Shakti Cold Storage v. Bihar State Electricity Board
2008-08-12
RAMESH KUMAR DATTA
body2008
DigiLaw.ai
Judgment Ramesh Kumar Datta, J. 1. Heard learned Counsel for the petitioners and learned Counsel for the Bihar State Electricity Board. 2. The petitioner has approached this Court for setting aside and quashing the provisional punitive bill dated 11.6.2008 raised pursuant to the F.I.R. lodged by the informant, Assistant Engineer, Electric through memo No. 142 dated 10.6.2008 and other consequential developments and actions pursuant to the said provisional punitive bill. 3. The facts of the case, which lie within a narrow compass, are that on 16.3.2007 an electrical meter for the purpose of reading the consumption of electrical energy in the premises of the petitioner was installed. The said meter was supplied to the petitioner by the respondent-Board and to the Board by M/s. Secure Meter Limited. On the said meter being found not functioning by the authorities of Page 3007 the Board, the same was inspected by the Boards authorities along with the representatives of M/s. Secure Meter Ltd. on 16.5.2007 and it was decided to replace the same. Accordingly, a new meter was installed in the petitioners premises and the said defective/non-functional meter was taken away by the authorities of the Board. After more than a year a letter dated 29.5.2008 was served upon the petitioners stating that the defective meter has to be sent to the supplier M/s. Secure Meters Ltd.s highly equipped sophisticated and technically suitable Laboratory for proper analysis of type and cause of defect. It was informed that the meter was to be sent for analysis and data retrieval to the works of M/s. Secure Meter Ltd. at Udaipur, Rajasthan for which, the date and time was fixed as 6.6.2008 at 11 A.M. A request was made to the petitioners to depute their authorized representative to witness the said analysis. The petitioner claims to have made a protest with respect to the meter being sent to the M/s. Secure Meter Ltd.s Laboratory as also that the investigation ought to have been made within a reasonable time by its letter dated 30.5.2008, but the same is denied by the authorities of the Board contending that, as a matter of fact, the said letter is an after thought which was received in the office of the Board on 17.6.2008.
Be that as it may, the authorities of the Board proceeded with the analysis of the said meter at M/s. Secure Meters Ltd. as a result of which it was found that NIC seal of the meter body was tampered, ultrasonic welding side plates were opened and again pasted using glue and the Holographic paper seal provided by manufacturer on meter body was tampered which indicates that the meter was opened by some one and it was further found that the snap of plastic bezel, lock washer for PCB holding, plaster washer below screw and mylar tape of CT housing was melted which indicated that the internal circuitry was damaged by applying external heat. The conclusion drawn from the analysis was that the meter was opened and damaged by external heating. 4. On the basis of the aforesaid analysis report, an FIR was lodged by the authorities of the Board being Hawai Adda P.S. Case No. 52/2008 dated 10.6.2008 under Section 420 I.P.C. and Section 135/138 of the Electricity Act for the offence of theft of electrical energy. Simultaneously, a punitive bill was raised against the petitioner which was assessed at Rs. 8,04,975.50/- and after deducting the payment already made by the petitioner for energy consumption of assessed period, i.e., 16.3.2007 to 16.5.2007 amounting to Rs. 1,67,535, the balance amount of Rs. 6,37,440.50/- was directed to be paid by the petitioner in the said provisional punitive bill which farther included an amount of Rs. 30,000/- as cost of meter including the meter removal and fixing. 5. It is the stand of the petitioners that under the threat and coercion of disconnection of electric supply to the Cold Storage, the petitioner agreed to pay of the entire dues under the punitive bill in five instalments of which the first instalment of Rs. 1,67,500/- was to be paid immediately and, as a matter of fact, it was paid by the petitioner and the rest amounts were to be paid in four equal instalments till 11.10.2008, out of which the payment against the second instalment dated 11.7.2008 has also been made during the pendency of the writ application. 6. Mr.
