REPORTABLE

                IN THE SUPREME COURT OF INDIA

            CIVIL APPELLATE JURISDICTION

             CIVIL APPEAL NO.9651 OF 2003

 Municipal Committee, Hoshiarpur                         …. Appellant

                   VERSUS

Punjab State Electricity Board & Ors.                …. Respondents

J U D G M E N T

Dr. B.S. CHAUHAN, J.

1. This appeal has been preferred against the judgment and decree  

dated 12.1.2001 passed in Regular Second Appeal No.1618 of 1998  

by the High Court of Punjab & Haryana at Chandigarh, reversing the  

judgment  and  decree  of  the  trial  Court,  as  well  as  of  the  First  

Appellate Court.

Facts:

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2. Facts and circumstances giving rise to this appeal are that the  

Municipal Committee, Hoshiarpur (hereinafter called the ‘appellant’)  

had  taken  an  electricity  connection  on  15.6.1992,  for  running  a  

tubewell, from the Punjab State Electricity Board (hereinafter called  

the ‘Board’),  for supplying water for daily use to the public of the  

locality at large. The average bill for the consumption of electricity of  

the said connection used to be around Rs.5,000/- per month and the  

said  amount  was  paid  regularly  by  the  appellant.   A  bill  dated  

11.3.1994 to the tune of Rs.82,300/- was served upon the appellant by  

the Board.  As the bill was very high, the appellant instead of making  

the  payment,  filed  suit  No.  304  of  1994  before  the  Civil  Court  

challenging the said bill.   The Board contested the Suit  by filing a  

written statement contending that the connection had not been made  

properly and on checking, one of the Current Trap Potents (hereinafter  

called ‘CT’) was found to be reversed, thereby nullifying the action of  

second CT, as a result of which only one CT was contributing to the  

recording  of the energy actually consumed.  The meter was showing  

only  1/3rd of  the  actual  consumption  of  the  energy,  and  once  the  

proper connection was made, the reading of the meter jumped three  

times.  In view thereof, the account of the said meter was overhauled  

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from the date of its installation and the fresh bill was rightly issued.  

The appellant  filed  a  replication  contending that  no opportunity  of  

hearing  was  given  to  it  before  revising  the  bill  nor  was  the  

checking/inspection done in the presence of any responsible officer of  

the appellant. No notice was ever given by the Board to the appellant  

for inspection. More over, the appellant was not in a position to pass  

on the liability to its consumers.   

3.      After considering the facts and circumstances of the case and  

appreciating the evidence on record, the trial Court vide its judgment  

and decree dated 22.5.1995, decreed the suit.  The trial Court came to  

the conclusion that appellant had not made any attempt to tamper with  

the meter nor committed theft of energy.  The defect was due to the  

negligence of the Board, and the appellant could not be burdened for  

the same.  The trial  court  declared the said revised bill  as  null  and  

void.   Being  aggrieved,  the  respondent-Board  preferred  an  appeal  

before the District Judge and the same was dismissed vide judgment  

and decree dated 30.9.1997, holding that there was no justification for  

the respondent-Board to issue a supplementary bill arbitrarily.   

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4.      Being aggrieved, the respondent-Board preferred Second Appeal  

No.1618 of 1998 before the High Court which has been allowed vide  

impugned judgment and decree dated 12.1.2001, observing that after  

correcting the wrong connection, the reading of the meter   jumped  

three times and therefore, from the very beginning only 1/3rd of the  

electric  energy  actually  consumed  stood  recorded  by  the  meter.  

Therefore, such a recovery was justified and there could be no equity  

in  favour  of  the  appellant  to  withhold  the  payment.   Hence,  this  

appeal.

Rival Contentions:

5.        Shri K.K. Mohan, learned counsel appearing for the appellant,  

submitted that the High Court committed a grave error in deciding the  

Second Appeal without meeting the mandatory requirement of Section  

100 of the Code of Civil Procedure, 1908 (hereinafter called ‘CPC’)  

as no substantial question of law had been framed by the High Court.  

The  bill  was  revised  without  giving  any  show  cause  notice  or  

opportunity of hearing to the appellant. The High Court recorded a  

perverse finding that after  the correct/proper  connection was made,  

the meter reading jumped to three times the previous readings.  The  

High Court failed to note that for certain months subsequent to the  

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correction of connection, the reading shown by meter was less than  

what had been shown prior to the correction,  i.e.,  November 1993.  

The appeal deserves to be allowed.   

