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CASE NO.: Appeal (civil)  5976 of 2001

PETITIONER: Modi Tele Fibres Ltd

RESPONDENT: U.P. State Electricity Board & Ors

DATE OF JUDGMENT: 06/12/2007

BENCH: R.V. Raveendran & P. Sathasivam

JUDGMENT: JUDGMENT

CIVIL APPEAL NO. 5976 OF 2001

P. Sathasivam, J.

1)      This appeal is directed against the final judgment and  order dated 23.09.1999 passed by the Division Bench of the  High Court of Judicature at Allahabad in Civil Misc. Writ  Petition No. 37862 of 1999, whereby the High Court dismissed  the writ petition preferred by the appellant-herein.  

BACKGROUND FACTS: 2)      The appellant-Modi Tele Fibres Ltd. was carrying on  business of manufacturing threads at Modinagar, Dist.  Ghaziabad.  However, the appellant-Company started suffering  huge losses on account of various factors such as fall in  production, non-availability of capital funds for meeting  operational expenses etc. which were beyond the control of the  appellant.  The appellant, on 16.06.1994, wrote a letter to  respondent No.1-U.P. State Electricity Board (hereinafter  referred to as the ’UPSEB’) to provide electric supply directly to  the residential colonies as the appellant was unable to  continue the payment directly on account of lack of funds.  It  is pertinent to mention here that electricity to the residential  colonies is fed through Modi Tele Fibres Ltd. Service  Connection No. 1008.  The appellant-company entered into an  agreement on 30.09.1994 in supersession of an earlier  agreement dated 28.09.1983, with the UPSEB for supply of  electricity for 4000 KVA load of 11 KV voltage through the  above-said Service Connection.  It is also pertinent to mention  that an amount of Rs.67,46,700/- is lying with the UPSEB as  security, whereas the appellant has already been paying  regularly the bills for the electricity consumed by the company  and the residential colonies.  The appellant wrote another  letter on 30.06.1995 to the UPSEB informing that an  application has been made to the State Government for closing  down of the unit and the UPSEB should discontinue  permanently the supply of electrical energy to the appellant  vide S.C. No. 1008 reiterating its earlier request to provide  separate domestic connection to residential colonies.  It was  also reiterated that w.e.f. 01.08.1995, the appellant-company  shall not be liable for the supply made. Despite repeated  requests, the UPSEB continued to supply electricity through  the service connection to the company as well as the  residential colonies at commercial rates.  In reply, respondent  No.2, vide letter dated 13.07.1995, informed the appellant that

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only the person who had signed the agreement with the  UPSEB is empowered to apply for permanent disconnection  and the request of the appellant for permanent disconnection  was not being considered.  Thereafter, on 07.08.1995, the then  Chairman of the appellant-Company who had signed the  agreement wrote a letter for permanent disconnection and to  provide separate domestic connections to the residential  colonies reiterating that w.e.f. 06.09.1995, the Company shall  not be liable for the supply.  Thereafter, on 04.09.1995,  because of the heavy losses being incurred, the appellant- company had to effect permanent closure and a notice of  closure dated 02.09.1995 was issued to all the employees.  It  is an admitted position that the company w.e.f 04.09.1995  was not using any electric power for its factory, but electricity  was being given to the residential colonies through service  connection No. 1008. The appellant also brought to the notice  of UPSEB that for realizing the electricity dues from the  residents of the colony, the High Court, in a similar case,  passed an order in pursuance of which bills directly were  charged from the persons occupying the residential quarters.   Under these circumstances, the appellant again requested that  it would hand over all the infrastructure free of cost which is  already used to provide separate domestic connection to the  residential colonies and asked to immediately discontinue  electric supply through the service connection.  However, no  heed was paid to the request of the appellant and UPSEB kept  on sending bills including the bills of electricity consumed by  the residential quarters.  In the meantime, Punjab National  Bank which extended financial assistance to the appellant  initiated recovery proceedings before the Debts Recovery  Tribunal.  The Tribunal passed an interim order whereby the  appellant was restrained from leasing out the factory  premises.  Against that order, the appellant filed a petition  under Article 227 of the Constitution before the Delhi High  Court, which vide order dated 08.03.1999 allowed the  appellant to lease out the factory with a direction that 50% of  the rent amount shall be paid directly to the Punjab National  Bank.  Thereafter, 50% of the rent is being received by the  Bank and 50% rent by the appellant from the lessee.  3)      On 24.02.1999, UPSEB raised a bill demanding  Rs.11,35,80,301/- from the appellant for the period from  April, 1995 to February, 1999 which includes electric supply  to the factory and to the residential quarters, surcharge,  penalty etc.  The appellant raised an objection to the said bill  on 24.04.1999 stating that it has repeatedly objected  inasmuch as firstly after closure of the factory on 04.09.1995  no electricity was being consumed and was used by the factory  and the bills pertain to consumption by the residential  quarters for which it had time and again requested for a  separate connection.   

