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2014 DIGILAW 1051 (CAL)

Bal Kishan Kedia v. CESC Limited

2014-11-12

DEBANGSU BASAK

body2014
Judgment Debangsu Basak, J. The writ petitioners assail three notices all dated September 14, 2013 issued by the CESC authorities. By the three notices CESC authorities claim a sum of Rs.5,07,166/- for unauthorized use of electricity in respect of supply in favour of Sitaram Bal Kishan, HUF on the ground that the first petitioner is a member of the HUF and that the second petitioner and the third petitioner are related to the first petitioner and, therefore, there is a nexus between the petitioners and the erstwhile consumer. Mr. Shubankar Nag learned Counsel for the petitioners submits that, the impugned notices are not enforceable in view of the Limitation Act, 1963 as well as Section 56 of the Electricity Act, 2003. According to him, the CESC authorities have a money claim which had arisen more than three years from the date of demand and, therefore, the CESC authorities cannot be allowed to enforce such time barred claim. He relies on Section 56 of the Electricity Act, 2003 and submits that, Sub-Section (2) of Section 56 contemplates a period of two years from the date of claim or in the event of continuous bills being raised two years from the date of the last bill. In the instant case, he submits that, the theft of electricity is of 2003. The CESC authorities did not raise bills continuously from 2003 till the impugned demand and, therefore, the claim of the CESC authorities made in the impugned notices are barred under Section 56(2) of the Electricity Act, 2003. He relies upon 2012 Volume 5 Calcutta High Court Notes page 213 (CESC Limited v. Shiva Glass Company Limited) in this regard. He refers to the West Bengal Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2007 and in particular to Regulation 3.4.2 thereof and submits that, there is no nexus between the writ petitioners and the erstwhile consumer, the liability of whom was sought to be foisted upon the petitioners before Court. Although the first petitioner is a member of the HUF being the erstwhile consumer, neither the first petitioner nor the two other petitioners have any nexus with the erstwhile consumer. He relies upon All India Reporter 2007 Bombay page 52 (Awadwsh S. Pandey v. Tata Power Co. Although the first petitioner is a member of the HUF being the erstwhile consumer, neither the first petitioner nor the two other petitioners have any nexus with the erstwhile consumer. He relies upon All India Reporter 2007 Bombay page 52 (Awadwsh S. Pandey v. Tata Power Co. Ltd. & Ors.) and submits that, the threat contained in the impugned notices cannot be allowed to be carried out as the claim of the writ petitioners is barred under Section 56 of the Electricity Act, 2003 and that there is no nexus between the writ petitioner and the erstwhile consumer. He relies upon 2004 Volume 11 Supreme Court page 1 (Indian Banks’ Association, Bombay & Anr. v. Devkala Consultancy Service & Ors.) and submits that, the impugned notices are contrary to Regulation 3.4.2 of the Electricity Supply Code Regulation, 2007 and, therefore, are required to be quashed. Mr. Subir Sanyal learned Counsel for the CESC authorities submits that, the CESC authorities were not aware of the nexus between the writ petitioners and the erstwhile consumer till its discovery in 2013. The erstwhile consumer assailed the quantification of the claim on account of unauthorized use of electricity without success as would appear from orders passed in the earlier writ petitions filed by the erstwhile consumer. He refers to Sections 126 and 127 of the Electricity Act, 2003 and submits that, the erstwhile consumer had a right of appeal on the quantification on account of unauthorized use of electricity. The claim of the CESC authorities against the erstwhile consumer has attained finality. CESC authorities are, therefore, entitled to recover such sum. The erstwhile consumer is a HUF. The first petitioner in this proceeding is a member of the erstwhile consumer. The nexus between the three petitioners with the erstwhile consumer was not known to the CESC authorities till its discovery in 2013. The CESC authorities, therefore, could not raise continuous bills on the present petitioners since the CESC authorities did not know of the nexus between the present petitioners and the erstwhile consumer till its discovery in 2013. Immediately on such discovery, CESC authorities have issued three notices of demand which are the subject matter of the present writ petition. The CESC authorities, therefore, could not raise continuous bills on the present petitioners since the CESC authorities did not know of the nexus between the present petitioners and the erstwhile consumer till its discovery in 2013. Immediately on such discovery, CESC authorities have issued three notices of demand which are the subject matter of the present writ petition. He points out that, it is not the case of the writ petitioners that, in spite of the writ petitioners informing the CESC authorities as to their relationship with the erstwhile consumer, the CESC authorities