6.      On  the  contrary,  Shri  Satinder  S.  Gulati,  learned  counsel  

appearing  for  the  respondent-Board,  has  vehemently  opposed  the  

appeal  contending that  it  was not  that  the  appellant  had made any  

attempt to commit theft of energy or tampered with the meter.  It was  

merely a fault/negligence on the part of the respondent-Board that the  

proper  connection  of  the  meter  had  not  been  made  and  after  

connecting the meter properly the meter readings had shown 3 times  

the consumption of electricity shown earlier.  Thus, it was a case of  

recovery of the amount that was due in accordance with law and as  

per  the  actual  total  consumption  of  energy.   The  High  Court  was  

justified in re-appreciating the facts without formulating a substantial  

question of law in view of the provisions of Section 103 CPC.  More  

so, the appellant has not shown what prejudice has been caused to it,  

if the High Court did not frame a substantial question of law and no  

opportunity of hearing was given to it by the Board before revising the  

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bill. Thus, no interference is called for and the appeal is liable to be  

dismissed.

7.      We have considered the rival submissions made by the learned  

counsel for the parties and perused the record.  

LEGAL ISSUES:

Second Appeal: Sections 100 & 103 C.P.C.:  

8. These  provisions  provide  for  the  conditions  precedent  for  

entertaining a Second Appeal and the specific manner of its disposal.  

Section 100 CPC reads as follows:  

“100.  Second  Appeal.-(1)  Save  as  otherwise   expressly provided in the body of this Code or by  any  other  law  for  the  time  being  in  force,  an   appeal  shall  lie  to  the  High  Court  from  every   decree passed in appeal by any Court subordinate   to the High Court, if  the High Court is satisfied   that  the  case  involves  a  substantial  question  of   law.

(2) ……………………………………..

(3) In  an  appeal  under  this  section,  the  memorandum of appeal shall precisely state   the substantial question of law involved in   the appeal.

(4) Where  the  High  Court  is  satisfied  that  a   substantial  question  of  law  is  involved  in   any case, it shall formulate that question.

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(5) The appeal shall be heard on the question  so formulated and the respondent shall, at   the  hearing  of  the  appeal,  be  allowed  to   argue that  the  case  does not  involve  such  question.

       ……………………………………………………”

Section 103 CPC reads as under:

“103. Power of High Court to determine issue of   fact.—In any second appeal, the High Court may,   if  the  evidence  on  the  record  is  sufficient,   determine any issue necessary for the disposal of   the appeal,— (a) which has not  been determined by the lower  appellate  court  or  both  by  the  court  of  first   instance and the lower appellate court, or (b) which has been wrongly determined by such   court  or courts  by reason of a decision on such  question of law as is referred to in Section 100.”

9. In  Kondiba Dagadu Kadam v.  Savitribai  Sopan Gujar &  

Ors., AIR 1999 SC 2213, this Court held as under:-

“It has to be kept in mind that the right of appeal   is neither a natural nor an inherent right attached   to  the  litigation.  Being  a  substantive  statutory   right it has to be regulated in accordance with law  in  force  at  the  relevant  time.  The  conditions   mentioned in the section must be strictly fulfilled   before an appeal can be maintained and no Court   has the power to add to or enlarge those grounds.   The appeal cannot be decided on merit on merely   equitable grounds.”

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10. Further, there can be no quarrel that the right of appeal/revision  

cannot  be  absolute  and  the  legislature  can  impose  conditions  for  

maintaining the same. In  Vijay Prakash D. Mehta & Jawahar D.  

Mehta v. Collector of Customs (Preventive), Bombay,  AIR 1988  

SC 2010, this Court  held as under:-

“Right to appeal is neither an absolute right nor   an ingredient of natural justice, the principles of   which must  be followed in all  judicial  or quasi- judicial  adjudications.  The  right  to  appeal  is  a   statutory right and it can be circumscribed by the   conditions  in  the  grant  ..……......The  purpose  of   the Section is to act in terrorem to make the people   comply with the provisions of law.”

11. A similar view has been reiterated by this Court in Anant Mills  

Co.  Ltd.  v.  State  of  Gujarat, AIR  1975  SC  1234;  and  Shyam  

Kishore & Ors. v. Municipal Corporation of Delhi & Anr., AIR  

1992 SC 2279. A Constitution Bench of this court in Nandlal & Anr.  

v.  State  of  Haryana,  AIR 1980  SC 2097,  held  that  the  “right  of  

appeal  is  a  creature  of  statute  and  there  is  no  reason  why  the  

legislature, while granting the right,  cannot impose conditions for  

the  exercise  of  such  right  so  long  as  the  conditions  are  not  so  

onerous as to amount to unreasonable restrictions rendering the right  

almost illusory”.  

