation was remedied by inserting Paragraph 639-A, by No. P-070312005, dated 30-12-2002, which provides ;- "Wherever costs are directed to follow result of the cause, the Court shall set out actual reasonable cost which a successful party might have incurred. Such reasonable cost shall include the cost/compensation of the time spent by the successful party, expenditure towards transportation and lodging, notionally/actually required by successful party if residing at outstation and any other incidental cost besides the payment of the Court fee, Advances fee, typing and other cost in relation to the litigation. Such reasonable cost shall include the cost/compensation of the time spent by the successful party, expenditure towards transportation and lodging, notionally/actually required by successful party if residing at outstation and any other incidental cost besides the payment of the Court fee, Advances fee, typing and other cost in relation to the litigation. The Court shall not vaguely pass order under section 35(2) and the details of such cost may be included in the separate paragraph of the judgment itself or may be mentioned in the final order or may be setout in a separate table showing each item, which shall be treated as part of the judgment." Hence, while imposing the cost the Court has to setout and provide a reasonable cost to a successful party. Thus, the aforesaid provisions presuppose that cost would be awarded to the successful party. However, the Court has the discretion to award or refuse cost to successful defendant where a "sufficient cause" exists. 19. Section 35-B deals with costs for causing delay and is a device in the hands of the learned judges to put a check upon the delaying tactics of litigating parties. 20. In the instant case, the learned trial Court held in favour of the defendants as to merits of suit, however, imposed a cost of Rs. 25,000/- payable to the plaintiffs. The learned trial Court imposed the said cost on the premise that the defendants were found negligent in issuing the electricity bills of lesser amount initially and causing inconvenience to the plaintiffs, who have to come before the Court for redressal. Moreover, trial Court was of the view that saddling of cost on the defendants would give a sense of responsibility and will improve the conduct of the defendants in issuing bills. 21. Here, it is important to note that the fact of negligence on the part of defendant Board cannot be denied. The defendants have tried to gloss their negligence with the words 'bona fide mistake'. While it is alright to say that plaintiff (respondent herein) should not suffer due to the negligence of defendants, the plaintiff has to prove actual sufferance. Here, it is important to note that the fact of negligence on the part of defendant Board cannot be denied. The defendants have tried to gloss their negligence with the words 'bona fide mistake'. While it is alright to say that plaintiff (respondent herein) should not suffer due to the negligence of defendants, the plaintiff has to prove actual sufferance. The learned trial Court has rightly held that a consumer cannot benefit from the mistake in calculation of bill by the employees of the Electricity Board, and as an essential corollary thereof found that the plaintiff s suit was without cause of action, and erroneous to his knowledge. 22. Going through the plaint of the plaintiffs, nowhere it appears that they have claimed any damages from the defendants for their negligent conduct in issuing wrong bill, i.e., bill of amount lesser than actual or previous average of consumption. No prayer of exemplary cost is made. In absence of any specific plea and proof of specific damages and a prayer of exemplary cost it was not proper much less incumbent upon the learned trial Court to grant an exemplary cost of Rs. 25,000/-. Moreover, absence of pleading and prayer for this relief results in denial to the defendants an opportunity of fair defense against such claim, particularly when a decree of such costs is passed ... 23. This Court finds no sufficient force in the argument of the respondent plaintiff in view of the circumstances of the case. From the evidence on record it can be seen that defendants had initially issued bills to the plaintiffs taking into account wrong multiplying factor. This discrepancy was corrected. Even the corrected bill noted the multiplying factor to be 'I "which had to be 2' as regards the plaintiff's consumption of electricity in oil mill. If the flying squad would not have inspected the meter of the plaintiffs, it would not have found the said discrepancy and there could have occurred a continuous loss of revenue. This failure or fault or negligence of the defendants resulted in the current dispute which plaintiff had to pursue to redress his grievance. In view of the above circumstances, while on one hand the approach of trial Court may be appropriate to the extent that employees of Board need to be chastised, yet on the other hand it cannot be done by ordering costs against the Board. 24. In view of the above circumstances, while on one hand the approach of trial Court may be appropriate to the extent that employees of Board need to be chastised, yet on the other hand it cannot be done by ordering costs against the Board. 24. Hence, this Court finds sufficient force in the arguments of the learned Advocate for the defendants and considers that interference is required with the discretionary power of the learned trial Court to impose cost solely on the ground that plaintiffs initially neglected the duty while issuing wrong bill of lesser amount. The view taken by trial Court appears to be based on hyper-technicality. In fact, once it is found that plaintiff's suit was liable to be dismissed, costs in favour of defendants ought to have followed. Court, however, had discretion of not awarding that· costs to the defendant. However, on the contrary awarding of costs against defendant to be provided to the plaintiff on facts of this case is found to be erroneous. 25. In case of The Trustees of Port of Bombay vs. The Premier Automobiles Ltd., and another, reported in (1974) 4 SCC 710 , Justice Krishna Iyer (as he then was) speaking for the Court observed that as regards the matter of cost the law cannot be rigid. Under Para 67 the following observation is of significance. "We have to make compromise between pragmatism and equity and modify the laser-pays-all doctrine by exercise of a flexible discretion. The plaintiff in this case need not be a martyr for the cause of the certainty of law under section 87 of the Act, particularly when the defendant wins on a point of limitation. (The trial Court had even held the defendant guilty of negligence)." In this view of the matter, it does not matter if defendants are not provided costs from the plaintiff. 26. This Court finds that the judgment relied upon by the plaintiff does not help the plaintiff for the reasons discussed above. 27. In view of the aforesaid discussion, though the defendant Board is not exonerated from the fault of failure to issue correct bill, the decree of costs passed by trial Court cannot be sustained as passed as jurisdictional facts therefore do not exist at all. Plaintiff had not suffered any loss or damage or injury. 27. In view of the aforesaid discussion, though the defendant Board is not exonerated from the fault of failure to issue correct bill, the decree of costs passed by trial Court cannot be sustained as passed as jurisdictional facts therefore do not exist at all. Plaintiff had not suffered any loss or damage or injury. In fact, he had used the money towards electricity energy actually used, and paid the dues by instalment and comfortably. Thus plaintiff was benefited by delay caused in raising correct bills than put to any loss or harassment. Even the Board could have willingly granted him the instalments, had he applied for. Therefore, the decree under appeal is passed contrary to settled cannons of ordering costs and on facts of the case, any amount of costs to plaintiff is not justified. 28. The decree under appeal is accordingly set aside, and this Court orders that costs of suit as well as this appeal be suffered by respective parties. The decretal amount deposited by appellant be refunded. Appeal allowed.