IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.4342-4343 OF 2010 (Arising out of S.L.P. (C) Nos.8079-8080 of 2009)

U.P. Power Corporation Limited and others .......Appellants

Versus

M/s Amausi Textile Mills Limited and another .......Respondents  

J U D G M E N T

G.S. Singhvi,  J.

1. Leave granted.

2. These appeals are directed against orders dated 5.12.2008 passed by  

the  Division  Bench  of  Allahabad  High  Court  in  Writ  Petition  No.6744  

(M/B) of 2008 whereby it accepted report dated 17.10.2008 submitted by  

Justice K.S. Rakhra (Retired), quashed orders dated 1.3.2008 and 26.3.2008  

passed by the  Consumer Grievance Redressal Forum, Lucknow Electricity  

Administration, Madhyanchal Vidyut Vitaran Nigam Limited (for short, “the  

Consumer  Forum”)  and  the  Electricity  Ombudsman  respectively  and

directed  appellant  No.1  –  U.P.  Power  Corporation  Limited  to  pay  

Rs.1,69,261/- to the writ petitioner (respondent No.1 herein).

3. Respondent  No.1  is  running  a  spinning mill  and is  a  consumer  of  

electricity  supplied  by  appellant  No.1.   In  1994,  a  notice  was  issued  to  

respondent No.1 to pay the dues of electricity amounting to Rs.19,15,929.20.  

After paying a sum of Rs.3,02,668/-,  respondent No.1 filed Writ  Petition  

No.3503 (M/B)  of  1994 with  the  grievance  that  the  demand was  highly  

inflated and the representation made against the same has not been decided.  

By an order dated 9.9.1994, the Division Bench of the High Court directed  

the  Secretary  of  the  Cooperative  Electric  Society  Limited,  Lucknow  to  

decide  the  representation  of  respondent  No.1.   The  concerned  authority  

passed  order  dated  2.2.1995  and  held  that  as  on  31.12.1994,  a  sum  of  

Rs.22,35,515.19  was  payable  by  respondent  No.1  towards  the  dues  of  

electricity.  However, instead of complying with order dated 2.2.1995 and  

with a view to avoid payment of the outstanding dues, respondent No.1 filed  

successive  writ  petitions  and  instituted  other  proceedings,  the  details  of  

which are as under:

(i) Respondent  No.1 filed Writ  Petition No.2619 (M/B) of  2002  

with the complaint that even though the appeal filed by it against the  

demand  created  by  appellant  No.1  was  pending,  the  concerned  

authorities were taking coercive action for recovery of the so-called  

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dues.  The same was disposed of by the High Court on 15.5.2002 by  

taking cognizance of the statement made by the counsel appearing on  

behalf of appellant No.1 that General Manager, Lucknow Electricity  

Supply  Authority  (for  short,  “LESA”)  will  decide  the  appeal  of  

respondent No.1 within one month.  Simultaneously, the High Court  

directed  that  further  action  in  respect  of  the  property,  which  had  

already been attached shall be taken only after decision of the appeal.   

(ii) General  Manager,  LESA  dismissed  the  appeal  filed  by  

respondent No.1 and held that the demand created by appellant No.1  

was  neither  arbitrary  nor  excessive.   The  appellate  order  was  

challenged  by respondent  No.1 in  Writ  Petition No.2907 (M/B) of  

2002  on  the  ground  that  the  appeal  has  been  decided  without  

complying with the rule of audi alteram partem.   By an order dated  

24.5.2002, the High Court directed the competent authority to decide  

the  appeal  afresh  after  giving  opportunity  of  personal  hearing  to  

respondent No.1 and restrained the appellants  from taking coercive  

action for recovery of the outstanding dues.

(iii) Soon after disposal of the second writ petition, respondent No.1  

filed another writ  petition bearing No.3735 (M/B) of 2002 alleging  

therein that  its  representative had not been heard by the concerned  

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authority. That petition was disposed of by the High Court vide order  

dated 5.7.2002, the relevant portions of which are extracted below:

“Without entering into the factual position as alleged in  the writ petition with all fairness, we fix 10th July, 2002  to enable the petitioner to appear before opposite party  No.4 i.e. Chief General Manager, LESA, Lucknow who  shall after hearing the petitioner shall decide the matter in  accordance with law on that date.  It is clarified that no  further adjournment will be granted in the matter by the  respondents.