1,67,500/- was to be paid immediately and, as a matter of fact, it was paid by the petitioner and the rest amounts were to be paid in four equal instalments till 11.10.2008, out of which the payment against the second instalment dated 11.7.2008 has also been made during the pendency of the writ application. 6. Mr. Y.V. Giri, learned Senior counsel for the petitioners, submits that the petitioners had no option but to succumb to the dictates of the authorities of the Electricity Board in the matter, otherwise their electrical connection for the Cold Storage would have been disconnected as a result of which they would have suffered a great loss Page 3008 on account of spoiling of potatoes kept in the Cold Storage by the farmers of the area. It was under such condition that the petitioners had succumbed to the threats of the authorities of the Board and agreed to enter into an agreement dated 11.6.2008 for payment of amounts in five instalments. 7. The principal submission of learned Counsel for the petitioner is that on 16.5.2007 when the defective meter was replaced by another one, there was no allegation of tampering of seal, etc. either by the authorities of the Board or by the representatives of M/s. Secure Meter Ltd., who were admittedly present on the spot. In this regard, learned Counsel for the petitioners refers to Annexure-1, which is the Installation and Commissioning Certificate of HT Meter dated 16.5.2008 in which it is stated that the meter was inspected by M/s. Secure Meter Ltd. and it was decided by them to replace with a new meter and, accordingly, the meter was replaced by a new meter and the old meter was taken back by M/s. Secure Meter Ltd. It is thus, contended that having found the meter in order on 16.5.2006, when it was taken out without any allegations and replaced by another meter, it was not open to the respondents to have, after a gap of one year, informed and analysed defects of the meter when no such defect was pointed out at the time of replacing the meter. It is argued that the defective meter, which was taken out, was not sealed in the presence of the consumer-petitioners, which is the requirement of a fair procedure and the same has also been adumbrated in the Bihar Electricity Supply Code, 2007.
It is argued that the defective meter, which was taken out, was not sealed in the presence of the consumer-petitioners, which is the requirement of a fair procedure and the same has also been adumbrated in the Bihar Electricity Supply Code, 2007. It is contended that the defective meter not having been so sealed in the presence of the petitioner, it was not open to the authorities of the respondent-Board to have at all sent it for being tested by anyone, more so by M/s. Secure Meter Ltd. which was an interested party in the matter. 8. Learned Counsel for the petitioners further submits that in terms of Section 8. 14(c)(iii) any testing of the meter can be carried out at the licensees (Electricity Board) Lab/independent Lab/Electrical Inspector as agreed by the consumer, i.e., the petitioners in the presence of the representatives of both the licensee and the consumer. It is stated that in the present matter, no such consent or agreement of the petitioner was taken when the defective meter was sent to the Laboratory of the Manufacturer/supplier which itself is contrary to the provisions of the Bihar Electricity Supply Code. Hence, any such report received from the said Laboratory cannot be used against the petitioners on any count that too for raising a punitive bill against them. 9. It is the alternative contention of learned Counsel for the petitioners that even in the provisional punitive bill raised by the Board, the Board has not acted fairly in the matter, since it has charged in the said punitive bill for all the units, including the units for which payment has already been made by the petitioners in the year 2007 itself. It is thus, submitted that only after deducting the units, i.e., 39420 units from the assessed units of charge, the punitive bill should have been raised by the authorities of the Board. 10. It is also the alternative submission of learned Counsel for the petitioner that at best it can be a case of defective meter for which the bill is to be raised under Clause 9.16 of the Electricity Supply Code, 2007. 11.
10. It is also the alternative submission of learned Counsel for the petitioner that at best it can be a case of defective meter for which the bill is to be raised under Clause 9.16 of the Electricity Supply Code, 2007. 11. It is contended that the petitioner cannot be forced to comply with the so called agreement dated 11.6.2008, since the same was the result of threat, coercion and force upon the petitioners, who had no option but to see that the Cold Storage could run, which was not possible without the supply of electricity. Page 3009 12. In support of the same, learned Counsel for the petitioner relies upon a decision of the Supreme Court in the case of Central Inland Water Transport Corporation Ltd. and Anr. V/s. Brojo Nath Ganguli and Anr. in paragraph No. 90 of which it has been laid down as follows: The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality Clause in Article 14. This principle is that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties, who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon Page 3012 the terms imposed by the stronger party or go without them.
It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon Page 3012 the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In todays complex world of giant corporations with their vast infrastructural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The Court must judge each case on its own facts and circumstances. 13. Learned Counsel also relies upon a decision in the case of Lloyds Bank V/s. Bundy (1974) 3 All ER 757. The said decision has also been relied upon by the Apex Court in Central Inland Water case (supra) in paragraph 84 of the judgment. 14. Learned Counsel farther relies upon the decision of the Supreme Court in the case of Secretary- cum-Chief Engineer Chandigarh V/s. Hariom Sharma and Ors. in which the same principle of non-enforcement of a contract in a case of unequal bargaining power has been reiterated. 15. Mr. Chitranjan Sinha, learned Senior Counsel appearing for the Bihar State Electricity Board, on the other hand, contends that the authorities of the Board have acted throughout in a fair and reasonable manner, whereas it is the petitioner whose conduct has been found reprehensible throughout. It is stated that despite the meter not functioning, the petitioner never reported the said matter to the authorities of the Board.