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12. In  Gujarat  Agro  Industries  Co.  Ltd.  v.  Municipal  

Corporation of the City of Ahmedabad & Ors., (1999) 4 SCC  468,  

this  Court  held  that  the  right  of  appeal  though  statutory,  can  be  

conditional/qualified and such a law cannot be held to be violative of  

Article 14 of the Constitution. An appeal cannot be filed unless so  

provided for under the statute and when a law authorises filing of an  

appeal, it can impose conditions as well.

13. Thus, it is evident from the above that the right to  appeal is a  

creation of Statute and it cannot be created by acquiescence of the  

parties or by the order of the Court. Jurisdiction cannot be conferred  

by mere acceptance, acquiescence, consent or by any other means as it  

can be conferred only by the legislature and conferring a  Court  or  

Authority  with  jurisdiction,  is  a  legislative  function. Thus,  being a  

substantive statutory right, it has to be regulated in accordance with  

the law in force, ensuring full compliance of the conditions mentioned  

in the provision that creates it. Therefore, the Court has no power to  

enlarge  the  scope  of  those  grounds  mentioned  in  the  statutory  

provisions. A second appeal cannot be decided merely on equitable  

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grounds  as  it  lies  only  on  a  substantial  question  of  law,  which  is  

something  distinct  from  a  substantial  question  of  fact.  The  Court  

cannot entertain a second appeal unless a substantial question of law  

is  involved,  as  the  second  appeal  does  not  lie  on  the  ground  of  

erroneous findings of fact  based on an appreciation of the relevant  

evidence. The existence of a substantial question of law is a condition  

precedent for entertaining the second appeal, on failure to do so, the  

judgment  cannot  be  maintained.   The  existence  of  a  substantial  

question of law is a sine-qua-non for the exercise of jurisdiction under  

the provisions of Section 100 C.P.C. It is the obligation on the Court  

to further the clear intent of the Legislature and not to frustrate it by  

ignoring  the  same.  (Vide:  Santosh Hazari  v.  Purshottam Tiwari  

(dead)  by  Lrs.,  AIR 2001 SC 965;  Sarjas  Rai  & Ors.  v.  Bakshi  

Inderjeet Singh, (2005) 1 SCC 598; Manicka Poosali (Deceased by  

L.Rs.) & Ors. v. Anjalai Ammal & Anr., AIR 2005 SC 1777; Mst.  

Sugani  v.  Rameshwar  Das  &  Anr.,  AIR  2006  SC  2172;  Hero  

Vinoth  (Minor) v.  Seshammal,  AIR  2006  SC  2234;  P.  

Chandrasekharan & Ors. v. S. Kanakarajan & Ors., (2007) 5 SCC  

669; Kashmir Singh v. Harnam Singh & Anr., AIR 2008 SC 1749;  

V. Ramaswamy v. Ramachandran & Anr., (2009) 14 SCC 216; and  

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Bhag Singh v. Jaskirat Singh & Ors., (2010) 2 SCC 250).

14. In  Mahindra & Mahindra Ltd. v. Union of India & Anr.,  

AIR 1979 SC 798, this Court observed:  

  “..... It is not every question of law that could be  permitted to be raised in the second appeal. The  parameters within which a new legal plea could be  permitted to be raised,  are specifically  stated in   Sub-section (5) of Section 100. Under the proviso,   the  Court  should  be  ‘satisfied’  that  the  case  involves a substantial  question of law and not a   mere question of  law. The reason for  permitting  the substantial question of law to be raised, should  be recorded by the Court. It is implicit therefrom  that  on  compliance  of  the  above,  the  opposite   party  should  be  afforded  a  fair  or  proper  opportunity to meet the same. It is not any legal   plea that  would be alleged at  a stage of  second  appeal. It should be a substantial question of law.   The reasons for permitting the plea to be raised   should also be recorded.”  

