Sanghvi Foods Pvt. Ltd. , Indore v. M. P. Electricity Board, Dewas
2011-05-07
A.K.SHRIVASTAVA
body2011
DigiLaw.ai
JUDGMENT : The unsuccessful plaintiff has preferred this First Appeal under section 96, Civil Procedure Code. 2. In brief, the case of the plaintiff is that plaintiff Company namely M/s Sanghvi Foods Private Limited has been registered under the Indian Companies Act, 1956 (hereinafter referred to as the plaintiff Company) having its registered office at Indore and Factory at Village Amona, AB Road, District Dewas. The Company's factory deals with food processing. The suit has been filed for declaration that the defendant/M.P. Electricity Board (hereinafter referred to as the Board) is not entitled to recover an amount of Rs.93,047/- (Rupees Ninety three thousand and forty seven only) as additional penalty specified in the electric bill in question for the month of December, 1992 and a sum of Rs. 19,350.327-(Rupees Nineteen thousand three hundred fifty and thirty two paise only) which has been deposited under protest by the plaintiff against the disputed bill of electricity charges for the month of November, 1992 be refunded to the plaintiff Company. A decree of permanent injunction has also been sought to restrain the defendant from disconnecting plaintiffs electric connection. 3. It is the further case of appellant that the plaintiff-Company is a consumer of defendant-Board for supply of electricity up to the extent of 308 KVA. Since the plaintiff required additional energy of 277 K.VA for running its another unit, the defendant-Board agreed to execute supplementary agreement and the same was executed on 30-9-1992 on deposit of due charges subject to at least 15 days advance notice in writing from the Board to the Company or from a date after issue of the said notice, to be intimated in writing by the plaintiff to the defendant, whichever would be earlier. Thereafter, several letters were sent by the Company to the defendant/respondent in between 21-11-1992 to 21-1-1993 demanding additional supply of energy in terms of the agreement. But, before the advance notice, as pointed out above could be given from the defendant side, the plaintiff started its second Unit using the existing meter installed in the Factory premises for the supply of additional energy and accordingly it was also informed to the defendant/respondent about the starting of the second Unit. 4.
But, before the advance notice, as pointed out above could be given from the defendant side, the plaintiff started its second Unit using the existing meter installed in the Factory premises for the supply of additional energy and accordingly it was also informed to the defendant/respondent about the starting of the second Unit. 4. Further it has been averred in the plaint that defendant imposed additional penalty of Rs.19,305.32 (Rupees Nineteen thousand three hundred five and thirty two paise only) on plaintiff under the bill for the month of November, 1992 for using energy from the meter which was already installed for the purpose of running original Unit of 308 KVA. The said amount of penalty has been deposited under protest by the plaintiff. In the electric bill for the month of December, 1992, the defendant-Board again made a demand of Rs.93,046.697-(Rupees Ninety three thousand forty six rupees and sixty nine paise only) from the plaintiff as penalty which is yet to be deposited by it. Hence, a declaration has been sought by the plaintiff that the amount of Rs. 19,305.32/-which has been deposited under protest, the plaintiff is entitled for its refund and it be returned to it. Further a declaration that defendant-Board is also not entitled to recover a sum of Rs.93,047/-as penalty imposed in the billing of December, 1992. A decree of injunction has also been sought that in default of depositing the said amount by the plaintiff-Company, the defendant-Board be restrained from stopping the electric supply. The plaintiff although originally valued the suit for Rs.600/-for declaration and injunction and paid Court fee of Rs.60/-but by amending the plaint an additional relief has been sought that a decree of specific performance for the compliance of the agreement dated 30-9-1992 be passed. The plaintiff also amended the valuation clause and by putting the valuation of Rs. 1,12,352.32/-(Rupees One lac twelve thousand three hundred and fifty two and thirty two paise only) and paid the ad-valorem Court fees. 5. The defendant denied the plaint averments by filing written statement and inter alia pleaded that plaintiff Company had unauthorizedly and hazardously used additional energy of high voltage of the electricity through the existing meter which was installed for 308 KVA to run the earlier Unit of the Company. The said Unit was virtually not meant to bear high voltage exceeding 308 KVA.
