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CASE NO.: Appeal (civil)  7817 of 2003

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

RESPONDENT: M/s. Lohia Brass (P) Ltd.  & Ors

DATE OF JUDGMENT: 25/07/2006

BENCH: H.K.SEMA & A.K.MATHUR

JUDGMENT: J U D G M E N T  

W I T H :         Civil Appeal Nos. 7828, 7831, 7829, 7830,  7842, 7827, 7840, 7839, 7837, 7838,  7836, 7835, 7834, 7823, 7826, 7825, 7832, 7833, 7821, 7822, 7854, 7918, 7851, 7850,  7849, 7841, 7853, 7852, 7843, 7847, 7848, 7846, 7845, 7824, 7844, 7820, 7818, 7819,  7859, 7857, 7856, 7855, 7860, 7858, 7861, 7862, 7864, 7863, 7865, 7866, 7867, 7868,  7881, 7880, 7878, 7877, 7876, 7879,7869, 7870, 7871, 7875, 7874, 7872, 7883, 7885,  7882, 7884, 7886, 7887, 7873, 7888, 7889, 7890, 7892, 7891, 7893, 7894, 7895, 7898,  10078, 10079, 9935-9936 of 2003, C.A.No. 3156 of 2006 @ S.L.P.(c) No.8296 of 2004  & C.A. No.2793  of 2004

A.K.MATHUR,J.    

               Leave granted in S.L.P. (c) No.8296 of 2004.

               All this batch of appeals involves similar questions of law.  Therefore, they are disposed of by this common order.  At the outset, we  may point out that there  are conflicting decisions rendered by the  Division Bench of the High Court of Allahabad at Allahabad dated  25.5.2001 passed in Civil Miscellaneous Writ Petition No.41013 of 2000 [  M/s. India International Exporters (MBD) Ltd. & Anr. vs. State of U.P.  & Ors.] and another judgment rendered by the High Court of  Allahabad, Bench at Lucknow on 19.3.2001 passed in Writ Petition  No.1117 of 2001 with regard to the interpretation of the notification  issued on 30.4.1984 and as amended on 21.5.1984.         

               In order to dispose of this batch of appeals,  the facts stated  in C.A.No.7817 of 2003 are taken into consideration.  The respondents   (herein writ petitioners)  by  writ petition challenged  the demand raised  by the U. P. Power Corporation  through various bills purporting  to  realize penalty from each of the writ petitioners for violation of peak  hour restriction, before the High Court of Allahabad.  

       State Government of Uttar Pradesh issued a notification under  Section 29-B of the Indian Electricity Act, 1910 ( hereinafter to be  referred to as Act of 1910) known as 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 U.P. Electricity (Regulation of Supply, Distribution,  Consumption and Use) (1st Amendment) Order, 1984 by which Clause 9  of 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 Uttar Pradesh

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State Electricity Board, the Chief Electrical  Inspector, all Deputy Electrical Inspectors and all  Assistant Electrical Inspectors to the State  Government are authorized 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. The supply shall remain disconnected for the  period specified below:                                  (a) Contravention first in point of time \026 5 days                 (b) Contravention second in point of time \026 10 days                 )  Contravention third in point of time- 20 days                 (d) Contravention fourth in point of time-  permanently Provided that for the purpose of this clause any  contravention prior to May 1, 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 upto 100  KVA, at Rs.50 per KVA   on their contracted load. (b) Consumers having contracted load above 100  KVA and upto 500 KVA at Rs.30 per KVA on their  contracted load subject to minimum of Rs. 5, 000. ) 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. "  

The amended order of 1984 was initially applied from 1.5.1984  to21.5.1984.  The State Government again issued another order known  as 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  computerized and can be downloaded for 35 days which will show the  details of consumption including any violation of peak hours restriction  in 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 report number of  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

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the Division Bench of the Allahabad High Court in Civil Miscellaneous  Writ Petition  No.45171 of 2000 the present special leave petition was  filed and  on 12.9.2003 leave was granted by this Court.

               The question before us is limited. Whether one meter  reading inspection report which can download 35 days data should be  construed as single violation of peak hour restrictions irrespective of  fact number of contravention might have  been made by consumer  during 35 days.  In fact, the Division Bench has referred to two circulars   dated 15.10.1998 and 7.4.1999.  Learned counsel for the appellants  submitted that both the circulars have been misinterpreted by the  Division Bench. It was never meant that one report shall be constructed  to be one contravention only though the consumer might have  contravened peak hour restrictions number of times during the 35 days.  As against this, learned counsel for the respondents supported the  judgment of the  Division Bench of the High Court.