15. In  Madamanchi Ramappa & Anr. v. Muthaluru Bojjappa,  

AIR 1963 SC 1633, this Court observed:  

“………Therefore,  whenever  this  Court  is   satisfied that in dealing with a second appeal, the   High Court has, either unwittingly and in a casual   manner,  or  deliberately  as  in  this  case,   contravened the limits prescribed by Section 100,   it becomes the duty of this Court to intervene and   give effect to the said provisions. It may be that in   some  cases,  the  High  Court  dealing  with  the  second  appeal  is  inclined  to  take  the  view  that   

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what it regards to be justice or equity of the case   has  not  been  served  by  the  findings  of  fact   recorded by courts of fact; but on such occasions   it  is  necessary  to  remember  that  what  is   administered in courts is justice according to law  and considerations of fair play and equity however   important  they  may  be,  must  yield  to  clear  and  express  provisions  of  the  law.  If  in  reaching its   decisions  in  second  appeals,  the  High  Court   contravenes the express provisions of Section 100,   it would inevitably introduce in such decisions an   element of disconcerting unpredictability which is   usually  associated  with  gambling;  and that  is  a   reproach which  judicial  process  must  constantly   and scrupulously endeavour to avoid.”

16.    In Jai Singh v. Shakuntala, AIR 2002 SC 1428, this Court held  

as under:

“….it  is  only  in  very  exceptional  cases  and  on  extreme perversity  that  the  authority  to  examine   the  same in  extenso  stands  permissible  -  it  is  a   rarity rather than a regularity and thus it can be  safely concluded that while there is no prohibition   as such, but the power to scrutiny can only be had  in  very  exceptional  circumstances  and  upon  proper circumspection.”

17. While dealing with the issue, this Court in Leela Soni & Ors.  

v. Rajesh Goyal & Ors., (2001) 7 SCC 494,  observed as under:

“20. There can be no doubt that the jurisdiction of   the High Court under Section 100 of the Code of   Civil Procedure (CPC) is confined to the framing  of  substantial  questions  of  law  involved  in  the  

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second appeal and to decide the same. Section 101  CPC  provides  that  no  second  appeal  shall  lie   except  on the grounds mentioned in Section 100  CPC. Thus it is clear that no second appeal can be   entertained by the High Court on questions of fact,   much less can it  interfere in the findings of  fact   recorded by the lower appellate court. This is so,   not only when it is possible for the High Court to   take a different view of the matter but also when  the High Court finds that conclusions on questions   of  fact  recorded by the  first  appellate  court  are   erroneous.  21.  It  will  be  apt  to  refer  to  Section  103  CPC  which  enables  the  High  Court  to  determine  the  issues of fact:

xx xx xx

22.  The section, noted above, authorises the High  Court to determine any issue which is necessary  for the disposal of the second appeal provided the   evidence  on  record  is  sufficient,  in  any  of  the   following two situations: (1) when that issue has  not been determined both by the trial court as well   as  the  lower  appellate  court  or  by  the  lower   appellate court; or (2) when both the trial court as  well as the appellate court or the lower appellate   court  have  wrongly  determined  any  issue  on  a  substantial question of law which can properly be  the subject-matter of second appeal under Section  100 CPC.”                            

18. In Jadu Gopal Chakravarty v. Pannalal Bhowmick & Ors.,  

AIR 1978 SC 1329, the question arose as to whether the compromise  

decree had been obtained by fraud. This Court held that though it is a  

question of fact, but because none of the courts below had pointedly  

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addressed the question of whether the compromise in the case was  

obtained  by  perpetrating  fraud  on  the  court,   the  High  Court  was  

justified in exercising its powers under Section 103 C.P.C. to go into  

the  question.  (See  also  Achintya  Kumar  Saha  v.  M/s  Nanee  

Printers & Ors., AIR 2004 SC 1591)    

19. In Shri Bhagwan Sharma v. Smt. Bani Ghosh, AIR 1993 SC  

398,  this  Court  held  that  in  case  the  High  Court  exercises  its  

jurisdiction  under  Section 103 C.P.C.,  in  view of  the  fact  that  the  

findings of fact recorded by the courts below stood vitiated on account  

of  non-consideration  of  additional  evidence  of  a  vital  nature,   the  

Court may itself finally decide the case in accordance with Section  

103(b) C.P.C. and the Court must hear the parties fully with reference  

to the entire evidence on record with relevance to the question after  

giving notice to all the parties.  The Court further held as under:

“…..The  grounds  which  may  be  available  in   support  of  a plea that  the finding of  fact  by the   court  below is vitiated in law, does not by itself   lead  to  the  further  conclusion  that  a  contrary   finding has to be finally arrived at on the disputed  issue. On a re-appraisal of the entire evidence the   ultimate  conclusion  may  go  in  favour  of  either  party  and  it  cannot  be  pre-judged,  as  has  been   done in the impugned judgment..”.  