chose not to raise bills on the present petitioners for a period in excess of two years from the date of the information. Mr. Sanyal relies on 1996 Volume 4 Supreme Court Cases page 522 (M.P. Electricity Board, Jabalpur & Ors. v. Harsh Wood Products & Anr.) in support of his contention that Section 56(2) does not apply to demand on detection of pilferage. He relies upon All India Reporter 1978 Bombay page 369 (M/s. Bharat Barrel & Drum Manufacturing Co. Pvt. Ltd. v. The Municipal Corporation of Greater Bombay & Anr.) and submits that, the word ‘due’ used in Section 24 of the Indian Electricity Act, 2010 includes neglect to pay time barred claim. He submits that, Section 24 of the Indian Electricity Act, 2010 and Section 56(2) of the Electricity Act, 2003 are pari materia and, therefore, on the strength of the ratio laid down in Harsh Wood Products & Anr. (supra), the claim of CESC authorities in the facts of this case cannot be said to be time bared. He relies upon 1997 Volume 9 Supreme Court Cases page 465 (Swastic Industries v. Maharashtra State Electricity Board) and submits that, Section 24 of the Electricity Act, 2010 was considered and it was held that the provision was an enabling provision. It enabled the electricity authorities to recover amounts due by way of suit. The right to file a suit under Section 60A of the Electricity (Supply) Act, 1948 is a matter of option given to the licensee. The right to file the suit does not take away the right conferred on the licensee under Section 24 of the Electricity Act, 1910 to make demand for payment of the charges and on neglecting to pay the sum to discontinue the supply or cut off the supply as the case may be. The right to file the suit does not take away the right conferred on the licensee under Section 24 of the Electricity Act, 1910 to make demand for payment of the charges and on neglecting to pay the sum to discontinue the supply or cut off the supply as the case may be. He submits that, the CESC authorities are entitled to claim time barred debts from the writ petitioners. I have considered the rival contentions of the parties and the materials made available on record. Sitaram Bal Kishan, HUF enjoyed an electricity connection from the licensee CESC limited. On July 16, 2003 the electricity connection was disconnected for unauthorized use. The CESC authorities raised a provisional bill of Rs.5,07,166/- on Sitaram Bal Kishan, HUF. The first writ petitioner herein is the Karta of Sitaram Bal Kishan, HUF. The disconnection of electric supply to Sitaram Bal Kishan, HUF was challenged in W.P. No. 11563(W) of 2003. In such writ petition an Order dated August 13, 2003 was passed directing deposit of 50 per cent of the provisional bill raised by CESC Limited. An appeal was preferred against the judgment and order dated August 13, 2003 which was dismissed on September 24, 2003. A final order of assessment of unauthorized use of electricity by Sitaram Bal Kishan, HUF was made on August 14, 2003 and the same was communicated to Sitaram Bal Kishan, HUF on August 21, 2003. A second writ petition was filed challenging the final order of assessment. The second writ petition being W.P. No. 16523(W) of 2004 was disposed of by an Order dated November 16, 2007 allowing Sitaram Bal Kishan, HUF to file its objection before the Assessing Officer by November 19, 2007. The writ petitioners claim that written objection in terms of the Order dated November 16, 2007 was filed. The CESC authorities claim that no objection either in terms of the Order dated August 13, 2003 or the Order dated November 16, 2007 was ever filed. The only objection filed was beyond the period allowed by the Order dated November 16, 2007. The writ petitioners rely upon Annexure P-5 being the letter dated November 17, 2007 as the written objection filed before the Assessing Officer. The only objection filed was beyond the period allowed by the Order dated November 16, 2007. The writ petitioners rely upon Annexure P-5 being the letter dated November 17, 2007 as the written objection filed before the Assessing Officer. The said written objection was tendered to and received by the CESC authorities on November 22, 2007 well beyond November 19, 2007 provided for by the Order dated November 16, 2007. Therefore, such written objection was not in terms with the Order dated November 16, 2007. The electric supply to Sitaram Bal Kishan, HUF stood disconnected in 2003. The condition for restoration of electric supply laid down by the Order dated August 13, 2003 was not complied with. Sitaram Bal Kishan, HUF did not deposit 50 per cent of the then provisional bill of the CESC authorities. The amount claimed by CESC authorities subsequently attained finality upon adjudication thereof. Sitaram Bal Kishan, HUF although being afforded an opportunity to file written objection by the Order dated August 13, 2003 did not file any written objection. A second opportunity to file written objection was given by the Order dated November 16, 2007. Sitaram Bal Kishan, HUF did not avail of such opportunity also. The Karta of Sitaram Bal Kishan, HUF is carrying on business under the name and style of Popular Plastic and