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2022 DIGILAW 111 (UTT)

Bharat Heavy Electricals Limited v. Uttarakhand Power Corporation Limited

2022-05-17

SHARAD KUMAR SHARMA

body2022
JUDGMENT : Sharad Kumar Sharma, J. As per the agreement for supply of electricity and energy to the petitioner, a contract was executed between the petitioner and the UPCL, for the purposes of supply of 34 MVA of electricity. As per the terms and conditions contained under the Supply Agreement under Clause 18, it had provided that if there arises any controversy emanating from the terms and conditions of the contract, all the disputes, were made referable to the Arbitrator, provided therein, the procedure of which, was supposed to be governed by the provisions of the Arbitration Act of 1940. Clause 18 of the contract, reads as under:- “18. All disputes and differences between the supplier and the consumer (settlement of adjustment of which is not herein before provided for or arising out of this agreement, shall be referred to a single arbitrator if the parties agree upon one otherwise two arbitrators on to be appointed by the supplier and one by consumer which arbitrator shall appoint before proceedings with the reference and the decision of sole arbitrator of arbitrator or empire as the case may be for shall be final and the binding on the parties and this clause shall in all respect be deemed and construed at the reference to the arbitrator within the meaning of Indian Arbitration Act, 1940 and the provisions of said act. Or any statutory modification or re-enactment thereof for the time being enforce shall apply to such references. PROVIDED THAT if the question dispute or difference relates to or concerns any dues chargeable to the consumer in terms of this agreement, no reference to the arbitration shall at the instance of the consumer be made till the consumer has deposited with the supplier the amount of dues in disputes, in case. In case of reduction / addition of load the consumer hereby convenience that for all the purposes he shall be deemed as old registered consumer of the supplier having taken supply for different load before execution of this agreement. The supplier shall treat him accordingly.” 2. The respondents/ Corporation, on an accrual of a dispute with regard to the payment of the bills, which was claimed by the respondents/ Corporation, had invoked Clause 18 of the Supply Agreement, and had sought a reference of dispute, before the Arbitrator, which was decided by the Arbitrator, vide its award dated 13th July, 2011. 3. The respondents/ Corporation, on an accrual of a dispute with regard to the payment of the bills, which was claimed by the respondents/ Corporation, had invoked Clause 18 of the Supply Agreement, and had sought a reference of dispute, before the Arbitrator, which was decided by the Arbitrator, vide its award dated 13th July, 2011. 3. What would be relevant to observe herein is, that the issue, which was sought to be referred to be adjudicated by the Arbitrator, was summarised by the Arbitrator in the proceedings before him in the following manner :- “The main questions for our consideration are as follows :- 1. Whether the agreement dated 31.05.2000 is void-ab-initio or has become redundant or is illegal in any manner ? 2. Whether clause 12 (a), (b) and (c) of the agreement dated 31.05.2000 is against the statute of Electricity Reforms Act 1999? If so, its effect. 3. What is the effect if any of the tariff notification made from time to time on the agreement dated 31.05.2000 ? 4. Whether the UPCL is stopped from challenging the agreement dated 31.05.2000 ? 5. Whether the bill dated 16.09.2006 raised by the UPCL is barred estoppels ? 6. Whether the UPCL has acquiescence in accepting the agreement dated 31.05.2000 as binding on it ? 7. Whether the claim of the UPCL raising the bill for the amount of rebate given in earlier bills is barred by law of limitation ? 8. Whether the claim as aforesaid by UPCL is barred by the Section 56 (2) of the Electricity Act ? 9. Whether the UPCL can raise the bill dated 16.09.2006 ? 10. Whether the claimant can raise the bill for late payment surcharge ? 4. 8. Whether the claim as aforesaid by UPCL is barred by the Section 56 (2) of the Electricity Act ? 9. Whether the UPCL can raise the bill dated 16.09.2006 ? 10. Whether the claimant can raise the bill for late payment surcharge ? 4. In the present Writ Petition, the grievance as agitated by the petitioner is, as against the denial of their claim for reduction of the sanctioned load of electricity from 34MVA to 28MVA, for which, the petitioner had applied, but the same has been declined to be considered on the ground of Sub-clause (3) of Clause 9 of UERC Regulation, which reads as under :- “(3) The procedure and condition for grant of new connection as specified in Regulations 3 to 8 shall be followed for enhancement/reduction of contracted load except that application shall be made in Annexure 2 in place of Annexure 1 and the penalty payable by the distribution licensee for delay in effecting enhancement / reduction of contracted load shall be payable @ Rs.500 for each of the default in place of Rs.1000/day.” 5. The UERC Regulations are a creation of Statute, as the same having being formulated under Section 181, to be read with Section 43 and Section 57 of the Electricity Act, and it takes the shape of a subordinate legislation. 6. In order to bring the covonents of the contract for the purposes of the reduction of the already sanctioned load capacity, sanctioned under the terms of the contract, obviously, the petitioner would be equally bound by Sub-clause (3) of Clause 9, that though the request for reduction of load could be accepted subject to the condition of reaching to a zero balance of any amount due to the respondents/ Corporation. 7. The petitioner argues, that the reference of question, which has been already decided by the Arbitrator, in favour of the petitioners while answering question No. 9, which reads as under :- “Whether the UPCL can raise a bill dated 16th September 2006.” 8. 