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20.      In Kulwant Kaur & Ors. v. Gurdial Singh Mann (dead) by  

LRs. & Ors., AIR 2001 SC 1273, this Court observed as under :

“Admittedly, Section 100 has introduced a definite   restriction on to the exercise of jurisdiction in a   second  appeal  so  far  as  the  High  Court  is   concerned.  Needless  to  record  that  the  Code  of   Civil  Procedure  (Amendment)  Act,  1976  introduced  such  an  embargo  for  such  definite   objectives and since we are not required to further  probe on that score, we are not detailing out, but   the  fact  remains  that  while  it  is  true  that  in  a   second appeal a finding of fact, even if erroneous,   will  generally  not  be  disturbed  but  where  it  is   found that the findings stand vitiated on wrong test   and on the basis of assumptions and conjectures   and resultantly  there is  an element of  perversity   involved therein, the High Court in our view will   be  within  its  jurisdiction  to  deal  with  the  issue.   This is, however, only in the event such a fact is   brought to light by the High Court explicitly and  the judgment should also be categorical as to the   issue of perversity vis-à-vis the concept of justice.   Needless to say however, that perversity itself is a  substantial question worth adjudication — what is   required is a categorical finding on the part of the   High Court as to perversity.

The  requirements  stand specified  in  Section  103  and  nothing  short  of  it  will  bring  it  within  the   ambit of Section 100 since the issue of perversity   will  also  come  within  the  ambit  of  substantial   question of law as noticed above. The legality of   finding  of  fact  cannot  but  be  termed  to  be  a   question of law. We reiterate however,  that there  must  be  a definite  finding  to  that  effect  in  the  judgment  of  the  High  Court  so  as  to  make  it   evident  that  Section  100  of  the  Code  stands  complied with.” (Emphasis added)

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                                                               21.    Powers under Section 103 C.P.C. can be exercised by the High  

Court only if the core issue involved in the case is not decided by the  

trial court or the appellate court and the relevant material is available  

on  record  to  adjudicate  upon  the  said  issue.  (See:  Haryana  State  

Electronics  Development  Corporation  Ltd.  &  Ors.  v.  Seema  

Sharma & Ors., (2009) 7 SCC 311)

22. Before powers under Section 103 C.P.C. can be exercised by  

the High Court in a second appeal, the following conditions must be  

fulfilled:

(i) Determination of an issue must be necessary  for the disposal of appeal;

(ii) The evidence on record must be sufficient to   decide such issue; and

(iii)  (a)   Such  issue  should  not  have  been  determined  either  by  the  trial  court,  or  by  the  appellate court or by both; or

         (b) such issue should have been wrongly   determined  either  by  trial  court,  or  by  the   appellate court, or by both by reason of a  decision   on substantial question of law.

           If the above conditions are not fulfilled, the High Court cannot  

exercise its powers under Section 103 CPC.  

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Thus, it is evident that Section 103 C.P.C. is not an exception to  

Section 100 C.P.C. nor is it meant to supplant it, rather it is to serve  

the same purpose. Even while pressing Section 103 C.P.C. in service,  

the High Court has to record a finding that it  had to exercise such  

power, because it found that finding(s) of fact recorded by the court(s)  

below stood vitiated because of perversity.  More so, such power can  

be  exercised  only  in  exceptional  circumstances  and  with  

circumspection, where the core question involved in the case has not  

been decided by the court(s) below.  

23. There is no prohibition on entertaining a second appeal even on  

a question of fact provided the Court is satisfied that the findings of  

fact recorded by the courts below stood vitiated by non-consideration  

of  relevant  evidence  or  by  showing  an  erroneous  approach  to  the  

matter i.e. that the findings of fact are found to be perverse. But the  

High Court cannot interfere with the concurrent findings of fact in a  

routine and casual manner by substituting its subjective satisfaction in  

place of that of the lower courts.  (Vide:  Jagdish Singh v. Natthu  

Singh, AIR 1992 SC 1604; Karnataka Board of Wakf v. Anjuman-

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E-Ismail  Madris-Un-Niswan, AIR  1999  SC  3067;  and   Dinesh  

Kumar v. Yusuf Ali, AIR 2010 SC 2679).