The said Unit was virtually not meant to bear high voltage exceeding 308 KVA. By utilizing the old cables and meter which was already installed, the plaintiff-Company has started using the electric energy of high voltage. By the grace of God, the cables were not burnt otherwise anything could happen. The act of the plaintiff-Company was hazardous and there were reasonable chances of fire breaking out on account of hazardous activity of the plaintiff Company. Since without installing the meter permitting and allowing additional electric energy of 277 KVA, the plaintiff Company is using additional high voltage energy, therefore, rightly the penalty has been assessed which cannot be challenged and a decree as prayed by the plaintiff Company cannot be passed. 6. The learned trial Court on the basis of the averments made in the plaint and denial in the written statement framed necessary issues and after recording the evidence of the parties dismissed the suit. 7. In this manner, this first appeal has been filed by the plaintiff Company. 8. Two contentions have been put forth by Shri Bagadia, learned senior counsel for the appellant/plaintiff. His first contention is that there is no condition in the additional agreement dated 30-9-1992 (Exhibit P/2) that in case prior to installation of the meter to provide additional load of 277 KVA, if the said additional electric energy is consumed by the plaintiff Company, they would be liable to pay penalty and therefore, imposing the penalty runs contrary to the agreement (Exhibit P/2). His second contention is that even for the sake of arguments if it is held that there was such an implied condition, the same cannot be implemented for the simple reason that the same is hit by sections 91 and 92 of the Indian Evidence Act, 1872 (for brevity, the Evidence Act) and even otherwise also the said condition is in terrorem as envisaged under section 74 of the Indian Contract Act, 1872 (for brevity, the Contract Act). Hence, it has been prayed that by allowing this appeal, the suit of plaintiff be decreed. 9. On the other hand, Shri L. R. Bhatnagar, learned counsel appearing for the defendant/respondent Board argued in support of the impugned judgment. In support of his contention, he has placed reliance on the judgment of Supreme Court Jiyajeerao Cotton Mills Ltd. and another vs. The Madhya Pradesh Electricity Board and others, 1988 MPJR (SC) 124.
9. On the other hand, Shri L. R. Bhatnagar, learned counsel appearing for the defendant/respondent Board argued in support of the impugned judgment. In support of his contention, he has placed reliance on the judgment of Supreme Court Jiyajeerao Cotton Mills Ltd. and another vs. The Madhya Pradesh Electricity Board and others, 1988 MPJR (SC) 124. 10. Before considering the rival contentions of learned counsel for the parties, it would be apt to go through the testimony of plaintiff s witness Dinesh Kumar Singhvi (PW-1) who is the Director of the plaintiff-Company. In cross-examination (para 10) he has specifically admitted that the old meter which was installed was meant to consume electric energy up to the extent of 308 KVA. Further he had admitted that in the month of November-December, 1992, the plaintiff Company consumed 444 KVA electric energy and this energy has been consumed prior to installation of the additional meter for 308 KVA. Specifically, this witness has admitted that on account of using of high voltage beyond the permissible limit, the meter could have been burnt. Although in para 11 of his cross-examination, he has admitted that in favour of plaintiff Company, an additional electric energy has been permitted and allowed by the Board and in that regard, additional agreement (Exhibit P/2) was executed. This witness has also admitted in para 11 that after installation of the electric meter to provide additional electric energy of 277 KVA, the plaintiff Company became entitled to consume additional power energy within 15 days of the notice given by the Board. He has further admitted that without even waiting for the advance notice of at least 15 days from the defendant in terms of additional agreement (Exhibit P/2), unauthorizedly the plaintiff Company started consuming the additional electric energy and in total started consuming 444 KVA energy although the meter which was already installed was permissible up to the extent of 308 KVA only. The explanation which has been given in para 12 of his testimony of consuming the additional electric energy is that if the Board failed to install the meter, they are not at fault, although the plaintiff Company had already deposited the entire amount which was demanded by the Board.