4)      On 24.07.1999 the Sub-Divisional Magistrate,  Modinagar, Dist. Ghaziabad issued an order to the lessee \026  Lucky Tex Spinners Pvt. Ltd. directing that since an amount of  Rs.11,61,61,574.31 is due on the appellant as Government  dues 50% of the rent amount was attached and further  directed to pay the same by pay order every month directly to  the Tehsildar.  The UPSEB again issued a bill on 31.07.1999  for a sum of Rs.13,40,42,018/-.  In the meantime, the  appellant made a reference to the BIFR under Section 15 of  the Sick Industrial Companies Act.  On 20.08.1999, the  appellant sent its objection reiterating the stand that they  were not liable to pay and returned the bills to the UPSEB for  cancellation.   Being aggrieved by the order passed by the Sub  Divisional Magistrate, the appellant filed a writ petition in the

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High Court.  The Division Bench of the High Court by order  dated 23.09.1999 dismissed the writ petition on the ground  that merely because the appellant had informed the UPSEB to  provide separate domestic connections to the residential  colonies knowing fully well that they were already consuming  power through service connection No. 1008 in accordance with  the terms of the agreement, the liability will not cease. The  High Court was of the view that while on the one hand there  was a prayer for disconnection but on the other hand regular  consumption not for a short period, but for years, the only  conclusion was that the consumer was enjoying the power  supply and therefore the liability to pay for the power  consumed must be upheld.  Dissatisfied with the order of the  High Court the appellant preferred the above appeal.   

5)      We heard Mr. Rajiv Dutta, learned counsel for the  appellant and Mr. Pradeep Misra, learned counsel for the  respondents.        

6)      The grievance of the appellant is that even after the  closure of their mill and in spite of requests by way of letters  and reminders for stopping the electrical supply to the  residential colony and for providing a separate metre  connection to the residential quarters of their employees, the  respondent-UPSEB was unjustifiably claiming power  consumption charges from the appellant herein.    Alternatively, it was submitted that it had made payment upto  March, 1995.  However, if the bills for the period upto the date  of closure (i.e. upto 10.09.1995) are to be taken into account,  then for the period from 01.04.1995 to 10.09.1995, the total  amount of bills comes to Rs.1,14,10,734.00 Out of the above,  a sum of Rs.49,84,894/- is on account of supply of electricity  to the residential quarters which the appellant is not liable to  pay as it had sent a notice in June, 1994.  In this regard, the  admitted liability of the appellant is up to 10.09.1995 which  comes to Rs.64,25,840.00.  The appellant had a security  deposit of Rs.67,46,700/- with the UPSEB and after adjusting  the same, it is entitled to receive a sum of Rs.3,20,860/- from  the UPSEB.