24.    If a finding of fact is arrived at by ignoring or excluding relevant  

material or by taking into consideration irrelevant material or if the  

finding  so  outrageously  defies  logic  as  to  suffer  from the  vice  of  

irrationality incurring the blame of being perverse, then the finding is  

rendered infirm in the eyes of law. If the findings of the Court are  

based on no evidence or evidence which is thoroughly unreliable or  

evidence that suffers from the vice of procedural irregularity or the  

findings  are  such that  no reasonable  person would have  arrived  at  

those findings, then the findings may be said to be perverse. Further if  

the findings are either  ipse dixit  of the Court or based on conjecture  

and surmises,  the judgment suffers from the additional infirmity of  

non-application of mind and thus, stands vitiated.  (Vide:  Bharatha  

Matha & Anr. v. R. Vijaya Renganathan & Ors.,  AIR 2010 SC  

2685)

25. In view of above, the law on the issue can be summarised to the  

effect that a second appeal lies only on a substantial question of law  

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and it is necessary to formulate a substantial question of law before  

the second appeal is decided.  

The issue of perversity itself  is a substantial  question of law  

and, therefore, Section 103 C.P.C. can be held to be supplementary to  

Section 100 C.P.C.,  and does not supplant it  altogether.  Reading it  

otherwise,  would  render  the  provisions  of  Section  100  C.P.C.  

redundant.  It is only an issue that involves a substantial question of  

law, that can be adjudicated upon by the High Court itself instead of  

remanding the case to the court  below, provided there is  sufficient  

evidence  on  record  to  adjudicate  upon  the  said  issue  and  other  

conditions mentioned therein stand fulfilled.  Thus, the object of the  

Section is to avoid remand and adjudicate the issue if the finding(s) of  

fact  recorded by the court(s) below are found to be perverse.   The  

court is under an obligation to give notice to all the parties concerned  

for adjudication  of the said issue and decide the same after  giving  

them full opportunity of hearing.  

Natural Justice:

26.   The principles of natural justice cannot be applied in a vacuum  

without reference to the relevant facts and circumstances of the case.  

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Thus, they cannot be put in a strait-jacket formula.  “Natural justice is  

not an unruly horse, no lurking landmine, nor a judicial cure-all.  If  

fairness is shown by the decision-maker to the man proceeded against,  

the form, features and the fundamentals of such essential procedural  

propriety being conditioned by the facts and circumstances of each  

situation, no breach of natural justice can be complained of.”    The  

two rules of natural  justice, namely,  nemo judex in causa sua,  and  

audi alteram partem now have a definite meaning and connotation in  

law and their contents and implications are well understood and firmly  

established;  they  are  nonetheless  non-statutory.   The  court  has  to  

determine whether the observance of the principles of natural justice  

was necessary for a just decision in the facts of the particular case.  

(Vide:  The Chairman, Board of Mining Examination and Chief  

Inspector of Mines & Anr. v. Ramjee,  AIR 1977 SC 965; Union of  

India & Anr. v. Tulsiram Patel, AIR 1985 SC 1416; and Managing  

Director, ECIL, Hyderabad v. B. Karunakar,  AIR 1994 SC 1074).  

27.      There may be cases where on admitted and undisputed facts,  

only one conclusion is possible. In such an eventuality, the application  

of the principles of natural justice would be a futile exercise and an  

empty formality. (Vide:  State of U.P. v. Om Prakash Gupta, AIR  

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1970 SC 679; S.L. Kapoor v. Jagmohan & Ors., AIR 1981 SC 136;  

and  U.P.  Junior  Doctors’  Action  Committee  v.  Dr.  B.  Sheetal  

Nandwani & Ors., AIR 1991 SC 909).

28.     However,  there may be cases where the non-observance of  

natural justice is itself prejudice to a person and proof of prejudice is  

not required at all.  In A.R. Antulay v. R.S. Nayak & Anr., (1988) 2  

SCC 602, this Court held as under:

“….No prejudice need be proved for enforcing the   fundamental  rights.  Violation  of  a  fundamental   right itself renders the impugned action void. So   also  the  violation  of  the  principles  of  natural   justice renders the act a nullity.”  

29. Similarly, in S.L. Kapoor (supra), this Court held:

“The  non-observance  of  natural  justice  is  itself   prejudice  to  any  man  and  proof  of  prejudice   independently of proof of denial of natural justice   is unnecessary.  It ill comes from a person who has   denied justice that the person who has been denied   justice is not prejudiced.”