It is stated that despite the meter not functioning, the petitioner never reported the said matter to the authorities of the Board. It was only discovered on account of inspection by the officer of the Board that the meter was non-functional and thereafter the officials of the Board along with the Page 3010 representatives of M/s. Secure Meter Ltd. went to the spot and replaced the meter in good faith with a new meter, as ostensibly nothing wrong was found by them. However, it is pointed out that the manipulations made by the petitioners were all internal in nature, which could not have been detected by the naked eye and thus no action was taken at the said time. However, when subsequently more than a dozen meters were reported as defective, the Board decided to check all the meters in the Laboratory of M/s. Secure Meters Ltd. Before doing the same, the Board issued notice to the petitioners on 29.5.2008 indicating the date, time and place where the analysis would be carried out, but the petitioners neither responded to the said letter nor sent their representatives at the place and time mentioned in the Boards letter dated 29.5.2008. Thereafter on testing at the said M/s. Secure Meters Ltd. the aforesaid discrepancies were found which clearly show tampering by the petitioners with the said meter. Accordingly, the authorities of the Board acted in the present matter by issuing the provisional punitive bill since the said action of tampering by the petitioners amounted to theft of electricity, apart from taking action of the penal provisions by filing the F.I.R. 16. It is further submitted by learned Counsel that the petitioners had themselves filed an application dated 11.6.2008 before the Board in which they had agreed to deposit 25% of the provisional punitive bill immediately and prayed for grant of instalments for the remaining amounts. On the basis of the said application, the authorities of the Board having agreed to the same entered into the agreement dated 11.6.2008. It is submitted that the petitioners, having accepted the order of the Board and acted upon it, cannot be permitted to invoke the jurisdiction of this Court to set aside the said agreement.
On the basis of the said application, the authorities of the Board having agreed to the same entered into the agreement dated 11.6.2008. It is submitted that the petitioners, having accepted the order of the Board and acted upon it, cannot be permitted to invoke the jurisdiction of this Court to set aside the said agreement. Learned Counsel for the Board also harps upon the letter dated 30.5.2008 sent by the petitioners alleging that since the same has been shown to be received in the records of the Board on 17.6.2008, no benefit can be derived by the petitioners on the basis of the said letter. 17. In support of his proposition, learned Counsel for the Board relies upon various decisions of the Supreme Court, in the cases of Kumud Kumar V/s. Central Bank of India and Anr. , Pravir Banerjee V/s. Union of India and Ors. and in the Central Indland Water Corporation (supra). He also relies upon a decision of this Court in the case of Barauni Paper Industries Ltd. V/s. Bihar State Electricity Board and Ors. 2000 (4) PLJR 75 . 18. In the facts and circumstances of the case, this Court finds sufficient force in the submissions of learned Counsel for the petitioners. It is evident that the meter itself had been removed and replaced by a new meter on 16.5.2007. On that date, the meter had been inspected not only by the officials of the Board but also by the supplier M/s. Secure Meters Ltd. and on such inspection, it was merely decided that the meter being defective should be replaced and no suspicion was expressed by the authorities of the Board regarding the meter being defective or their suppliers regarding the meter having been tampered with and no proposal was made that the same is required to be tested at any accredited Laboratory. In fact, if it had been so proposed, under the principles of fairness, it would have been obligatory for the Board to seal the said defective meter in the presence of the consumer-petitioner and thereafter send the same for being tested at the accredited Laboratory or its own Laboratory or by the Electrical Inspector. The same has also been provided, though subsequent to the date of occurrence on 16.5.2007 but prior to the date of sending the meter for testing, Page 3011 in the Bihar Electricity Supply Code, 2007.
The same has also been provided, though subsequent to the date of occurrence on 16.5.2007 but prior to the date of sending the meter for testing, Page 3011 in the Bihar Electricity Supply Code, 2007. In such matter, the reasons for such procedure are evidently that in case the said defective meter is taken away without the same being sealed in the presence of the consumers, it would be open to tampering wherever it is kept, whether in the custody of the authorities of the Board or that of the Supplier. In the present matter, whether actual tampering has taken place or not is not the real issue, rather the main question is that the meter not having been sealed in the presence of the consumer when it was taken away could be open to tampering. Thus any test/analysis report made subsequently, would be always open to serious challenge as being not authentic and any tampering found upon such analysis cannot be reasonably attributed only to the consumer. 19. In the present matter, not only the defective meter had not been sealed in the presence of the petitioner, rather no decision at all had been taken for its test at an accredited Laboratory when it was removed and the same was allowed to remain in the custody of the Board/their Supplier for more than a year. Hence, the authorities of the Board cannot be permitted to draw the inference that the same must have been tampered by the petitioners. 20. In the said circumstances, the said analysis report dated 6.6.2008 is not fit to be relied upon for the purpose of acting upon it and raising a punitive bill against the petitioners holding that manipulations have been committed by the petitioner which amount to theft under the provisions of the Electricity Act. 21. There is another serious objection for testing of the meter at the Laboratory of the supplier, M/s. Secure Meter Ltd. in question. It is evident from the facts on the record that the said meter was taken under guarantee by the Board from the Supplier M/s. Secure Meter Ltd. and the meter was found defective during the period of the said guarantee which obliged the manufacturer/supplier to take the meter and replace it by another new meter.
