aIN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 3505 of 2007

Punjab State Electricity Board & Anr.  …Appellants

Versus

Ashwani Kumar …Respondent

WITH

Civil Appeal No. 3506 of 2007

Punjab State Electricity Board & Anr. …Appellants

Versus

Sudesh Mahajan           …Respondent

JUDGMENT

Swatanter Kumar, J.

1. This appeal is directed against the Order dated 21st February,  

2006  passed  by  the  National  Consumer  Dispute  Redressal  

Commission (hereinafter  referred to as the ‘National Commission’),  

New Delhi  where it  dismissed the review petition preferred by the  

Punjab  and  Haryana  State  Electricity  Board  (for  short  ‘Electricity  

Board’)  against  the Order dated 16th August,  2005.  One Ashwani  

Kumar,  respondent  herein had filed a complaint  before the District  

Forum alleging that  the electric  meter bearing No. MS-32/603 was  

installed in the premises owned and possessed by him in the name  

of Kartari Devi and Suraj Prakash who had sold the property through  

Registered Sale deed dated 28th November, 1996 (Ext.C/1) and since  

the purchase of the property, he has been using the electric meter  

and connection.  On 2nd July, 2002, he had received a Memo from  

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the  Electricity  Board  stating  that  the  said  connection  had  a  

sanctioned load of 52.49 KW and it was required to be clubbed with  

electric  connection  in  the  name  of  Janak  Raj  bearing  electric  

connection No. MS-32/580 with sanction load of 56.79 KW.  Reply  

was submitted by him to the Memo wherein he had stated the above  

facts.   It  was further  clarified  that  his  property  was separate  and  

distinct from property possessed by Sudesh Mahajan and the electric  

connection in that premises was in the name of Janak Raj.  They  

denied the cross wiring in the property or even that the connection  

was being commonly used by the parties.  Thus, they contested the  

demand raised by the Electricity Board to the extent of Rs.3,28,216/-.

2. Similarly,  in  the  other  case  Sudesh  Mahajan  had  filed  a  

complaint claiming a sale in favour of his predecessor in interest on  

28th November, 1996.  They denied the charges of clubbing and took  

up the stand that they were independent properties wherein different  

meters  have  been  installed  and  as  such,  the  demand  of  

Rs.4,56,025/-  and  Rs.3,28,261/-  was  not  payable  by  any  of  the  

consumers namely Janak Raj and Kartari Devi or persons claiming  

through them.  To challenge the same, complaints were filed by both  

which came to be dismissed vide orders dated 2nd June, 2002 and 8th  

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September,  2003  respectively,  passed  by the  District  Forum.  The  

appeals were filed by the private complainants against the Electricity  

Board  before  the  State  Consumer  District  Redressal  Commission,  

Punjab which came to be registered as Appeal No. 218 and 219 of  

2004 respectively.  Both these appeals came to be allowed by the  

State  Forum  and  the  demands  raised  were  quashed.   A  further  

direction was issued that the amount deposited by the respondents, if  

any, under the impugned demand notice, the same shall be refunded  

with interest @ 9% per annum.  The State Forum while referring to  

the documents of sale in favour of the respondents further held that a  

circular being CC No. 4 of 1997 issued by the Electricity Board on 8th  

January, 1997 dealt  with the subject  of  running of  more than one  

connection in the same premises.  According to the circular, if there  

were two connections in the same premises they were required to be  

clubbed  for  the  purposes  of  payment  of  tariff.   However,  the  

Competent  Forum  in  appeal  found  that  they  were  two  distinct  

persons,  owning  distinct  properties  and  were  having  independent  

electric  connections.   Reliance  was  placed  on  the  fact  that  the  

properties have been numbered as 136 and 136-A separately by the  

Municipal Corporation.  The properties were subjected to property tax  

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separately.  The result of these two distinct properties was that they  

could not be termed as same premises under the relevant provisions  

and  therefore,  the  demand  raised  was  entirely  unjustified.   The  

Electricity Board filed appeals before the National Consumer Dispute  

Redressal Commission, which were dismissed, vide Order dated 21st  

February, 2006.  As already stated, it is a small order and it will be  

useful to refer to the same at this stage:

“Heard the Ld. Counsel for the Petitioner.  As  per  the  Municipal  record,  two  separate  buildings are there. One building admeasuring  554 sq. yards in P-136 owned jointly by Shri  Suraj  Prakash,  Shri  Ashwani  Kumar,  Shri  Subhash Chander S/o Shri Tilak Raj and Smt.  Raj  Rani.   Other  building  admeasuring  504  Sq.  Yards  is  P-136-A  owned  by  the  same  person.   On  record  there  is  evidence  that  Ashwani Kumar is running the business in the  name  of  Ashwani  Textiles  and  he  is  the  proprietor.   As  against  them  there  is  other  textile  mill  known  as  Mahajan  Handloom  Industries owned by Shri Sudesh Mahajan.  In  this  state  of  circumstances order passed by  the State Commission cannot be said to be, in  any way, erroneous.  Hence, these Revision  Petitions are dismissed.”  

3. The  legality  and  correctness  of  the  order  passed  by  the  

National  Commission  is  challeged  in  these  appeals.  At  the  very  

outset, we may notice that the electric supply regulations have been  

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framed in exercise of  the powers conferred  under Section 49 and  

Sub Section (j) of Section 79 of the Electricity Supply Act, 1948 (for  

short  referred  as  ‘the  Act’)  and  other  enabling  provisions  by  the  

Board.  These regulations deal with different aspects, in particular,  

they  deal  with  providing  of  one  connection  in  one  premises  and  

consumer is required to give an undertaking on a non-judicial stamp  

paper that no connection already exists in the premises, in which, the  

connection  is  being  applied  in  terms  of  Clause  3.1.1  of  the  

Regulations.  Other relevant provisions which have a bearing on the  

matters  in  controversy before  us,  relate  to  new connection  in  the  

same  premises,  transfer  of  the  premises,  where  there  exists  a  

connection and the obligation on the part of the consumer to get the  

connection clubbed.  Now we may examine those relevant provisions  

which read as under:

“3.5.2   Whenever,  an  existing  consumer  applies  for  a  new  connection  in  the  same  premises  i.e.  even  having  independent  shed/unit/piece  of  land  having separate  plot  no. etc., in his name, it shall normally be not  allowed.  Such consumer should be asked to  apply for extension in existing load.  However,  if  a new connection has been applied in the  name  of  a  new  firm/company  of  which  the  existing  consumer  is  a  Director/Partner,  the  connection will only be allowed if the premises  

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are  distinctly  and  physically  separate/portioned so that it is not possible to  utilize  electricity  from  one  premises  to  the  other  and further  that  in case of  one of  the  connections having been disconnected due to  default, it cannot be run from other connection  by making temporary arrangement.

3.5.2.1  Where  the  premises  in  question  are  legally  transferred,  sold  or  leased  to  a  new  unit  and  appropriate  entry  exists  in  the  municipal/  revenue  record  regarding  such  transfer,  the  consumer/applicant  should  furnish a copy of the registered deed for sale  or  lease  as  the  case  may be.   An  informal  agreement  of  family  partition/  lease  etc.  will  not be acceptable.

3.5.2.2  Where  the  Punjab  Government  has  allowed  the  registration  of  more  than  one  unit/renting out of the premises for setting up  industrial units in industrial plots/sheds in the  Focal Points depending on the size of the plot  and subject  to  fulfilment  of  some conditions  laid down for the purpose, in such cases the  new  connection  may  be  allowed  provided  such  units  are  in  the  name  of  different  persons and parts of such sheds/plots being  used  by  different  industrialists,  are  properly  demarcated  and  separated  from each  other  by making suitable partition so that  it  is  not  possible  to  use  electricity  from  one  unit  to  another and in case of one connection having  been disconnected due to defaulting amount  etc.,  the  same  cannot  be  run  from  other  connection(s) in the adjoining industrial unit(s)  by tapping some supply points.

xxx xxx xxx

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3.5.7 Failure to get Connections Clubbed If  a consumer fails  to exercise option to get  his connections clubbed within the stipulated  date  or  declares  that  there  is  only  one  connection  in his  premises  but  later  on it  is  detected  that  he  is  having  more  than  one  connection in one premises, he shall have to  pay higher tariff  and surcharge,  if  applicable  w.e.f. 1.1.96.