30. In view of the above, in case there is a non-compliance of a  

statutory requirement of law or the principles of natural justice have  

been  violated  under  some  circumstances,  non-compliance  of  the  

aforesaid  may  itself  be  prejudicial  to  a  party  and  in  such  an  

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eventuality, it is not required that a party has to satisfy the court that  

his  cause  has  been  prejudiced  for  non-compliance  of  the  statutory  

requirement or principles of natural justice.   

Present Case:

31. The High Court was much impressed by the chart submitted by  

the respondent-Board after correcting the connection, which reads as  

under:  

Month         Unit            |          Month          Unit                                         | 8/92 3124            |           7/93 2231 9/92 1841            |           8/93 2486 10/92 1812           |   9/93 2063 11/92 1270            |          10/93 7418  12/92 2032            |                   C.T. Connection corrected  1/93 1264            |           11/93            6171 2/93 1368            |           12/93            4656 3/93 1644            |            1/94             3012  4/93 1647            |            2/94  3359 5/93 1911            |            3/94  842 6/93 2152            |            4/94            567 ------------------------------------------------------------------

On perusing the same, the High Court reached the conclusion  

that prior to correct the connection, the meter was recording only 1/3rd  

of the total energy consumed, which seems to be factually incorrect.   

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32.      Shri Gulati, learned counsel for the Board, could not answer  

our query that in case the report/chart prepared by the Board is taken  

to  be  correct,  under  what  circumstances  the  meter  reading  in  the  

months  of  March  and  April  1994  had  been  1/5th of  the  total  

consumption of energy shown in August 1992 and 1/3rd of September-

October 1992 and 1/4th of December 1992.  In fact, the reading for the  

month  of  April  1994 had been 1/13th of  the  reading shown in  the  

month  of  October  1993.   Meter  reading for  the  month of  October  

1993, just prior to correction had been the highest i.e. 7418 units, and  

after correction, readings should have been higher than the said figure.  

33.    The trial court while dealing with the issue after considering  the  

facts and appreciating the evidence on record came to the following  

conclusions :  

“………In  case  connection  to  one  of  the  CT  was  found  to  be  reversed  then  defendants  were  required  to  install  a  check  meter.   With  the  installation of check meter, Board can opine that   the disputed meter is recording 1/3rd and only one  CT  was  contributing  for  recording  of  energy.   According to the Assistant XEN., disk of the meter   was  consuming  42  seconds.  From  the  very   beginning that is from the installation of the meter  account  of  the  disputed  meter  was  overhauled.   Counsel for the Board failed to site any authority   that if there is wrong connection by the Board then  account is to be overhauled from the date of the   

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installation of the meter, secondly, no provision of   the Electricity  Sales Manual cited from which it   could be ascertained that if the disk of the meter   consumes 42 seconds for one revolution then it is   to be presumed that the connection to the CT are  wrong.   If  one  only  CT  was  contributing  for   recording of energy then best way for the board  was to install a check meter.  After comparing the  recording of energy by both the meters, the Board  can  only  opine  that  the  meter  installed  is  not   correct  one  and  is  not  correctly  recording  the   energy.  So simply by saying that the disk of the   meter  consuming 42 seconds  for  one revolution,   connection  to  the  CT is  not  correct.  Connection  were  corrected  on  the  day  of  checking  i.e.  on  5.10.93  but  chart  produced by the  Board shows  that in the month of 3/94 units consumed were only   842 and in the month 9/92 units consumed were  1841.  So, chart shows that after correcting the  connection energy consumed is not regular.  The  only  conclusion  which  should  be  drawn  is  that   account  of  the  meter  was  wrongly  over  hauled  from the date of the installation of the meter.”

(Emphasis added)

34.     The first appellate court concurred with the aforesaid findings  

of the fact.  However, the High Court without framing a substantial  

question  of  law and without  making  any  reference  to  Section  103  

C.P.C.  decided  the  case  against  the  appellant  by  merely  placing  

reliance on the aforesaid chart.  The two courts below had correctly  

understood and appreciated the contents of the said chart and the High  

Court has interfered with the concurrent findings of  fact in a most  

casual and cavalier manner.  Such a course was totally unwarranted  

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and  uncalled  for.  The  High  Court  committed  a  grave  error  in  

considering the findings of fact recorded by the courts below to be  

perverse.  