Till the final decision is taken, no coercive method will  be used against the petitioner.”

(iv) In compliance of the court’s directive, General Manager, LESA  

heard the representative of respondent No.1 and passed detailed order  

dated 10.7.2002, paragraphs 2 to 6 whereof are reproduced below:

“2. The applicant M/s. Amausi Textile Mills Ltd., in  his  letter  dt.  16.11.80  (Annexure  4)  has  applied  for  supply of electricity billing for his Industry in continuous  process.  Accordingly billing from time to time is being  sent to the applicant for the electricity consumption on  continuous process as per existing tariff regarding which  payment was also made by the applicant.

3. With  regard  to  concession  demanded  by  the  applicant in respect of block closer it is submitted that in  respect of Industry under Power cut two following types  of  to  alternatives  were  available  under  continuous  process:-

(a) If the average demand of the Electricity by  way of operating under power cut from the  month of July, 71 to June, 72 to the tune of  50%.

(b) If the condition of block closer is adhered to.

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The  applicant  instead  of  choosing  the  option  of  block closer (b), had chosen the option of curtailing the  demand under the restricted under option (a) according to  which he was getting concession admissible from time to  time.   Thus,  the  contention  of  the  applicant  that  it  is  entitled to get concession under block closer and same  should  be  given  to  him,  is  not  proper  because  the  applicant  has  not  chosen  said  option.   Therefore,  the  concession admissible under this option is not admissible  to the applicant.

4. The real description or detail has been provided by  the  defendant  to  the  applicant  amounting  to  Rs.53,72,006.87 during the course of hearing regarding  which the receipt was also admitted by the applicant.

5. It  has  become  evident  that  for  realizing  the  dismantling  charges  of  the  established  line  and  equipment,  a  charge  of  Rs.1,36,915.00 towards labour,  loading  and  supervision  charges  has  been  levied  in  accordance  with  the  provisions  for  dismantling  the  electricity  lines.   So  far  as  question  of  removing  the  electricity  line  and  equipments  physically,  the  said  amount will remain unaffected because in the aforesaid  amount the costs of electricity lines and equipments are  not included.

6. By the applicant it has been prayed that the charge  of surcharge mention in notice of electricity dues should  be  waived.   In  this  regard  this  is  mentioned  that  the  defendant  no.2  –  Executive  Engineer,  Electricity  Distribution Division – (CESS) Zone, LESA, Lucknow  and notice for realizing the amount of Rs.53,72,006.87  which includes the amount of surcharge but it is evident  that no surcharge has been levied further on the amount  of  surcharge.   This  factum  is  also  fully  evident  from  perusal  of  chart  submitted  by  the  defendant  no.2  with  respect to delayed surcharge.”   

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(v) As a sequel to dismissal of the appeal preferred by respondent  

No.1,  the  prescribed  authority  i.e.  the  Executive  Engineer  issued  

recovery  certificate  dated  4.10.2002  and  requested  the  Collector  

(District  Magistrate)  to  recover  Rs.53,71,988.87  as  arrears  of  land  

revenue.   

(vi) Respondent No.1 questioned the legality of recovery certificate  

in Writ Petition No.6121 (M/B) of 2002, which was disposed of by  

the High Court on 7.10.2002.  The Division Bench of the High Court  

noted  that  respondent  No.1  had  already  filed  an  application  under  

Section 11 of the Arbitration and Conciliation Act, 1996 (for short,  

“the  1996  Act”)  for  appointment  of  an  arbitrator  and  another  

application  under  Section  9  of  that  Act  and  stayed  the  recovery  

subject to the condition of deposit of half of the amount specified in  

the recovery certificate.   

(vii) Respondent  No.1  did  not  comply  the  direction  given  by  the  

High Court and filed an application before U.P. Electricity Regulatory  

Commission, Lucknow (for short, “the Commission”) for appointment  

of an arbitrator in terms of Clause 18 of the Agreement of Supply.  