The explanation which has been given in para 12 of his testimony of consuming the additional electric energy is that if the Board failed to install the meter, they are not at fault, although the plaintiff Company had already deposited the entire amount which was demanded by the Board. The purpose of quoting the evidence and certain admissions of plaintiff Company's Director Dinesh Kumar Singhvi (PW-1) is that without awaiting 15 days notice for starting additional consumption of the electric power even prior to the installation of the additional meter to bear the load of high voltage, the high tension load exceeding the original limit of 308 KVA was started. Thus, according to me, the plaintiff themselves have breached the terms of the contract embodied in Exhibit P/2 (additional agreement dated 30-9-1992). 11. At this juncture, it would be condigned to quote that clause of supplementary agreement amending the earlier agreement dated 15-9-1989 which reads thus :- "NOW THEREFORE, this agreement witness and it is hereby agreed that the said agreement shall be amended as follows :- In the said agreement for the sub-clause (a) of clause-1 the following sub-clause shall be substituted namely:- a) Subject to the provisions hereinafter contained and during the continuance of this agreement the Board shall supply to the consumer and the consumer shall take from the Board all such electrical energy as the consumer shall require for the purpose of his own use and for the abovementioned purpose at his premises referred to above, up to maximum of :- 1) 308 (Three hundred eight) KVA W.E.F. 28-7-1990. 2) 585 (Five hundred eighty five) KVA W.E.F. a date which shall be intimated by Board's E.E. of the area by giving at least 15 days advance notice in writing or from a date after issue of the said notice to be intimated by the consumer in writing whichever is earlier shall be inserted (hereinafter called the contract demand) Subject to provision of clause 18 hereof. The Clause-30 of the said agreement is deemed to be deleted W.E.F. the date of connection. Save as herein before modified the said agreement shall remain in and have full force and effect." 12.
The Clause-30 of the said agreement is deemed to be deleted W.E.F. the date of connection. Save as herein before modified the said agreement shall remain in and have full force and effect." 12. On bare perusal of the additional agreement (Exhibit P/2), this Court finds that the original agreement was executed between the parties on 15-9-1989, but, the said agreement has not been adduced and proved in the evidence by the plaintiff Company. Thus what were the terms and conditions of the original agreement there is nothing on record. Why the plaintiff has not filed that document, there is no explanation. I have no scintilla of doubt that the additional agreement (Exhibit P/2) is nothing but supplement to the first agreement dated 15-9-1989 (which has not been filed nor proved by the plaintiff). By amending sub-clause (a) of Clause 1 the aforesaid amended clause has been inserted (which I have already quoted hereinabove) in the original agreement (not filed). There is nothing on record what were the terms and conditions in the original agreement in which abovesaid clause has been substituted by amendment. 13. So far as the first contention of learned senior counsel for the appellant which he vehemently submitted that in the additional agreement no such condition was embodied to realise the penalty in case the plaintiff-Company utilizes the additional electric load/is concerned, suffice it to say that the said contention cannot be accepted for two reasons. Firstly Exhibit P/2 is only a supplement agreement to the first agreement dated 15-9-1989. The original agreement has admittedly not been adduced and proved in evidence by the plaintiff. Certainly, that document is in power and possession of the plaintiff and because the burden of proof on all issues was on plaintiff, it was for him to produce that agreement. In this context, I may profitably place reliance on two decisions of the Supreme Court. They are Gopal Krishnaji Ketkar vs. Mohammed Haji Latif and others, 1969 MPLJ (SC) 271 = AIR 1968 SC 1413 and Goswami Shri Mahalaxmi Vahuji vs. Shah Ranchhoddas Kalidas (Dead) and others, 1971 MPLJ (SC) 257 = AIR 1970 SC 2025 . The second reason for not accepting the said argument is that this plea is having nexus with the facts and, therefore, it should have been pleaded in the plaint.