4. The circular, which has been relied upon by the parties reads  

as follows:

“In order to encourage the consumers to opt  for clubbing of their loads and also to facilitate  a smooth transition, it has been decided that  all  consumers  may  be  asked  to  give  undertaking for clubbing/conversion of two or  more  connections  in  the  same  premises,  wherever existing by 31.1.97.  Further action  in various situations may be taken as under:

(a) Cases  where  no  change  of  voltage  level  is  involved;  The  cost  of  clubbing  with  regard  to  service  Mains,  if  any,  shall  be borne by the  Board.  However, consumer shall  be charged higher  tariff  wherever  applicable,  from  the  date  of  undertaking, which in any case shall have to  be given before 31.1.97.

(a) Cases  where  change  of  voltage  level  is  involved;  In  cases  requiring  conversion  of  supply  voltage from LT to 11 KV, Board shall  carry  out the conversion including erection of a new  11/0.4 KV transformer with allied equipment in  

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the first instance and recover the conversion  cost in six equal monthly instalments from the  consumer.

Note:-  Where  there  is  a  transformer  exclusively  feeding  the  consumer,  this  may,  on the option of the consumer, be sold to him  as per the provisions contained in SMI-39.

In  both  the  cases  (a)  and  (b)  above,  such  consumers  shall  be brought  on higher  tariff,  wherever applicable and any surcharge due to  voltage level shall be stopped with effect from  the date of undertaking.

The  above  relaxation  shall  be  applicable  to  the cases involving voltage level upto 11 KV.

(a) The consumers who do not exercise option by  31.1.97  or  those  who  in  the  first  instance  declare  that  there  is  only  one  connection  existing  in  their  premises  but  later  on  are  detected  to  be  running  more  than  one  connection in the same premises, shall have  to  pay higher  tariff  and  surcharge  wherever  applicable w.e.f. 1.1.96.”

5. The bare reading of the above regulations and circular makes it  

apparent  that  the  aim of  the  Electricity Board  is  to  provide single  

connection in the premises.  Not only this, it is the obligation of the  

consumer,  to  get  the  connections  clubbed  where  more  than  one  

connection  exists  in the same premises.   This policy is,  primarily,  

meant to encourage single connection as well as consumers to opt  

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for  clubbing  of  their  loads  and  also  to  facilitate  a  smooth  

transmission.  Besides this, the most important aspect is the mischief  

that these provisions ought to suppress.  A consumer who gets two  

meters installed in his premises and in that garb receives bulk supply  

instead of medium supply clearly makes an attempt to avoid payment  

of higher tariff.  It cannot be disputed that a consumer of a medium  

supply  is  subjected  to  a  lower  tariff  than  the  one  receiving  bulk  

supply.  Therefore, the intention, thus, is to avoid revenue loss to the  

Board  by circulating  the  prescribed procedure.   These regulations  

and circulars,  thus, cannot be interpreted so as to defeat the very  

object  of  suppressing  such  a  mischief  in  the  consumption  of  

electricity.  Therefore, if the Electricity Board finds that such mischief  

is being played, there is nothing in law preventing the Board from  

treating it as a clubbed connection and impose such tariff and penalty  

as  is  permissible  in  accordance  with  law.   No  consumer  can  be  

permitted  to  defeat  the  spirit  of  the  regulations  and  take  undue  

advantage of receiving electric supply through all different meters in  

the same premises and with an intention to defraud the Electricity  

Board of its genuine dues for supply of electricity.   

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6. Having referred to these regulations, now we may revert back  

to the facts of the present case.  The officers of the Electricity Board  

had conducted inspection of the premises in question and prepared  

an inspection report.  As per the inspection report, there is only one  

plot being Plot No. 136, Industrial Area-A, Ludhiana and in that Smt.  