Packaging Industries as the sole proprietor thereof from Taratala Road, Kolkata. The supply of electricity to Sitaram Bal Kishan, HUF was disconnected at Andul Road, Howrah. The first writ petitioner is the Karta of Sitaram Bal Kishan, HUF. His liability is co-extensive as that of the liability of Sitaram Bal Kishan, HUF as a coparcener and a Karta thereof. He is, therefore, liable to pay all outstanding dues of Sitaram Bal Kishan, HUF including the claim of the CESC authorities. The second writ petitioner is the wife of the first writ petitioner. The third writ petitioner is the son of the first writ petitioner. The second and the third writ petitioners are, therefore, immediate family members of the first writ petitioner. In my view, all the three writ petitioners have a nexus with the erstwhile consumer being Sitaram Bal Kishan, HUF. The writ petitioners contend that, the claim made in the three impugned notices is barred by time in view of Section 56 of the Electricity Act, 2003 and Limitation Act, 1963. In my view, all the three writ petitioners have a nexus with the erstwhile consumer being Sitaram Bal Kishan, HUF. The writ petitioners contend that, the claim made in the three impugned notices is barred by time in view of Section 56 of the Electricity Act, 2003 and Limitation Act, 1963. The period of limitation to recover money by way of a suit is three years under the provisions of the Limitation Act, 1963. The CESC authorities have not filed any suit for recovery of the dues being the subject matter of the impugned notices. The CESC authorities have invoked Section 56 of the Electricity Act, 2003 to recover its dues and have threatened disconnection of electric supply to the writ petitioners in the event of non-payment of the dues of the erstwhile consumer. Section 56 of the Electricity Act, 2003 is as follows: “56. Disconnection of supply in default of payment.- (1) Where any person neglects to pay any charge for electricity or any sum other than a charge for electricity due from him to a licensee or the generating company in respect of supply, transmission or distribution or wheeling of electricity to him, the licensee or the generating company may, after giving not less than fifteen clear days' notice in writing, to such person and without prejudice to his right to recover such charge or other sum by suit, cut off the supply of electricity and for that purpose cut or disconnect any electric supply line or other works being the property of such licensee or the generating company through which electricity may have been supplied, transmitted, distributed or wheeled and may discontinue the supply until such charge or other sum, together with any expenses incurred by him in cutting off and reconnecting the supply, are paid, but no longer: PROVIDED that the supply of electricity shall not be cut off if such person deposits, under protest,- (a) an amount equal to the sum claimed from him, or (b) the electricity charges due from him for each month calculated on the basis of average charge for electricity paid by him during the preceding six months, whichever is less, pending disposal of any dispute between him and the licensee. (2) Notwithstanding anything contained in any other law for the time being in force, no sum due from any consumer, under this section shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrear of charges for electricity supplied and the licensee shall not cut off the supply of the electricity.” In Shiva Glass Company Limited (supra) two bills raised on the writ petitioners by the CESC authorities in that case came up for consideration. The Division Bench is of the view that, Section 56 of the Electricity Act, 2003 is not a verbatim reproduction of Section 24 of the Indian Electricity Act, 2010. It goes on to hold that, Sub-Section (2) of Section 56 is a significant change from that of the Indian Electricity Act, 2010. It starts with a non-obstante clause. Section 56 put a restriction on the right of the licensee to realize and/or recover any sum due from any consumer after a period of two years from the date when such sum became first due unless such sum is shown continuously to be recoverable as arrear of charges for electricity supplied. According to their Lordships, there is a complete bar to disconnect electric supply if the demands are not recoverable in terms of Section 56 (2) of the Electricity Act, 2003. Shiva Glass Company Limited (supra) is a case where the consumer assailed two bills on the ground that, the claim is time barred under Section 56(2) of the Electricity Act, 2003. The fact scenario in this case is different. In this case the erstwhile consumer, a HUF, did not pay for the unauthorized use of electricity. The writ petitioners having nexus with the erstwhile consumer now sets up the time period prescribed under Section 56(2) of the Electricity Act, 2003 as a defence to the claim raised by the CESC authorities in respect of the claim on account of unauthorized use of electricity supply by the erstwhile consumer. In the Shiva Glass Company Limited (supra) the licensee was aware of the address of the consumer on whom to raise the bills. In the present case, it