It is evident from the facts on the record that the said meter was taken under guarantee by the Board from the Supplier M/s. Secure Meter Ltd. and the meter was found defective during the period of the said guarantee which obliged the manufacturer/supplier to take the meter and replace it by another new meter. Under such circumstances, there is a strong likelihood of bias on the part of the supplier/manufacturer in testing the meter even though its laboratory may be an accredited Laboratory. 22. Even in the Bihar Electricity Supply Code, 2007, it is clearly provided that any such defective meter shall be tested at the Licensees Laboratory/Independent Laboratory/Electrical Inspector as agreed by the consumer in the presence of the representative of the licensee. It is thus, evident that the option where the test is to be carried out from among the three said Laboratories, etc. is that of the consumer and not of the licensee (Electricity Board). Hence, the notice dated 29.5.2008 of the Electricity Board informing the petitioners of the decision to get the meter tested at the Laboratory of M/s. Secure Meters Ltd. itself is a decision contrary to the provisions of the Bihar Electricity Supply Code, 2007 and thus any analysis carried out on the basis of such decision cannot be used against the consumer, i.e., the present petitioners. 23. So far as the reliance placed by both the parties in Central Inland Water case (supra) is concerned, learned Counsel for the petitioners harps upon the question of unequal bargaining power, whereas learned Counsel for the Board relies upon the observation that the principle may not apply where both the parties are business men and the contract is a commercial transaction. It is evident from a close reading of the said decision that it clearly applies to a situation in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them.
It is evident from a close reading of the said decision that it clearly applies to a situation in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It also applies where a man has no choice, or rather no meaningful choice but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however, unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. It is evident that the contract dated 11.6.2006 cannot be considered a mere commercial transaction where both the parties are business men. The Bihar State Electricity Board is a State created monopoly being the sole supplier of electricity to the petitioners/consumers. The petitioner had no choice but to obtain electricity from the Board on terms and conditions stated by it. If the petitioners had not complied with the demands of the Electricity Board, which in the present case appears to be wholly illegal, they would have no choice but to face disconnection of electric supply as a consequence of which the entire stock of potatoes stored in its Cold Storage by the farmers would become rotten resulting in claims for damages of huge amounts. The situation itself was such that they had no option but to succumb to the demands of the Board and act in a manner so that their electrical supply would not be disrupted. 24. In the said circumstances, this Court is constrained to hold that the so-called agreement dated 11.6.2008 was entered into between the petitioners and the Board in a situation in which the petitioner had no option but to accept the electric supply on the terms and conditions imposed by the Board unreasonably. In that view of the said contract cannot be allowed to stand and it is, accordingly, quashed. 25.
In that view of the said contract cannot be allowed to stand and it is, accordingly, quashed. 25. So far as reliance placed by learned Counsel for the Electricity Board on the other decisions is concerned, the same mainly relate to the orders of the High Court being acted upon by the party in question who at the same time intended to argue to the contrary in the appellate forum before the Supreme Court and in those circumstances, it was held that he cannot be permitted to do so; that is not the situation in the present matter. Similarly, no benefit can be derived by the learned Counsel for the Board from the case of Barauni Papers Industries (supra) where after entering into an agreement for the purpose of liquidation of the arrears of electrical charges the petitioner-company had sought interference by this Court against the said contract in which this Court has rightly refused to interfere with the same. The said cases does not apply at all to the facts of the present case in which the petitioners had been confronted with a demand for huge amount as punitive bill in a situation which was not of their own making, rather it was the Board which awoke out of slumber after more than a year and after testing of the defective meter it filed an F.I.R. and raised the said punitive bill. 26. Thus, on a consideration of the aforesaid facts and circumstances, the writ application is allowed and the provisional punitive bill dated 11.6.2008 raised by the Board, pursuant to the analysis report dated 6.6.2008 of M/s. Secure Meters Ltd. is quashed. The authorities of the Board are directed to adjust the amounts already deposited against the said bill in the future bills of the petitioner.