The Commission dismissed the application by observing that matter  

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relating  to  appointment  of  an  arbitrator  is  pending  before  District  

Judge, Lucknow.

(viii) When the application filed by respondent No.1 under Section 9  

of the 1996 Act was taken up for hearing,  no one appeared on its  

behalf.   Therefore,  by  an  order  dated  26.3.2004,  District  Judge,  

Lucknow dismissed the  same for  non-prosecution.   The restoration  

application  filed  by  respondent  No.1  was  also  dismissed  for  non-

prosecution.  

(ix) In the interregnum, appellant No.1 floated One Time Settlement  

scheme (OTS), which envisaged waiver of late payment surcharge to  

the extent of 100 per cent subject to the condition of deposit of the  

amount due.  Respondent No.1 opted for OTS but did not pay the  

outstanding  dues  except  one  installment  of  Rs.9  lacs  and  on  that  

account, it could not get the benefit of clause relating to waiver of late  

payment surcharge.

(x) After  deducting  the  amount  of  Rs.9  lacs  deposited  by  

respondent  No.1,  the  prescribed  authority  issued  revised  recovery  

certificate  dated 6.9.2007 and forwarded the  same to  the  Collector  

(District Magistrate).  

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(xi) Respondent No.1 challenged the revised recovery certificate in  

Writ Petition No.78 (M/B) of 2008 and tried to hoodwink the High  

Court  by  withholding  the  material  facts  and  documents  including  

order  dated  10.7.2002 passed  by  General  Manager,  LESA.   When  

counsel appearing for respondent No.1 found that the High Court is  

likely to dismiss the writ petition on the ground that his client had not  

come with clean hands, he made a prayer that the writ petition may be  

dismissed as not pressed.  The High Court accepted his request and  

dismissed the writ petition as not pressed but after recording detailed  

order dated 17.1.2008, the relevant portions of which are reproduced  

below:

“The petitioner who had a spinning mill fell in electricity  dues  amounting  to  Rs.19,15,929.29.   In  1994  when  the  notice was issued for electricity dues he preferred a writ  petition No.3503 (M/B) of 1994 before this Court and the  writ  petition  was  disposed  of  on  9.9.1994  directing  the  respondents to decide the representation of the petitioner  expeditiously and preferably within a period of six months,  a copy of which has been annexed as Annexure-1 to the  short counter affidavit.  In pursuance of the judgment and  order dated 9.9.1994 the competent authority decided the  controversy  and  communicated  that  Rs.15,19,515.19  in  due  against  the  petitioner,  vide  letter  dated  02.02.1985.  Since the petitioner failed to pay the amount to satisfy the  dues,  the  recovery  proceedings  were  initiated.   Feeling  aggrieved by the recovery proceedings, the petitioner filed  a second Writ Petition No.2619 (MB) of 2002.  The said  writ petition was decided by the judgment and order dated  15.5.2002 directing the respondents to take further action  on  the  property  attached  only  after  the  decision  in  the  appeal  by  the  competent  authority,  a  copy  of  the  order  dated 15.5.2002 has been annexed as Annexure 2 to the  

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short counter affidavit.  When the controversy was decided  again by the competent authority in appeal, the petitioner  filed the third writ petition No.2907 (MB) of 2002 on the  ground that no opportunity of hearing was afforded to the  petitioner  in  appeal.   Hence this  court  interfering in the  writ  petition  passed  the  judgment  and  order  dated  24.05.2002 directing the respondent to provide opportunity  of  hearing  to  the  petitioner,  a  copy  of  which  has  been  annexed as Annexure 3 to the writ petition.  In pursuance  of the judgment and order dated 24.5.2002 passed by this  court  the  controversy  was  adjudicated  afresh  by  the  competent  authority  vide  order  dated  05.07.2002 calling  the  petitioner  before  the  General  Manager,  LESA  and  providing  opportunity  of  hearing  to  the  petitioner.   The  General  Manager,  LESA  decided  the  controversy  in  pursuance  of  the  judgment  and  order  dated  24.05.2002  (supra) of this Court afresh after giving full opportunity of  hearing to the petitioner by order dated 10.07.2002 a copy  of which has been annexed as Annexure No.5 to the writ  petition.  The order dated 10.07.2002 was never challenged  by the petitioner and the same attained finality.  However,  the  petitioner’s  counsel  submits  that  the  consequential  citation of recovery of dues in pursuance of the order dated  10.07.2002  was  challenged  in  this  Court  and  the  writ  petition was dismissed.