Kartari Devi is stated to be the consumer.  She has a sanctioned load  

of 52.49 KW and the Consumer Account No. was MS-32/603.  The  

other  consumer  is  Shri  Janak  Raj  in  the  same  property  having  

Consumer Account No. MS-32/580 with a sanctioned load of 56.79  

KW.  In the report, it was noticed as follows:-

“6.  In  the  connected  portion  of  premises  (Aahata)  one  more  connection  MS-32/0603  Kartar Devi is installed. The supply of which  also  comes  to  this  premises  and  at  the  moment some load of that connection is found  running on this side.

7.  The common wall of both sides has one  shutter  and  one  Kainchi  Gate.   In  the  half  portion  of  Kainchi  Gate  a  wall  of  approximately four feet exists.  As per Board  instructions  case  of  clubbing  is  made  out  action be taken.”

6. This report was signed by Shakti Jaggi, a representative of the  

consumer,  to  whom  the  copy  of  the  same  was  given.  The  

Department, vide their letter written to the consumer, had stated that  

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in terms of circular No. 78 of 1995, dated 15th September, 1995 and 4  

of 1997, dated 8th January, 1997, the connections were liable to be  

clubbed on the basis of this inspection report and they were expected  

to file reply within fifteen days from the date of issue of the notice.  In  

the reply submitted by the consumers,  no specific  objections were  

filed to the effect that the inspection was conducted in a prejudicial  

manner or correct  facts  had not been noticed and that  is why the  

protest was raised.  In any case, it was open to the consumer to file  

objections to the report at a subsequent stage.  Except that, there  

were two distinct properties and connections, nothing was averred in  

the reply or before the Forum as to why the officers had reported the  

facts  in  their  report  which  justify  clubbing  of  the  connections.  

Thereafter,  the  demands  of  Rs.3,28,216/-  and  Rs.4,56,025/-,  as  

stated above, were raised from these consumers.  Both the reports  

have been received by the consumer’s representatives.  The demand  

notices were admittedly received by the consumer as they are the  

very basis of the complaints filed by them.  The circular being CC No.  

4 of 1997, while referring to the scheme of the Electricity Board under  

Clause (c) of the circular, made it obligatory upon the consumers to  

exercise the option by 31st January, 1997 and even to those persons  

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where one connection is stated to be existing in the premises but  

later on are detected to be running more than one connection and  

they would have to pay higher tariff  and surcharge w.e.f.  1.1.1996.  

The version, put forward by the consumers, is that there were two  

separate premises and they had produced certain documents before  

the  Forum,  which  persuaded  them  to  treat  these  premises  as  

separate.  All these documents were prior to the date of inspection  

and it  has  been noticed  by the  Forum that  the  inspection  reports  

were signed under protest.   The reports,  which have been placed  

before us at page Nos. 56 and 59 respectively of the paper book,  

show that some protest was raised, however, no objections were filed  

to show what was the protest and what exactly the consumer were  

objecting to.  It, certainly, required a definite finding to be recorded by  

the Forum.  Non-recording of such a finding has prejudicially affected  

the rights of the parties.   

7. The  documents  (Ext.C1  to  Ext.C10),  noticed  by  the  State  

Commission, show that the consumer had advanced the argument of  

separate properties, separate ownership and separate connections.  

However, there is no reason recorded as to why the evidence of the  

Department i.e. the inspection report is incorrect and cannot be relied  

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upon.  There is ambiguity.  The District Forum, while relying upon the  

report, had rejected the complaint which was reversed by the State  

Forum.  These are the findings of facts and they must be recorded in  

a manner which would clearly establish on record the case of one  

party or the other in accordance with law.  The trading accounts filed  

by the consumer in one of the appeals related to financial year 1991-

92,  1992-93,  1993-94  and  1996-97.   On  behalf  of  respondents,  

Subhash Chander, had filed the rent receipts for the period 1st April,  

2002 to 30th September, 2002.  Primarily, the documents produced  

by the consumers related to the period prior to the date of inspection.  