7. The petitioner argues, that the reference of question, which has been already decided by the Arbitrator, in favour of the petitioners while answering question No. 9, which reads as under :- “Whether the UPCL can raise a bill dated 16th September 2006.” 8. In fact, it is this issue as decided by the Arbitration, is being dealt as considered by the Arbitrator, which has been construed by the petitioner, that it would be inclusive of an issue of consideration for the purposes of reduction of sanctioned load from 33 KVA to 28 KVA, because the imposition of the bill, itself was on the basis of sanctioned 33 KVA, and hence, he submits, that this issue No. 9, will include within itself, an issue required to determined for the purposes of reduction of load too, but in fact, if the entire award is taken into consideration, in fact, this was not an issue which was directly involved consideration before the Arbitrator at any stage of proceedings nor any finding from the said perspective with regard to the demand raised by the petitioner for the reduction of load from 34MVA to 28MVA, was ever a subject matter of consideration, and while dealing issue number No.9 by the Arbitrator, in fact, it has been mis-spelt and misconstrued by the petitioner, as if, it would be inclusive of consideration of an aspect of reduction of load. 9. The “reduction of load”, and the consequential imposition of the “consumption charges”, are altogether distinct issues to one another. Consumption is a consequence of electricity consumed against the sanctioned load, whereas, the reduction of a sanctioned load would be always under the terms of contact or agreement of supply, which is altogether a distinct issue, which will fall to be within an ambit of Sub-clause (3) of Clause 9 of UERC Regulation, which is a subordinate legislation. 10. The petitioner submits, that his perception is that in fact, in principle, the respondents had accepted to reduce the load subject to fulfilling the conditions provided therein, in the correspondence dated 30th January, 2020, wherein, according to the respondents, the consideration of reduction of load as sanctioned under the terms of the contract of sanction of the electricity to the petitioners could have been possible only after compliance of Clause 9 (3), which was a subject considered or contemplated by the correspondence dated 30.01.2020. 11. 11. There is a much contra distinction between a “demand of consumption” and the “request for reduction”, of load. I am of the view, that the demand of consumption is qua the electricity consumed, as against the pre-sanctioned load, that in itself will not self-imbibe a consideration of an issue of reduction of sanctioned load from 34 MVA to 28 MVA; as requested for, because while determining the implications of the bill, as demanded and which was a subject matter of consideration under Clause 9, it was not an issue, which could at all be dealt with by the Arbitrator, from the perspective of Sub-clause (3) of Clause 9 of the UERC Regulation, which is absolutely independent to the demand, which was a subject matter of arbitration. Arbitrator couldn’t have decided a matter which was not even referred to him for adjudication. Besides that cannot pass orders for issues covered by Clause 9 (3) of UERC Regulation. 12. In that eventuality, where the contract and its term contained therein, which attracts the applicability of the UERC Regulation; and the reduction of load itself is altogether a subject matter, which is dealt by a Statute, in that eventuality, where the request has been refused by the impugned order dated 30th January, 2020, it will fall to be within an ambit of a dispute falling under Clause 18 of the terms of the contract of sanction of electricity to the petitioner, which would be a subject in much distinction to the subject, which has already been decided by the Arbitrator, and hence, the appropriate recourse, which would be available to the petitioner; would be under Clause 18 itself, because it was arising out of a controversy under the terms of the sanctioned agreement, hence the appropriate recourse available to the petitioner, would be under Clause 18 itself, because in its simplicitor language used under Clause 18, if that is taken into consideration, it uses the word “all disputes and differences between the supplier and the consumers”. 13. The very nomenclature of Clause 18, where it uses the world “all disputes and differences between the supplier and consumers” is wide enough to include any dispute, which is emanating from the terms of the contract, which would be inclusive of an aspect and the request for reduction of load by borrowing the provisions contained under Sub-clause (3) of Clause 9 of the UERC Regulation. 14. Hence, I am of the view that the decision of the Arbitrator, the shelter of which, has been attempted to be resorted to by the petitioners to overcome the embargo of Clause 18 to oust himself from approaching the Arbitrator for the request for reduction of load is absolutely preposterous to be accepted by this Court, because as already observed above, the claim of the bill, is in much distinction to the request for reduction of load, which requires absolutely a distinct parameters to be considered and satisfied, before the reduction of load is acceded to be granted by the respondents, subject to fulfilment of the terms of the Regulation framed under the Act. 15. In that eventuality, as against the impugned action, where there is a denial by the respondents for reduction of load due to non-fulfilment of Sub-clause (3) of Clause 9 of UERC Regulation, the appropriate recourse available to the petitioner would have been to resort to Clause 18 of the agreement for sanction of supply of electricity energy to the petitioner. 16. Hence, for the redressal of his grievance, the petitioner would have his recourses resorted to under Clause 18, because it requires a multifaceted consideration of a factual aspects, which will not be falling within the ambit of Article 226 of Constitution of India. Hence, the Writ Petition is dismissed subject to the liberty left open to the petitioner to resort to Clause 18, against the action of the respondents of denying to reduce the sanctioned load capacity from 34MVA to 28MVA as prayed for. 17. For the aforesaid reasons, the Writ Petition is dismissed.