Instead  of  making  payment  of  dues  in  pursuance  of  the  order  dated  10.07.2002  even  after  dismissal  of  the  writ  petition, the petitioner filed another Writ Petition No.6121  (MB)  of  2002  against  the  recovery  which  comes  to  Rs.53,72,006.87.  The writ petition was disposed of vide  order dated 07.10.2002 directing the petitioner to pay half  of the amount to respondent No.2 within three weeks and  rest of the amount in installments, a copy of the judgment  and order dated 07.10.2002 has been annexed as Annexure  No.6 to the writ petition.  Thereafter again the controversy  relating to One Time Settlement was adjudicated by the  competent authority vide order dated 31.10.2003.  While  approaching this Court, the petitioner did not disclose any  of these facts.

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At this stage, learned counsel for the petitioner submitted  that  the petition may be dismissed as not pressed.   It  is  accordingly dismissed being not pressed.”

(emphasis supplied)

(xii)   Having successfully avoided the consequence of filing a writ  

petition by suppressing the material facts and withholding the relevant  

documents, respondent No.1 filed a complaint before the Consumer  

Forum, which was registered as Consumer Case No.2 of 2008 and  

prayed for setting aside the demand of Rs.53,71,988.87 by asserting  

that it had already deposited the outstanding dues vide receipt dated  

5.12.1997 and that  appellant  No.1  was  not  entitled  to  recover  late  

payment  surcharge.   The Consumer  Forum referred  to  order  dated  

17.1.2008 passed in Writ Petition No.78 (M/B) of 2008 and held that  

appellant No.1 is entitled to recover the outstanding dues.  The last  

four  paragraphs  of  order  dated  1.3.2008  passed  by  the  Consumer  

Forum read thus:

“Heard the parties at length.  The complainant has argued  that  his  grievances  has  never  been adjudicated  on merit  and he was not given opportunity at any stage.

The perusal of the Hon. High Court judgment and order  dated 17.01.2008 passed in writ petition No.78 (M/B) 2008  specifically  states  that  in  pursuance  of  order  dated  24.05.2002 passed in writ  petition No.2907 (M/B) 2002,  the  controversy  was  adjudicated  afresh  by  competent  authority  calling  upon the  complainant  vide  order  dated  05.07.2002 and after giving full opportunity of hearing the  final  order  was  passed  by  competent  authority  on  

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10.07.2002 which was never challenged and got  finality  and the writ petition challenging the recovery proceeding  in  pursuance  of  the  order  dated  10.07.2002  was  also  rejected by the Hon. High Court.  The Hon. High Court  order  also  reveals  that  against  the  recovery  demand  Rs.5372006.87 the writ petition was finally disposed of on  07.10.2002 with direction to complainant to pay half of the  amount  to  respondent  No.2  within  3  weeks  and  rest  in  installment thereafter again the controversy relating to one  time  settlement  was  adjudicated  by  the  competent  authority but the complainant failed in the all the time and  these  facts  were  also  not  disclosed  before  Hon.   High  Court in Writ Petition No.78 (M/B) 2008 and also have not  been disclosed before this Forum.

Since the complainant has adjudicated the present matter  before  the  Hon.  High  Court  as  well  as  before  the  competent authority and the same has been adjudicated at  that level by giving full opportunity to the complainant but  instead of making compliance of the orders passed by the  Hon.  High  Court  the  complainant  preferred  the  present  compliant  to  avoid  from  payment  of  the  recovery  of  electricity  dues  which  is  not  maintainable  in  view  of  principle  of  res-judicata  and  as  such  is  liable  to  be  dismissed.