7)      It is not in dispute that the appellant was provided  electric connection No. 1008 for supply of electrical energy and  an agreement had been executed on 30.09.1994 for supply of  4000 KVA electric load.  In the counter affidavit filed on behalf  of respondent-UPSEB, it has been specifically stated that the  UPSEB, the predecessor in the interest of UP Power  Corporation, has no distributing means or any kind of control  for contribution and supply of electrical energy to the  residential colonies of the workers of the appellant.  In fact in  the counter affidavit the Board has stated that they were not  aware about arrangements made by the appellant for supply of  power to their workers and the terms and conditions for such  supply as to whether it was free supply or whether the cost of  electricity consumed was being deducted from their wages.   According to them, the appellant was their consumer and bulk  supply of 4000 KVA was being given to it and no bifurcation in  the connection as industrial or residential.  

8)      Learned counsel appearing for the appellant, by drawing  our attention to various clauses in the agreement and requests  made by them in the form of letters seeking for dis-connection  of power supply to the residence of their employees and  providing separate meter for their colonies, contended that the  respondents were not justified in demanding the amount as if  arrears of power consumed by them.  We verified the requests

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made by the appellant.  As rightly pointed out by the  respondents and in fact it was not disputed that electrical  connection was provided to the appellant-factory in service  connection No 1008 for supply of electrical energy and an  agreement had been executed for the same on 30.09.1994 and  supply to residential colony was made by appellant under  service connection No. 1008 of appellant.  Therefore, appellant  cannot escape liability for electricity consumed in the  residential colony.  It should also be noted that the requests  for permanent disconnection made by appellant on  30.06.1995, 13.07.1995 and 07.08.1995 could not be acted  upon as under the terms of the supply agreement dated  30.09.1994, there could be no request for termination before  the end of two years.  Significantly there was no letter for  permanent disconnection after the two year period, that is  after 30.09.1996.  Insofar as letter dated 16.06.1994  requesting for electricity supply to residential quarters, it has  to be ignored in view of the subsequent agreement dated  30.09.1994 without separating supply to residential colony.      9)      As rightly stated in para 15 of the additional affidavit  filed on behalf of the UP Power Corporation, in case the  appellant did not want to supply the electricity to the  residential colonies of their workers they could have switched  off the supply form their distributing mains which were in  their custody and possession.  Admittedly, the appellant  having such a course available, did not do so because of their  anticipation that law and order problem would arise.  Having  failed to disconnect the electricity supply themselves, the  appellant can not blame the respondents for not disconnecting  the supply.  It is true that pursuant to the requests made by  the appellant, the respondents/Board could have provided  separate connection for the residential connections in their  colonies for the benefit of appellant’s employees.  However, as  pointed out in the additional affidavit necessary charges,  namely, costs and expenses for separate domestic connections  were not paid.  On the other hand, the appellant was drawing  power to their residential colonies in order to provide  uninterrupted supply to their employees.  In those  circumstances and in the light of the specific information  furnished in the additional affidavit particularly in paras  4,8,12 and 15, we are unable to accept the stand taken by the  appellant.   

10)     With the materials place before us, we are satisfied that  the appellant being consumer and consumed electricity  through their service connection No. 1008 it has to pay the  amount for the same.  We are also of the view that the  appellant could have taken effective steps for providing  separate power connection to the residential colony of their  employees by approaching the respondents depositing  necessary charges, cost and by complying with the provisions  of the Indian Electricity Act, the Electricity Supply Act, rules  and regulations made therein, which they failed to do.  All the  relevant aspects have duly been considered and rightly  rejected by the High Court.  In regard to the alternative  contentions relating to excessive billing and non-adjustment of  security deposit, these factual aspects were not urged before  the High Court and cannot be urged for the first time before  us.  If there is any error in calculation of the amount shown as  due, it is open to the appellant to take up that issue separately  with the respondents.

11)     We do not find any ground for interference, consequently,  the appeal fails and the same is dismissed.  However, there  shall be no order as to costs.