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PETITIONER: BIHAR STATE ELECTRICITY BOARD & ANR.

       Vs.

RESPONDENT: DHANAWAT RICE AND OIL MILLS

DATE OF JUDGMENT17/01/1989

BENCH: OZA, G.L. (J) BENCH: OZA, G.L. (J) SAIKIA, K.N. (J)

CITATION:  1989 AIR 1030            1989 SCR  (1) 168  1989 SCC  (1) 452        JT 1989 (1)   425  1989 SCALE  (1)162

ACT:     Electricity (Supply) Act, 1948: Sections 18, 26, 28, 29, 49, 54 & 60--Agreement to supply electrical  energy--Clauses 1, 4 and 13 of the agreement--Provision for constant  supply of    electricity--Constant   supply   whether    continuous supply--Minimum  annual  guarantee  payment-Tripping,  load- shedding  and power cut--Failure to supply continuous  elec- tricity--Circumstances   beyond   control   of   Electricity Board--Consequent non-consumption by consumer upto the level of  minimum  guarantee--Consumer entitled  to  proportionate reduction.

HEADNOTE:     Clause  1, of the agreement arrived at between the  con- sumerrespondents  and the appellant-Electricity Board,  pro- vided  for constant supply of electrical energy to the  con- sumers. Clause 4 provided that even if the consumer does not consume electricity above the minimum guarantee then it will be  incumbent  upon  the  consumer  to  pay  annual  minimum charges. Clause 13 provided for the contingency that if  the consumer is prevented from receiving or using the electrical energy due to strikes, riots, fire, floods, explosions,  act of  God or any other case reasonably beyond the  control  of the  Board or if the Board is prevented from supplying  such electrical energy owing to any of the causes mentioned  then the  consumer was entitled to a proportionate  reduction  of the annual minimum guarantee bill as determined by the Chief Engineer.     The  respondents were served with the hills  for  annual minimum  guarantee for the years 1973-74 to 1982-83  by  the Electricity  Supply  Division. The respondents  filed  their claims,  under  clause 13, with the Chief  Engineer  denying their  liability to pay any such charges because  the  Board did  not supply constant supply as provided in clause 1.  It was alleged that during the period in question due to  trip- pings, load-sheding and power-cut the respondents suffered a great  loss. The Chief Engineer negatived the claims of  the respondents.     A  batch of writ petitions was filed in the High  Court, challenging  the  order of the Chief Engineer.  Although  in these petitions relief sought was proportionate reduction of

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the annual minimum guarantee 169 bills but in view of the interpretation of clauses 1, 4  and 13 the High Court quashed the demand made by the Electricity Board  by holding that under clause 1 it was  incumbent  for the Electricity Board to supply constant electricity  supply and that the consumers will be liable to pay annual  minimum guarantee  charges only if the Board supplies the  power  as provided in the agreement but the consumer does not  utilise the power.     In  these appeals by Special Leave, it was contended  on behalf  of  the appellants that the ’constant  supply’  men- tioned  in  clause I cannot mean  ’continuous  supply’.  The respondent-consumers  could  not deny the liability  to  pay annual  minimum  guarantee bills if  the  Electricity  Board could  not supply power for all the 24 hours due to  circum- stances beyond the control of the Electricity Board. In case of  shortage of supply due to circumstances beyond the  con- trol  of the Board the consumers were entitled to a  propor- tionate reduction under clause 13 of the agreement. Allowing the appeals, the Court,     HELD:  1. The High Court was not right in coming to  the conclusion  that the respondents were not liable at  all  to pay the annual minimum guarantee charges. [175C]     1.1.  The High Court in its judgment clearly stated  the hours every year in dispute when the power was not  supplied and  on  this basis the respondent*consumers  will  only  be entitled  to proportionate reduction as ordinarily the  con- sumers are expected to have continuous power supply.  Clause 13  clearly provides for the proportionate reduction of  the annual minimum guarantee bills. [175D]     2.  Clause  1  talks of constant  supply  of  electrical energy  providing for voltage, cycles, phases and wires.  It does  not talk of either of continuous or non-continuons  or intermittent supply. [173E]     3.  The Respondent consumers are entitled to  a  propor- tionate reduction of the minimum guarantee bill. The inabil- ity of the Electricity Board to supply electrical energy due to power cut or any other circumstance beyond its control as per  the  demand of the consumer according to  the  contract will be reflected in and considered as a circumstance beyond the control of the consumer which prevented it  from consum- ing  electricity  as per the contract and to  the  extent-it wanted to consume. [173G] 170     Northern India Iron & Steel Co. etc. v. State of Haryana JUDGMENT:     4.  The  Chief Engineer of the Electricity  Board  shall accordingly assess the proportionate reduction of the annual minimum guarantee bills in respect of disputed years on  the basis of non supply as indicated in the High Court Judgment. [175D-E]     4.1. Pending assessment, the power supply of the consum- ers will not be disconnected on the ground of failure to pay the annual minimum guarantee bills. [175E]     4.2.  The  Electricity Board will be  entitled  to  take recourse  to the normal procedure if the consumers  fail  to pay  after  the proportionate reduction is  made  and  fresh demand is made. [175E-F]     Amalgamated  Electricity  Co. Ltd. v.  Jalagaon  Borough Municipality,  [1976] 1 SCR 636; M/s. Man Industrial  Corpo- ration v. Rajasthan State Electricity Board and others,  AIR 1986  Rajasthan 137 and Mukand Iron and Steel Works Ltd.  v. Maharashtra  State Electricity Board and another,  AIR  1982 Bombay 580, referred to.