ORDER

In view of the discussion made above the Forum is of the  view that  the  present  complaint  has  already  adjudicated  upon  after  giving  full  opportunity  by  the  competent  authority and the same is dismissed as not maintainable.  As  such  the  U.P.P.C.L.  has  full  right  to  recover  outstanding dues.”

(xiii) The appeal preferred by respondent No.1 was dismissed by the  

Electricity Ombudsman vide his order dated 26.3.2008.

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(xiv) After  losing  battle  in  the  High Court  and other  adjudicatory  

forums, respondent No.1 deposited Rs.15 lacs in two installments of  

Rs.10 lacs and Rs.5 lacs and then approached the Minister of Energy,  

Government of Uttar Pradesh, who directed the Managing Director of  

Mandhyanchal  Power  Corporation  to  attend  the  grievance  of  

respondent No.1.  However, the concerned office did not yield to the  

pressure tactics adopted by respondent No.1 through political channel  

and  issued  revised  certificate  dated  28.6.2008  for  recovery  of  

Rs.28,62,029/-  as  arrears  of  land  revenue.   As  a  follow  up,  Naib  

Tehsildar, Bijnor issued proclamation dated 8.7.2008 for sale of the  

property of the respondents.

(xv) The issuance of the revised certificate enthused the respondents  

to again try their luck and they filed Writ Petition No.6744 (M/B) of  

2008  with  the  prayer  that  the  recovery  proceedings  initiated  by  

appellant  No.1  and  its  functionaries,  orders  dated  1.3.2008  and  

26.3.2008  passed  by  the  Consumer  Forum  and  the  Electricity  

Ombudsman respectively and the sale proclamation may be quashed.  

They further prayed for issue of a direction to the prescribed authority  

to  issue  revised  bill  as  per  OTS  scheme  dated  31.10.2003  after  

adjusting  the  amount  already  deposited  and  by  waiving  the  late  

payment surcharge.   

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(xvi) At the hearing of the writ petition, which was sixth in series,  

learned  counsel  representing  respondent  Nos.1  to  3  (including  the  

appellants  herein)  apprised  the  Division  Bench  of  the  High  Court  

about  the  successful/unsuccessful  litigious  and  non-litigious  

adventures undertaken by the writ petitioners and submitted that their  

challenge to the revised recovery certificate should not be entertained.  

The Division Bench of the High Court did not deal with the objection  

to the maintainability of the writ petition, which was implicit in the  

submissions of the learned counsel and passed order dated 1.8.2008  

by which  a  retired  Judge  of  the  High Court,  namely,  Justice  K.S.  

Rakhra was appointed to settle the dispute between the parties, albeit  

by recording that this was being done with the consent of the counsel  

for  the  parties.   The  relevant  portions  of  that  order  are  extracted  

below:

“Sri Manoj Kumar Dwivedi, the learned counsel for the  respondent  nos.1  to  3,  on  the  basis  of  instructions,  submits  that  at  present  Rs.28,62,029/-  is  outstanding  against  the  petitioners.   He  further  submits  that  the  petitioners  have  filed  several  writ  petitions  before  this  Hon’ble  Court  and  he  also  approached  the  Electricity  Ombudsman and Consumer Grievance Redressal Forum,  Lucknow i.e. respondent nos.6 and 7.  He further submits  that  the  cheques  issued  by  the  petitioners  during  the  period April 1997 to January 1998 were dishonoured.

We have considered the submissions made by the learned  counsel for the parties.

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It is admitted case of the parties that the electricity of the  petitioners was disconnected permanently on 12.01.1998.  According  to  the  petitioners,  they  have  deposited  Rs.54,73,208/- with the respondent no.1 to 3 on different  dates between 1997 to 2008.  On the basis of instructions  issued by the  respondent  Nos.1 to  3,  Sri  Dwivedi,  the  learned  counsel  for  the  respondent  nos.1  to  3  has  informed  this  Court  that  at  present  the  outstanding  against the petitioners is about Rs.28,62,029/- although in  the  proclamation  of  sale  dated  08.07.2008  the  outstanding  is  mentioned  as  Rs.43,63,029/-.   The  petitioners have alleged that they are entitled for refund  of Rs.11,11,179/-.  The petitioners have filed several writ  petitions  in  this  Court  in  the  past  which  were  finally  disposed  of  after  hearing  the  learned  counsel  for  the  parties.

