http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

CASE NO.: Appeal (civil)  4465 of 2007

PETITIONER: U.P. Power Corporation Ltd. & Ors.

RESPONDENT: M/s Bonds & Beyonds (India) (P) Ltd.

DATE OF JUDGMENT: 24/09/2007

BENCH: Dr. ARIJIT PASAYAT & P. SATHASIVAM

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO.  4465 OF 2007 (Arising out of S.L.P. (C) No.17051 of 2001)

Dr. ARIJIT PASAYAT, J.

        1.      Leave granted.

2.      Challenge in this appeal is to the order passed by a  Division Bench  of the Allahabad High Court holding that the  demand raised by the appellant-Corporation through various  bills purporting to realize penalty for violation of peak hour  restrictions cannot be maintained.  The question was whether  one Meter Reading Inspection Report (in short ’MRI’) should be  construed as single violation of the commercial restrictions  irrespective of the fact that a number of contraventions might  have been made by consumers during the period covered by  the said report.          3.      The State Government of Uttar Pradesh issued a  notification under Section 22-B of the Electricity Act, 1910  (hereinafter to be referred to as "the Act of 1910") known as  the U.P. Electricity (Regulation of Supply, Distribution,  Consumption and Use) Order, 1977 which was published in  the Official Gazette. This order was amended on 30-4-1984,  known as the U.P. Electricity (Regulation of Supply,  Distribution, Consumption and Use) (1st Amendment) Order,  1984 by which clause 9 of the 1977 Order was amended and it  was substituted by the following:

"9. (1) Without prejudice to the provisions  contained in Section 42 of the Indian  Electricity Act, 1910, all Chief Zonal  Engineers, Superintending Engineers,  Executive Engineers, Assistant Executive  Engineers and Assistant Engineers of the  Uttar Pradesh State Electricity Board, the  Chief Electrical Inspector, all Deputy  Electrical Inspectors and all Assistant  Electrical Inspectors to the State  Government are authorised to disconnect  the supply summarily without notice in  relation to such installation as are found  upon inspection made by them to have  contravened the provisions of this Order.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

The supply shall remain disconnected for  the period specified below\027 (a) Contravention first in point of time \027  5 days (b) Contravention second in point of time  \027 10 days  (c) Contravention third in point of time \027  20 days (d) Contravention beyond third point of  time \027 Permanently: Provided that for the purposes of this  clause any contravention prior to 1-5- 1984 shall not be taken into account. (2) In addition to above, such consumers  shall be liable to pay the penalty for each  contravention as follows: (a) Consumers having contracted load up  to 100 kVA, at Rs 50 per kVA on their  contracted load. (b) Consumers having contracted load  above 100 kVA and up to 500 kVA at  Rs.30 per kVA on their contracted load  subject to minimum of Rs 5000. (c) Consumers having contracted load  above 500 kVA at the rate of Rs 20 per  kVA on their contracted load subject to  minimum of Rs 15,000. The reconnection shall only be done after  payment of penalty and expiry of the  above specified disconnection period  whichever is later."

4.      The amended Order of 1984 was initially applied from    1-5-1984 to 21-5-1984. The State Government again issued  another order known as the U.P. Electricity (Regulation of  Supply, Distribution, Consumption and Use) (Second  Amendment) Order, 1984 on 21-5-1984 and it was made  applicable with effect from 1-5-1984. By this, clause III of the  First Amendment Order was substituted and the same was  made applicable with effect from 1-5-1984 and was to remain  in force until withdrawn. It is alleged that the said Order was  not withdrawn by the State Government and is still in force.  The Corporation in order to check the malpractice by the  consumers installed electronic meters which are computerised  and can be downloaded for 35 days which will show the details  of consumption including any violation of peak hours  restriction in the last 35 days. Thereafter, the Board issued a  circular on 15-10-1998 to the effect that penalty for peak  hours restrictions will be imposed as per the meter reading  inspection report. However, it was pointed out by the  communication dated 7-4-1999 that for violation of restriction  of peak hours on the basis of meter reading inspection report  for the first time, one penalty for one month may be imposed  on the bill. However, for the second bill and thereafter, the  procedure for penalty will remain the same as mentioned in  the circular dated 15-10-1998. In this factual matrix, the  Division Bench of the Allahabad High Court after reading  these two circulars dated 15-10-1998 and 7-4-1999 took the  view that in view of the order dated 7-4-1999, the consumer  cannot be levied with penalty for each alleged contravention  but once only on the basis of alleged meter reading report,  meaning thereby that each such report will be treated as one  contravention. One meter reading inspection report which  stores data for 35 days, shall be treated as one contravention  irrespective of the fact that in the report a number of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

contraventions might have been made of peak hour restriction  but one meter reading inspection report shall be construed as  one contravention. Aggrieved against this order dated  25.5.2001 passed by the Division Bench of the Allahabad High  Court in Civil Miscellaneous Writ Petition No.4214 of 2001, the  appeal has been filed by grant of special leave.   5.      A perusal of both these notifications makes it very clear  that by communication dated 7-4-1999 the relief was given  only for one time and it was not meant to be operated in  future. For violation of restrictions of peak hours on the basis  of MRI report for the first time, one penalty for one month  could be imposed. For second bill and subsequent bills, the  procedure of penalty will remain the same as mentioned in the  circular dated 15-10-1998. Therefore, according to the circular  dated 15-10-1998, whenever MRI computer print is taken, the  number of violations by a consumer shall be taken to be as  many times as indicated in MRI and it was clearly mentioned  that there will be no relaxation nor the violations will be  considered to be as one violation and will be treated  separately. It was also mentioned that the SDO, Junior  Engineer and Lineman in whose area the violation has been  committed by the consumers should be considered to be  penalised at the Chief Engineer level because of their failure to  stop the violation. The circular also further clarified that  whenever MRI has not been got done in time, the temporary  disconnection, on the basis of situation of the case can be  considered. But at least 5 days’ disconnection penalty will be  imposed for the first disobedience. Therefore, reading of these  two circulars makes it very clear that for violation of  restrictions of peak hours on the basis of MRI report for the  first time, one penalty for one month was to be imposed in the  bill. Therefore, by the circular dated 7-4-1999 one-time  concession was given to the consumers but it was not meant  to be for all times to come. Both these circulars clearly  contemplate that for each contravention penalty will be levied  and not simply because the violations have been recorded in  one MRI report, therefore, the same will be considered to be as  one violation. Hence, the view taken by the Division Bench of  the Allahabad High Court is clearly, unsuitable, and cannot be  sustained.  

6.      A similar issue was considered in U.P. Power Corpn. Ltd.  and Another v. Lohia Brass (P) Ltd.and Ors. (2006 (7) SCC  220) and it was held that High Court’s view is unsustainable.

7.      The appeal is accordingly allowed with no order as to  costs.