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&     CIVIL  APPELLATE JURISDICTION: Civil Appeal Nos.  156164 of 1989.     From the Judgment and Order dated 24.7.1987 and 7.4.1988 of  the  Patna  High  Court  in  C.W.J.C.  Nos.  253,   266, 262,255,260 265, 555,254 of 1986 and C.W.J.C. No. 17 of 1988 respectively. Dr. Y.S. Chitale and Pramod Swarup for the Appellants. N.R. Choudhary and L.R. Singh for the Respondents. The Judgment of the Court was delivered by OZA, J. Leave granted.     These  special leave petitions have been  filed  against the  judgment  of the High Court of Patna by  which  several writ  petitions  were disposed of. All these  special  leave petitions  have  been preferred in this Court  aggrieved  by that judgment. The common question which arises in all these SLPs  is  that under the agreement arrived  at  between  the consumers  and the Bihar State Electricity Board there is  a clause 171 Of payment of minimum guarantee which indicates that even if the consumer does not consume electricity above the  minimum guarantee that it will be incumbent upon the consumer to pay charges  for  energy which is the annual  minimum  guarantee provided in the agreement pertaining to Industrial units.     The  relevant  facts are that for the years  1973-74  to 1982-83  the bills for annual minimum guarantee were  served on  the  appellants  by  the  Electricity  Supply  Division, Forbesganj and on receipt thereto the appellants filed their claims  as provided under clause 13 of the agreement on  the ground that appellant was not liable to pay any such charges because the appellant did not supply constant electricity as provided in the agreement during the period in question  and there  were  tripping, load shedding,  and  power-cut  which resulted  in  a  great loss to the petitioners  and  as  the supply was not in accordance with the agreement liability to pay annual minimum guarantee bills could not be fastened  on the consumer. The Chief Engineer who was the authority under the  agreement  negatived the claim and so they  filed  writ petitions in the High Court.     The  High  Court by the impugned judgment  came  to  the conclusion  that  under  clause 1 of the  agreement  it  was incumbent  for  the  Electricity Board  to  supply  constant electricity  and the consumer will be liable to  pay  annual minimum guarantee charges only if in spite of the fact  that the  Board supplies power as contemplated in  the  agreement and the consumer does not utilise the power then the liabil- ity  to pay annual minimum guarantee charges will arise  and on  this basis the High Court quashed the demands  made  for these  years on the basis of annual minimum guarantee as  it found  that power was not supplied according to  the  agree- ment.     Learned  counsel  appearing for  the  Electricity  Board contended  that  clause 1 of the agreement does not  in  any manner  mean that there should be a continuous  supply.  The term  used in clause 1 of the agreement only talks  of  con- stant supply of electrical energy at the pressure of  volts, cycles, 3 phase, 3 wire etc. but it does not talk of contin- uous supply without any break and it therefore could not  be contended  that if there was no supply for a few minutes  it will amount to failure on the part of the Electricity  Board to  provide constant supply. It was contended that the  con-