Since the disputed question of facts are involved in this  case,  we,  with  the  consent  of  learned  counsel  for  the  parties, appoint Mr. Justice K.S. Rakhra (Retired) Judge  of  this  Court  to  settle  the  dispute  between the parties.  The petitioners and the respondent nos.1 to 3 shall  file  their  claims  at  the  residence  of  Justice  K.S.  Rakhra  (Retired) on 12.08.2008, who after affording opportunity  to both the parties will decide the dispute and submit the  report preferably within two months before this Court.”

(emphasis supplied)

(xvii) The  parties  filed  their  respective  claims  before  Justice  K.S.  

Rakhra (Retd.).  In the statement filed on behalf of the appellants, it  

was pleaded that the respondents are not entitled to any relief because  

order dated 10.7.2002 passed by General Manager, LESA had become  

final  and  Writ  Petition  No.78 (M/B)  of  2008 filed  against  revised  

recovery certificate dated 6.9.2007 was dismissed as not pressed.  It  

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was also pleaded that the respondents cannot take benefit of the OTS  

because they failed to comply with the conditions enshrined therein.   

(xviii) Justice K.S. Rakhra (Retd.)  did not pay due attention to the  

statement filed on behalf of the appellants and submitted report dated  

17.10.2008 with the following conclusions:

“On  the  basis  of  the  discussions  made  above,  it  is  concluded that the UPPCL had not correctly calculated  the  late  payment  surcharge  which  in  fact  could  be  calculated as Rs.28,37,609/-.  They committed an error in  fixing the said amount of late payment surcharge at 35%  of the total bill amount and giving waiver of only sum of  Rs.18,73,474/-.  IN the split up figures of LPS in the Bill  amount of Rs.53,72,006/-  they have also made a futile  attempt to show as if the waiver was 100% of the late  payment surcharge amount because,  this total  LPS too,  has been shown to be Rs.18,73,474/-.

It  is  further  concluded  that  the  bill  raised  by  UPPCL  after  first  OTS,  was  clearly  incorrect  bill  for  Rs.34,98,532.26  P.   Instead,  it  should  have  been  for  Rs.23,41,739/-.  The petitioners paid first instalment of  Rs.9,00,000.00 under protest.  Their application for OTS  was entertained even second time.  They were, therefore,  not at fault in withholding further payment till the correct  bill was raised.

The  dismantling  charges  of  Rs.1,36,915/-  have  been  wrongly  claimed instead  of  Rs.400/-  which  were  standard charges.”

(xix) In his report, the learned retired Judge relied upon the statement  

made by Shri Akhilesh Srivastava, Executive Engineer of appellant  

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No.1 that  respondent  No.1 was allowed to pay the amount  in nine  

installments out of which six had already been paid and concluded  

that  only  Rs.5,07,677.03  was  payable  against  the  demand  of  

Rs.14,14,037.03 which remained to be paid after  adjustment of the  

amount paid towards the bills of May to October, 1997.  The learned  

retired Judge held that respondent No.1 was entitled to 100% waiver  

of late payment surcharge.  He further held that appellant No.1 is not  

entitled to levy dismantling charges and interest and concluded that as  

against the outstanding dues of Rs.23,41,739/-, respondent No.1 had  

already paid Rs.25,11,000/-.   