35.   Shri Gulati has placed much reliance on the conditions of supply  

of  the  electrical  connection  and,  particularly,  on  Clause  23  which  

reads:  

“Where  the  accuracy  of  meter  is  not   involved and it is a case of incorrect connections   or defective CTs PTs, genuine calculation mistakes   etc.,  charges  will  be  adjusted  in  favour  of   Board/consumer,  as  the  case  may  be,  for  the  period  the  mistake/defect  continued.   Additional   charges  will  be  recovered  by  serving  a   supplementary bill  cum show cause notice.   The  consumer may also be allowed to pay the amount   in installments.”(Emphasis added)

36. The aforesaid Clause 23 of the conditions of supply, stipulated  

in the agreement of supply of energy also, clearly provides that Board  

must issue a show cause notice to the consumer before the issuance of  

a revised bill. It is an admitted case that no opportunity of hearing had  

been provided to  the  appellant.  The demand notice  dated 7.1.1993  

reads as under:  

“In  relation  to  abovementioned  subject,  it  is  to   inform  you  that  your  tubewell’s  connection  Account  No.  MS-19  was  checked  by  the  undersigned and the line supervisor.  As per report   

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working of the meter was found to be slow and the   meter was recording 1/3rd of the consumption. This   account of your’s as per report the amount is to be  calculated  by  overhauling  account  from 8/92  to   9/93.   A  supplementary  bill  of  total  amount  of   Rs.73,198.00 is  being sent to you alongwith  this   letter for payment and it is requested to make the  payment  of  the  bill  with  in  the  due  date  of   payment. This be treated as very urgent.”

37. It is evident from the above-said demand notice that no show  

cause notice had been given to the appellant before revising the bill.  

The  Board  has  examined  Mr.  J.L.  Mehta,  Assistant  Executive  

Engineer, as DW.1 before the trial court and the relevant part of his  

cross examination reads as under:  

“……We did not inform the committee prior to our   visit. However, the operator of the committee was  present  at  that  time.   We  did  not  inform  the  Municipal  Engineer  at  the  time  of  checking,   however,  the  operator  could  have  called  the   Municipal Engineer at that time. The detail along  with the bill was served to the plaintiff,  however,   the  bill  alone  does  not  indicate  about  the   calculation……...”

38. It is, thus, evident from the aforesaid deposition of the witness  

produced  by  the  respondent-Board  that  no  prior  intimation  of  

checking had been given to the appellant,  nor was any responsible  

officer   present  at  the  time of  checking.   A copy of  the  checking  

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report/chart was not given to the appellant for filing of objections nor  

was any show cause notice given along with the demand notice. Thus,  

it is a clear cut case of violation of  the principles of natural justice as  

well as of clause 23 of the conditions of supply.  Admittedly, no check  

meter had ever been installed and thus, it could not be held that the  

meter did not record the quantity of energy actually consumed.  In  

view of the above, we do not find any force in the submissions made  

by Shri Gulati that the appellant must show the prejudice caused to it  

by not framing  the substantial question of law by the High Court and  

not giving it the  opportunity of hearing prior to the sending of the  

revised bill.   

39. If  we  consider  the  case  in  the  totality  of  the  circumstances  

involved herein, we are of the considered opinion that the trial court  

as well as the first appellate court had considered all factual and legal  

issues involved in this case. While deciding the case, the courts below  

had appreciated the relevant evidence including the chart prepared and  

so heavily relied upon by the respondent-Board in correct perspective.  

As the Board did not install a check meter, the readings shown by the  

meter  after  correction  of  the  connection  could  not  be  held  to  be  

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correct.   Subsequent  to  the  correction,  the  readings  had  not  been  

regular.  Thus, the revised bill could not be held to be showing the  

correct  quantity  of  energy actually  consumed by the appellant.   In  

such a  fact-situation,  there  was no occasion for  the  High Court  to  

decide the second appeal without framing the substantial question of  

law and it was not a case which could warrant consideration under  

Section  103  C.P.C.  Thus,  the  judgment  and  decree  impugned  are  

liable to be set aside.  

40. In view of the above, the impugned judgment and decree dated  

12.1.2001 passed in Regular Second Appeal No.1618 of 1998 by the  

High Court of Punjab & Haryana at Chandigarh are hereby set aside  

and the judgment and decree of the courts below are restored.  The  

appeal is allowed. In the facts of this case there shall be no order as to  

costs.  

 ……………………………..J. (P. SATHASIVAM)                                           

………………… …………..J.

(Dr. B.S. CHAUHAN) New Delhi,

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October 19, 2010  

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