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stant  supply  cannot mean continuous supply.  It  was  also contended  that clause 4 of the agreement clearly  talks  of the  payment of annual minimum guarantee charges and  there- fore  it could not be said that because of the power cut  or situations beyond the 172 control  of the Electricity Board if the power could not  be supplied  for  all  the 24 hours every  day  the  respondent consumer can deny the liability to pay annual minimum  guar- antee bills. It was also contended that in view of clause 13 of  the agreement which provides that if there was  shortage of  supply and that shortage resulted in short  supply  then the  consumer was entitled to a proportionate  reduction  of the annual minimum guarantee bill as determined by the Chief Engineer, Bihar State Electricity Board and consequently the respondent  in  this  case went to the  Chief  Engineer  who ultimately  decided on the basis of facts  that  respondents were not entitled to any proportionate reduction and it  was because  of  this that the petitions were filed  before  the High Court. It was contended that the learned Judges of  the High Court have failed to appreciate clause 13 of the agree- ment. Learned counsel also placed reliance on the  decisions in  Amalgamated  Electricity  Co. Ltd.  v.  Jalgaon  Borough Municipality,  [1976] 1 SCR 636; M/s Northern India  Iron  & Steel Co. etc. v. State of Haryana & Anr., [1976] 2 SCR 677; M/s Man Industrial Corporation v. Rajasthan State Electrici- ty Board and others, AIR 1986 Rajasthan 137 and Mukand  Iron and Steel Works Ltd. v. Maharashtra State Electricity  Board and another, AIR 1982 Bombay 580.     Learned  counsel for the respondents on the  other  hand contended  that  clause 1 provides for  constant  supply  of power, the variations permitted have been indicated in  this clause itself and it is contended that it is only where  the electricity  Board  discharges its duty to supply  power  as contemplated  in  clause 1 and the consumer because  of  his difficulties  is  not able to utilise power  even  upto  the level of minimum guarantee that the liability to pay  annual minimum  guarantee bills could be fastened on  the  consumer but if the Board fails to discharge its responsibilities  as contemplated  in  clause  1 of the agreement  it  could  not compel the consumer to pay the annual minimum guarantee.  It was frankly conceded that in the petition itself  originally relief  sought  was proportionate reduction  of  the  annual minimum guarantee bills but in view of the interpretation of clauses  1, 4 and 13 the High Court came to  the  conclusion that  there  is no liability on the consumer to  pay  annual minimum guarantee bills as the Electricity Board has  failed to  supply power as contemplated in clause 1 of  the  agree- ment.  Learned  counsel  however contended  that  the  Chief Engineer in his order has misunderstood the whole  situation but before the High Court the facts were not disputed and in each  case average hours of supply per year during the  dis- puted  period have been stated which have not been  disputed by the Electricity Board and if at all the High Court  judg- ment is not maintained the respondents are entitled to 173 proportionate  reduction  of the  annual  minimum  guarantee bills  in  the light of the hours of supply per  year  which have  been  stated  in the High Court judgment  and  is  not disputed.               Clause 1 of the agreement reads as under:               "1. (a) The Board shall furnish to the consum-               er and the consumer shall accept at the  point               of supply mentioned in the schedule hereto, on               and  from the date on which the said  premises