(xx) The  appellants  filed  detailed  objections  against  the  report  of  

Justice K.S. Rakhra (Retd.).  They pointed out that the cheques given  

by respondent No.1 towards five out of nine installments had been  

dishonoured  and  despite  being  asked,  it  did  not  produce  the  bank  

statement.   The  appellants  also  alleged  that  the  respondents  had  

manipulated bill dated 1.12.1997. As regards the OTS, the appellants  

pointed out that benefit thereof could be availed only if the amount  

was paid by 31.10.2003, which the respondents failed to do.  It was  

also pointed out that cheque of Rs.9 lacs given by respondent No.1 on  

30.11.2003 was dishonoured by the bank on 9.12.2003 and later on,  

payment  was  made  through  fresh  cheque.   According  to  the  

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appellants,  the  respondents  did  not  pay  the  remaining  installments  

and, therefore, they were not entitled to waiver of the late payment  

surcharge in terms of the OTS.  On the issue of levy of dismantling  

charges, the appellants pointed out that the demand was made strictly  

as per the order of the Board and Rs.400 were payable only by those  

consumers who were getting supply from the sub station.   

(xxi) The High Court summarily brushed aside the objections filed  

by the appellants and allowed the writ petition by relying upon the  

report of Justice K.S. Rakhra (Retd.) as if the determination made by  

him was final.   

4. Shri T.N. Singh, learned counsel for the appellants submitted that the  

impugned orders are liable to be set aside because the Division Bench of the  

High Court failed to appreciate that the respondents had not challenged the  

determination made by General Manager, LESA vide order dated 10.7.2002  

and the fact  that Writ  Petition No.78 (M/B) of 2008 filed by respondent  

No.1  was  dismissed  as  not  pressed.   Learned  counsel  argued  that  the  

Division Bench of the High Court was not at all justified in undertaking an  

exercise for re-determination of the liability of the respondents to pay the  

dues of electricity ignoring that their challenge to the recovery certificates  

issued earlier had failed and they did not pay a single farthing in compliance  

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of order dated 7.10.2002 passed in Writ Petition No.6121 (M/B) of 2002 and  

also failed to honour the commitment made to pay the dues in terms of the  

OTS.  Learned counsel also assailed the report of Shri Justice K.S. Rakhra  

(Retd.) and argued that the learned Judge totally exceeded his brief when he  

held that the respondents are entitled to refund of Rs.1,69,261/-.   

5. Learned counsel for the respondents did not dispute that order dated  

10.7.2002 passed by General  Manager,  LESA was not  challenged by his  

clients  and  that  Writ  Petition  No.78  (M/B)  of  2008  filed  by  them  was  

dismissed  as  not  pressed  but  argued  that  after  having  agreed  to  the  

appointment of a retired Judge to settle the dispute between the parties, the  

appellants are estopped from questioning the findings contained in the report  

of Justice K.S. Rakhra (Retd.).  In the written submissions filed on behalf of  

the respondents, it has been claimed that the petitioners are not entitled to  

challenge the report of Justice K.S. Rakhra (Retd.) because he was appointed  

with the consent of the counsel for the parties.  It has been further claimed  

that demand of late payment surcharge was totally unjustified and in any  

case, the appellants are not entitled to realize the amount specified in order  

dated 10.7.2002 passed by General Manager, LESA because details of the  

outstanding dues were never furnished to the respondents.  The respondents  

have also justified the findings recorded in the report of Justice K.S. Rakhra  

(Retd.) by contending that the appellants cannot claim dismantling charges  

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and  interest  on  late  payment  surcharge  because  the  respondents  were  

allowed to pay the due amount in installments and all the dues had been  

cleared.   

6. We  have  thoughtfully  considered  the  submissions  of  the  learned  

counsel.  In our view, the writ petition filed by the respondents for setting  

aside orders dated 1.3.2008 and 26.3.2008 passed by the Consumer Forum  

and the Electricity Ombudsman as also the sale proclamation was nothing  

but was an abuse of the process of the court and the High Court committed  

serious error by entertaining and allowing the same.  It is not in dispute that  

in  none of  the  writ  petitions  filed by them, respondent  No.1/respondents  

challenged order dated 10.7.2002 passed by General Manager, LESA, who  

held  that  respondent  No.1  was  liable  to  pay  the  dues  amounting  to  

Rs.53,72,006.87.   Therefore,  the  consequential  action  taken  by  the  

prescribed authority to issue recovery certificate/revised recovery certificate  

was not open to be challenged by the respondents and in any case, order  

dated 10.7.2002 could not have been indirectly nullified by the High Court  

by allowing the writ petition filed for quashing orders dated 1.3.2008 and  

26.3.2008 passed by the Consumer Forum and the Electricity Ombudsman.  