The second reason for not accepting the said argument is that this plea is having nexus with the facts and, therefore, it should have been pleaded in the plaint. In the entire plaint, it has not been pleaded by the plaintiff that in case the defendant Board fails to install the additional meter for consumption of additional high voltage power, the plaintiff-Company is liable to pay penalty and the said condition is in terrorem. This plea ought to have been taken by the plaintiff in the plaint. Indeed, the second agreement is nothing but is in continuation of the first agreement dated 15-9-1989 and, therefore, in order to take out the grain from the chaff, what were the terms and conditions of the earlier agreement, it ought to have been pleaded and should have been proved in the evidence. The plaintiff was bound to prove the terms and conditions of the original agreement in terms of section 91 of the Evidence Act. 14. So far as the contention of learned senior counsel that there cannot be any implied or oral contract because it would be in contravention to section 92 of the Evidence Act is concerned, suffice it to say that again the plaintiff was bound to adduce and prove the terms of original agreement dated 15-9-1989 in order to infer whether there was any change in the agreement in respect of defaulting clause or not. Since the original agreement dated 15-9-1989 has not been adduced and proved by the plaintiff, it cannot be said that the penalty which is being realized is in contravention to section 92 of the Evidence Act. Hence, this contention of learned senior counsel also cannot be accepted. 15.
Since the original agreement dated 15-9-1989 has not been adduced and proved by the plaintiff, it cannot be said that the penalty which is being realized is in contravention to section 92 of the Evidence Act. Hence, this contention of learned senior counsel also cannot be accepted. 15. So far as the second contention of learned senior counsel in regard to the condition of realization of penalty is concerned, according to me, again in absence of pleading and proving the terms of earlier agreement dated 15-9-1989 by the plaintiff, it cannot be said that the said condition is a penalty and was in terrorem in terms of section 74 of the Contract Act because in order to hold that whether realization of penal amount is in terrorem, it was necessary to file earlier agreement for the simple reason that the opening words of section 74 is that "when a contract has been broken..." and, therefore, in absence of adducing and proving the terms of earlier agreement in evidence, this provision cannot be trigerred and set in motion. 16. Apart from what I have held hereinabove, penalty or liquidated damages cannot be taken as such on merely being so described. A penalty is a sum of money so stipulated in terrorem and liquidated damages are a genuine pre-estimate of damages. They are to be so judged on the facts of each case. The question whether a particular stipulation in a contract is in the nature of penalty has to be determined by the Court against the background of various relevant factors, such as the character of the transaction and its special nature, if any, the relative situation of the parties, the rights and obligations accruing from such a transaction under the general law, and the intention of the parties incorporating in the contract the particular stipulation which is contended to be penal in nature. If on such a comprehensive consideration, the Court finds that the real purpose for which the stipulation was incorporated in the contract was that by reason of its burdensome or oppressive character, it may operate in terrorem over the promisor so as to drive him to fulfil the contract, then the provision will be held to be one by way of penalty, (see Mulla's Indian Contract and Specific Relief Acts, Thirteenth Edition, page 1669). 17.
17. According to me, whether the condition of realizing the penalty is in terrorem is to be adjudged along with section 22-B of the Indian Electricity Act, 1910 and Electricity (Supply) Act, 1948. The Supreme Court in Jiyajeerao Cotton Mills Ltd. (supra) while considering the vires of these provisions has categorically held that the demand of higher charges/tariff for electricity consumed beyond legally fixed limit is a reasonable deterrent measure providing an appropriate sanction not as harsh as disconnection of supply of energy altogether and cannot be opposed on the ground of public policy and for this another reason also, the action of respondents in charging excessive amount in the impugned bill cannot be said to be illegal. 18. Apart from this, there is no such plea in the plaint. Since this is a fact which ought to have been pleaded by the plaintiff in the plaint. According to me, when this plea was never raised in the plaint, cannot be permitted to be raised now for the first time before this Court. In this context, I may profitably place reliance on judgment of Supreme Court in C. Mackertich vs. Steuart & Co. Ltd., AIR 1970 SC 839 . 19. Resultantly, this appeal fails and is hereby dismissed with no order as to costs. Appeal dismissed.