is an admitted position that, the CESC authorities were unaware of the nexus between the erstwhile consumer and the present writ petitioners till the issuance of the demand notices. In the Shiva Glass Company Limited (supra) the licensee was aware of the address of the consumer on whom to raise the bills. In the present case, it is an admitted position that, the CESC authorities were unaware of the nexus between the erstwhile consumer and the present writ petitioners till the issuance of the demand notices. On the nexus being discovered, CESC authorities raised its claim on the persons having nexus immediately on such discovery. Only on discovery of the nexus could the CESC authorities have knowledge of the address of the persons having nexus with the erstwhile consumer and as such being liable to pay. CESC authorities raised the demand within the period prescribed under Section 56 of the Electricity Act, 2003 from the date of discovery of the nexus. It cannot be said that, the claim of the licensee is time barred under Section 56(2) of the Electricity Act, 2003 when the claim from the writ petitioners is on account of unauthorized use of electric supply by the erstwhile consumer in view of a nexus existing between the erstwhile consumer and the present petitioners. Regulation 3.4.2 of the Electricity Supply Code Regulation, 2007 is pressed into service on behalf of the writ petitioners to contend that, the CESC authorities must establish a nexus between the erstwhile consumer and the present writ petitioners to sustain their claim against the present writ petitioners for claims against the erstwhile consumer. Regulation 3.4.2 requires a nexus to be established between the erstwhile consumer and the person from whom demand is made by the licensee for arrears outstanding on account of erstwhile consumer. In this case the erstwhile consumer is a Hindu Undivided Family. The first writ petitioner admits himself to be a member and is in fact the Karta of the erstwhile Hindu Undivided Family. It is not the case of any of the writ petitioners that some other person than the writ petitioners took over the liabilities of the Hindu Undivided Family in its entirety and, therefore, the first petitioner as a coparcener and Karta of the said Hindu Undivided Family is not liable. The liability of the first writ petitioner in respect of the outstanding on account of the HUF stands established. His liability is co-extensive with that of the erstwhile consumer. The nexus between the erstwhile consumer and the first petitioner is, therefore established. The liability of the first writ petitioner in respect of the outstanding on account of the HUF stands established. His liability is co-extensive with that of the erstwhile consumer. The nexus between the erstwhile consumer and the first petitioner is, therefore established. The other two writ petitioners are relatives of the first writ petitioner. The second writ petitioner is the wife of the first writ petitioner and the third is his son. CESC authorities have discharged its onus of establishing a nexus between the erstwhile consumer and the present writ petitioners. It is for the writ petitioners to demonstrate that despite the nexus being established, the writ petitioners are not liable to pay the dues of the erstwhile consumer. No material is produced before me to establish such case of the writ petitioners. Awadwsh S. Pandey (supra) deals with the two questions summarized at paragraph 4 of the report. Essentially it relates to the powers of the Electricity Ombudsman. One of the questions considered in that case was whether the Electricity Ombudsman can pass orders for the period retrospective to its establishment. In such context the Division Bench of the Bombay High Court is of the view that, Section 56 allows a licensee or a generating company to recover its dues expeditiously. Apart from the above mechanism, independently a licensee or a generating company can recover its dues by way of a suit. Mr. Nag relies upon Indian Banks’ Association, Bombay & Anr. (supra) for the proposition that, when a procedure is laid down, the statutory authority must exercise its power in the manner prescribed or not at all. In the instant case, I do not find that the CESC authorities have exercised its power not in accordance with the procedure established. M.P. Electricity Board, Jabalpur & Ors. (supra) is in relation to the Indian Electricity Act, 1910 and Section 24 thereof. It is of the view that Section 24 of the Indian Electricity Act, 1910 does not apply to demand of detection of pilferage. M/s. Bharat Barrel & Drum Manufacturing Co. Pvt. Ltd. (supra) is in relation to Section 24 of the Indian Electricity Act, 1910. It holds that, the word ‘due’ in the Indian Electricity Act, 1910 should not be given a restricted meaning. M/s. Bharat Barrel & Drum Manufacturing Co. Pvt. Ltd. (supra) is in relation to Section 24 of the Indian Electricity Act, 1910. It holds that, the word ‘due’ in the Indian Electricity Act, 1910 should not be given a restricted meaning. It holds in paragraph 12 as follows:- “………………………………….We see no warrant in the light of these statutory provisions to read