Unfortunately,  the  Division  Bench  of  the  High  Court  not  only  failed  to  

notice this designed omission on the respondents’ part to challenge order  

dated 10.7.2002 passed by General  Manager,  LESA but also ignored the  

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starking  facts  that  respondent  No.1  failed  to  comply  with  order  dated  

7.10.2002 passed in Writ  Petition No.6121 (M/B) of  2002 and that  Writ  

Petition No.78 (M/B) of 2008 filed by it for quashing the revised recovery  

certificate  dated  6.9.2007 was dismissed  as  not  pressed.   It  is  extremely  

difficult,  if  not  impossible  to  fathom  any  reasons  why  the  High  Court  

appointed Justice K.S. Rakhra (Retd.) for settlement of dispute between the  

parties,  the  determination  of  which,  in  its  own  opinion  involved  

investigation into disputed questions of fact.  It seems to us that the Division  

Bench  was  very  much  conscious  of  the  limitations  of  High  Court’s  

jurisdiction under Article 226 of the Constitution and, therefore, it evolved a  

novel  method for  granting relief  to  the  respondents.   We disapprove the  

mechanism adopted by the High Court for disposing of the writ petition filed  

by the  respondents  by  relying  upon the report  of  the  retired  Judge,  who  

recorded findings in derogation of order dated 10.7.2002 passed by General  

Manager, LESA and completely overlooked the factum of dismissal of Writ  

Petition No.78 (M/B) of 2008 filed by respondent No.1 against the revised  

recovery certificate dated 6.9.2007.   

7. Although, the sixth writ petition filed by the respondents cannot be  

treated as barred by res judicata because in the previous writ petitions, they  

did not have the occasion to challenge orders dated 1.3.2008 and 26.3.2008  

passed by the Consumer Forum and the Electricity Ombudsman and the sale  

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proclamation, while passing the impugned orders, the High Court was duty  

bound to take note of conduct of respondent No.1 which had instituted five  

writ  petitions  and other  proceedings  with  the  sole  object  of  avoiding  its  

liability to pay the dues of electricity.  The High Court should also have  

taken note of the fact that respondent No.1 did not abide by the terms of the  

OTS and declined to entertain the prayer made by the respondents.  

8. Dehors what has been observed in the preceding paragraphs, we are  

convinced that the impugned orders are liable to be set aside because the  

High Court has not assigned any reason for quashing orders dated 1.3.2008  

and 26.3.2008 and the sale proclamation.  The Division Bench of the High  

Court  did  not  find  any  legal  infirmity  in  the  decisions  taken  by  the  

Consumer  Forum  and  the  Electricity  Ombudsman  not  to  entertain  the  

respondents’ prayer for nullifying the demand raised by appellant No.1 and  

yet it quashed the two orders by simply reproducing and relying upon the  

report of Justice K.S. Rakhra (Retd.), which was prepared by distorting the  

facts and with the sole purpose of espousing the cause of the respondents.     

9. In   the   result,   the   appeals   are   allowed.    The   impugned  

orders are   set    aside   and the writ   petition   filed   by   the   respondents  

before   the  High  Court  is  dismissed.    Within one  month  from  today,  

the   appellants    shall    supply    to   the    respondents    a    statement  

containing  the  details of  the  outstanding   dues.   The statement shall   also  

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incorporate the amounts already paid by and on behalf of respondent No.1.  

Within six months of the receipt of the statement, the respondents shall pay  

the  outstanding  dues  in  six  equated  monthly  installments.   The  first  

installment  shall  be  paid  by  the  end  of  June,  2010  and  the  remaining  

installments shall be paid on or before 31st July, 31st August, 30th September,  

31st October and 30th November of 2010.  If the respondents omit to pay  

either of the installments, the appellants shall become entitled to recover the  

entire balance amount along with interest at the rate of 12% per annum.  

....….………………….…J.       [G.S. Singhvi]

     ……..…..………………..J.       [Asok Kumar Ganguly]

New Delhi May 07, 2010.

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