The inspection of the premises was conducted on 19th June, 2002.  It  

was required of the consumers to establish their case for the period,  

at the time of or subsequent to the date of inspection.  There could  

reasonably  be  possibility  of  issues  being  answered  against  the  

consumers.   The report  prepared by the  officers  of  the  Electricity  

Board is an act done in discharge of their duties and could not be  

straight  away reflected  or  disbelieved  unless and until  there  was  

definite and cogent material on record to arrive at such a finding.  It is  

not disputed before us that if  two connections are operating in the  

same  premises,  in  that  event,  the  concept  of  clubbing  and  

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consequential charges and penalty would be attracted.  That being  

so, and particularly, where a National Commission has not adverted  

to some discussion on the points raised in the appeal, the policy of  

the Electricity Board and the regulations cannot be rendered otiose.  

It is the obligation of every bona fide consumer to comply with the  

requirements and the regulations in the circular and not to abuse the  

advantage given under the policy of the Electricity Board.  If there is  

a prima facie record to show that  the consumer had attempted to  

circumvent  the  circular  and with  an intention  to  avoid  payment  of  

higher  tariff,  two  connections  were  being  utilized  in  the  garb  of  

different premises, while in fact, it was one and same premises, the  

penal  consequences  must  follow.   The  circular  issued  and  the  

regulations read with the provisions of the Act, clearly contemplate  

imposition of penalty and such charges with effect from 1st January,  

1996.   There  is  no  explanation  on  record  as  to  why the  date  is  

effective from 1st January, 1996.  Even if taking the said date to be  

correct then the dues, which can be recovered, are the dues payable  

to the Electricity Board in accordance with law.  The notice dated 2nd  

July, 2002 (Ext.C/5) was issued on the basis of the inspection report.  

From  the  record  before  us  it  will  be  a  serious  question  to  be  

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specifically answered by the Competent  Forum, as to whether the  

premises in question are two distinct and different premises or it is  

one in the same (i.e. only property No. 136 or 136 and 136-A).  If  

these are two independent premises owned by two different persons  

who are consumers of the Board in their own capacity and there is no  

intention on their part to use these connections collectively and have  

not violated their sanctioned load, the consequences in law will be  

different.  But, if there is intention to use both connections and avoid  

higher tariff, the consequences will be entirely different in that case.  

The  inspection  report  is  a  document  prepared  in  exercise  of  its  

official duties by the officers of the Corporation.  Once an act is done  

in accordance with law, the presumption is in favour of such act or  

document and not against the same.  Thus, there was specific onus  

upon the consumer to rebut by leading proper and cogent evidence  

that the report prepared by the officers was not correct.  As already  

noticed,  no  objections  were  filed  to  the  said  report  except  some  

protest, that too, without stating as to what was the specific protest  

about,  whether  the  facts  recorded  in  the  report  were  factually  

incorrect  or  that  the  report  was  received  under  protest.   As  is  

apparent from the reports on record, it bears two signatures of the  

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consumer/consumer’s  representatives,  one  with  regard  to  the  

preparation of report and other with regard to receiving the copy of  

the  report.   The words ‘under  protest’  have been recorded at  the  

bottom of the report.  This, itself indicates the ambiguity in the protest  

raised by the consumers.   

8. In  the  circumstances  aforestated,  we are  of  the  considered  

view that  the  matter  requires  to  be  remanded  to  the  Competent  

Authority in the Electricity Board to determine and record the clear  

findings afresh  as  to  whether  it  was a case of  clubbing  or  not  in  

accordance with the provisions and observations afore-referred with  

liberty to  the parties  to  produce any further  documents,  if  they so  

desire. The authority shall pass a final order expeditiously.  The fate  

of the notices and consequences thereof shall be subject to the final  

order that may be passed by the Competent Authority.  Parties are at  

liberty to challenge the order so passed in accordance with law.

9. The  appeals  are,  therefore,  disposed  off  with  the  above  

direction while leaving the parties to bear their own costs.

................................J.  [ DR. B.S. CHAUHAN ]

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……..............................J.       [ SWATANTER KUMAR ]

New Delhi July  8,  2010.

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