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             shall be connected with the supply  Distribut-               ing  mains and during the continuance  of  the               agreement,  a  constant supply  of  electrical               energy at the pressure of  ......               Volts, 50 cycles, 3 phases, 3 wires, alternat-               ing current system subject to standard  varia-               tions as provided in Indian Electricity               Rules,  1956 or any other statutory  modifica-               tion  thereof as may be in force from time  to               time  for  the purpose and  upto  the  maximum               specified  (hereinafter  referred  to  as  the               contract demand) and under the conditions laid               down in the Schedule." This  clause talks of constant supply of  electrical  energy providing for voltage, cycles, phases and wires. It is clear that it does not talk of continuous supply nor does it  talk of  non-continuous  or  intermittent supply.  In  fact  this clause in our opinion is not very material for the  decision of the case as the sole controversy pertains to  interpreta- tion of clause 13.     Clause  4  of  the agreement provides  for  the  minimum guarantee  and there is no dispute that if the  consumer  is not  able  to  utilise electricity even upto  the  level  of minimum  guarantee.  This  clause provides  for  payment  of charges of minimum guarantee. The real controversy  pertains to  the  interpretation of clause 13. In  fact  in  Northern India Iron & Steel Co. case. [1976] 2 SCR 677 this Court had the occasion to consider a situation of this kind where this Court  on this aspect of the matter has observed that  where the  Electricity  Board  fails to supply  power  because  of shortage of energy, power cut or any other circumstances  as per demand of the consumer according to the contract it will be  considered as a circumstance beyond the control  of  the consumer  which prevented it from consuming  electricity  as per the contract. Their Lordships observed as under: 174                         "We are, therefore, of the view that               the inability of the Board to supply  electric               energy  due to power cut or any other  circum-               stance beyond its control as per the demand of               the consumer according to the contract will be               reflected in and considered as a  circumstance               beyond  the  control  of  the  consumer  which               prevented it from consuming electricity as per               the  contract and to the extent it  wanted  to               consume.  The  monthly  demand  charge  for  a               particular  month will have to be assessed  in               accordance  with subclause (b) of clause 4  of               the tariff and therefore from a  proportionate               reduction  will  have to be made as  per  sub-               clause  (f).  We  hope, in the  light  of  the               judgment,  there  will  be  no  difficulty  in               working  out the figures of the  proportionate               reduction  in  any of the cases  and  for  any               period.  In case of any difference or  dispute               as to the quantum of the demand charge or  the               proportionate  reduction, parties will  be  at               liberty  to  pursue  their remedy  as  may  be               available to them in accordance with law." It appears that reading clause 13 in the present case clear- ly  provides  for the contingency and it  provides  for  the failure on the part of the supplier and also failure on  the part  of  consumer in the circumstances like  strike,  riot, fire,  flood,  explosion or act of God or any  other  reason

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beyond  the control of either of the parties. Clause  13  of the agreement reads:               "If at any time the consumer is prevented from               receiving or using the electrical energy to be               supplied under this agreement either in whole,               or  in  part  due  to  strikes,  riots,  fire,               floods,  explosions, act of God or  any  other               case reasonably beyond control or if the Board               is  prevented  from  supplying  or  unable  to               supply such electrical energy owing to any  or               all  of  the causes mentioned above  then  the               demand charge and guaranteed energy charge set               out  in the schedule shall be reduced in  pro-               portion to the ability of the consumer to take               or  the  Board to supply such  power  and  the               decision  of the Chief Engineer,  Bihar  State               Electricity  Board, in this respect  shall  be               final." In view of this language of the clause clearly providing for the proportionate reduction of the annual minimum  guarantee bills  it could not be doubted that the High Court  was  not right in coming to the conclusion that the respondents  were not liable to pay annual minimum 175 guarantee  bills  at all. The judgment of  this  Court  also clearly indicated that the respondents consumers. are  enti- tled  to a proportionate reduction of the minimum  guarantee bills. In clause 13 of the agreement this is clearly  stated that the authority competent to determine the  proportionate reduction  is the Chief Engineer and it appears that it  was because  of this that the respondents  consumers  approached the  Chief Engineer for consideration. But it  appears  that the  learned Chief Engineer also did not clearly  understand the meaning of clause 13. The judgment of the High Court  on which  reliance  is placed have only followed  the  judgment referred to above.     In our opinion, therefore, the High Court was not  right in  coming to the conclusion that the respondents  were  not liable  at all to pay annual minimum guarantee  charges.  In fact they are only entitled to the proportionate  reduction. The  judgment  of the High Court clearly  states  the  hours every year in dispute when the power was not supplied and on this  basis  the respondents consumers will be  entitled  to proportionate  reduction  as ordinarily  the  consumers  are expected  to have continuous power supply. It  is  therefore directed that the Chief Engineer of the Electricity Board on the  basis of hours of non supply as indicated in  the  High Court  judgment  and  not disputed in the  High  Court  will assess  the  proportionate reduction of the  annual  minimum guarantee bills in respect of disputed years indicated above and  it  is also directed that until this is  not  done  the power supply will not be disconnected on the basis of  fail- ure to pay the annual minimum guarantee bills for the  peri- ods stated above. However,-after the proportionate reduction is made and fresh demand is made, Electricity Board will  be entitled  to  take recourse to the normal procedure  if  the consumers fail to pay. In the circumstances no order as to costs. T.N.A.                                Appeals allowed. 176