the word ‘due’ in the Electricity Act in the narrower sense viz. as only restricted to amounts within the period of limitation or which could be successfully claimed by a suit. In other words there is no logical basis shown for preferring the narrower constriction to the ordinary construction, the wider one which is in accordance with the dictionary meaning as set out in Ramrao Palkar’s case.” M/s. Bharat Barrel & Drum Manufacturing Co. Pvt. Ltd. (supra) was considered by the Supreme Court in Swastic Industries (supra). Again it was in relation to Section 24 of the Indian electricity Act, 1910. In paragraph 5 of such report it was held as follows:- “5. It would, thus, be clear that the right to recover the charges is one part of it and right to discontinue supply of electrical energy to the consumer who neglects to pay charges is another part of it. The right to file a suit is a matter of option given to the licensee, the Electricity Board. Therefore, the mere fact that there is a right given to the Board to file the suit and the limitation has been prescribed to file the suit, it does not take away the right conferred on the Board under Section 24 to make demand for payment of the charges and on neglecting to pay the same they have the power to discontinue the supply or cut off the supply, as the case may be, when the consumer neglects to pay the charges. The intendment appears to be that the obligations are mutual. The Board would supply electrical energy and the consumer is under corresponding duty to pay the sum due towards the electricity consumed. This the Electricity Board, having exercised that power, since admittedly the petitioner had neglected to pay the bill for the additional sum, was right in disconnecting the supply without recourse to filing of the suit to recover the same. This the Electricity Board, having exercised that power, since admittedly the petitioner had neglected to pay the bill for the additional sum, was right in disconnecting the supply without recourse to filing of the suit to recover the same. The National Commission, therefore, was right in following the judgment of the Bombay High Court and allowing the appeal setting aside the order of the State Commission. Moreover, there is no deficiency of service in making supplementary demand for escaped billing. There may be negligence or collusion by subordinate staff in not properly recording the reading or allowing pilferage to the consumers. That would be deficiency of service under the Consumer Protection Act. We do not find any illegality warranting interference.” The Division Bench of our Court in Shiva Glass Company Limited (supra) held that, Section 56 of the Electricity Act, 2003 was not a verbatim reproduction of Section 24 of the Indian Electricity Act, 1910. I have already found a nexus between the erstwhile consumer and the present writ petitioners to be established. I have also found that, the CESC authorities were unaware till 2013, being the date when it issued the impugned notices to the three writ petitioners as to the nexus between the writ petitioners and the erstwhile consumer. The right to recover dues is recognized under Section 56 of the Electricity Act, 2003. By the three impugned notices, the CESC authorities have demanded payment and have threatened disconnection of the supply enjoyed by the three writ petitioners in the event of non-payment. The demand by the CESC authorities made in the impugned notices in my view, is not barred under Section 56(2) of the Electricity Act, 2003 for the reasons stated. I find the stand of the writ petitioners to be utterly dishonest. The first writ petitioner as the Karta of the erstwhile consumer assailed the provisional bill of CESC authorities resulting in the Order dated August 13, 2003. The said order allowed reconnection upon deposit of 50 per cent of the provisional bill. The first writ petitioner as the Karta did not deposit any amount. Rather an appeal was carried which was dismissed by the Order dated September 24, 2003. The first writ petitioner as the Karta filed a second writ petition for setting aside the final order of assessment. The first writ petitioner as the Karta did not deposit any amount. Rather an appeal was carried which was dismissed by the Order dated September 24, 2003. The first writ petitioner as the Karta filed a second writ petition for setting aside the final order of assessment. By an Order dated November 16, 2007 the second writ petition was disposed of by allowing filing of written objection within the time specified. No written objection was filed within the time specified by the Order dated November 16, 2007. The final order of assessment has since been made and the same is binding. The repeated attempts by the writ petitioners not to pay the legitimate claim of the CESC authorities on account of unauthorized use of electricity smacks of mala fides on the part of the writ petitioners. Their conduct is downright dishonest. In such circumstances I find no merit in the writ petition and in view of the dishonest stand of the writ petitioners, I dismiss the writ petition being W.P. No. 1008 of 2013 with costs assessed at Rs.50,000/-.