               However, in order to appreciate  the controversy  both the  circulars dated 15.10.1998 and 7.4.1999 are reproduced as under :

"       Uttar Pradesh State Electricity Board

               Commercial Division         Shakti Bhawan Extension, Fourth Floor,                 14, Ashok Marg, Lucknow.

No.1367/v.sk.(vp)                       Dt.15.10.1998.

All Chief Engineers \026Region All Chief Engineers- Zone General Manager, KS/LS U.P. State Electricity Board.

                Sub: Regarding non-compliance of restrictions of                   Peak Hours.

The letter  No.3024-CU-2 dated 3.9.97 issued on  the above mentioned subject is hereby cancelled and  it is to inform that the Board had installed static  Meter at the premises of industrial Units, in which  the activities of consumers, related to electric supply,  are recorded in M.R.I.  In case of violation of electric  supply in peak hours, the violation is recorded in the  M.R.I. As per section 22-B  of  Indian Electricity  Act, 1910 there is a provision of penalty and  electricity disconnection for violation of restrictions  of peak hour. Penalty and disconnection is to be on  the number of violations. As per section 42 of the  Indian Electricity Act, the violation of restrictions is  a crime and a criminal case can be initiated for the  same.

The disconnection and penalty will be levied for  and on all the occasions of occurrence of violation,  irrespective of the time of receiving the information.  Therefore, whenever MRI computer print is taken,  the number of violations by consumer shall be taken  to be as many time as indicated in MRI. There will  be no relaxation, nor the violations will be  considered to be as one violation and will be treated  separately. The S.D.O., Junior Engineer and  Lineman in whose area these violations have been  committed by the consumers, should also be  considered to be penalized at the Chief Engineer

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level because of their failure to stop these violations. In this regard it is ordered that power cut penalty  will be imposed for all point of power cut violations.  As far as the question of electricity disconnection is  concerned, in the cases where M.R.I. has not been  got done in time, the temporary disconnection, on  the basis of situation of this case, can be considered.  But at least 5 days disconnection penalty will be  imposed for the first disobedience. Action be taken on the matter accordingly.                                         Sd/-                                 (O.N.Mishra)                                         Chief Engineer (Commercial) No.V.SK(VP) even date. Copy to the following for information and  necessary action.                 1. All Superintending Engineers, Electricity  Distribution Circle, U.P. State Electricity Board.                 2. All Executive Engineers, Electricity  Distribution Division, U.P. State Electricity Board.

                         ****

Uttar Pradesh State Electricity Board                 ( Vanijya Sakandh)                 Commercial Division         Shakti Bhawan Extension, Fourth Floor,                 14, Ashok Marg, Lucknow.

No.1504/CU-II/ Electronic Static Meter  Dt.7.4.1999.

All Chief Engineers ( Distribution ) Zone General Manager, Kesa, Kanpur/Lesa, Lucknow All Chief Engineers( Zone ) Superintending Engineer, State Electricity Distribution Circle, Noida U.P.State Electricity Board.

       In continuation of this office’s circular No.49/CU- 2/ Electronic Static Meter /73 dated 6.1.99 and  No.804/CU-2 Electronic Static Meter /73 dated  25.2.99, on the matter of penalty for violation of  restrictions related to peak Hours, the decision has  been taken in the meeting of Management  Committee of the Board held on 16.3.99 that " For  violation of restrictions of peak hours on the basis of  M.R.I. report for the first time, one penalty for one  month may be  imposed in the bill. For second bill  and thereafter the procedure of penalty will remain  same as mentioned in the circular No.1367- V.SK(V.P.) dated 15.10.98".

       Please ensure the action accordingly.

                                       Sd/-                                 (O.N.Mishra)                                         Chief Engineer (Commercial) Endst.No.1504(I) /CU-II/even date. 7.4.99 Copy to the following for information and  necessary action.                 1. All Superintending Engineers, Electricity  Distribution Circle/ City Distribution Circle                 2. All Executive Engineers, Electricity  Distribution Division/ City Distribution Division

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                                       Sd/-                                 (O.N.Mishra)                 Chief Engineer ( Commercial)."

A perusal of both these notifications makes it very clear that by  communication dated 7.4.1999 the only relief was given for one time and  it was not meant to be given relief for all time to come.  For violation of  restrictions of peak hours on the basis of  M.R.I. report for the first  time,  one penalty for one month may be imposed in the bill. For second  bill and thereafter the procedure  of penalty will remain same as  mentioned in circular dated 15.10.1998. Therefore, according to  the  circular dated 15.10.1998, whenever M.R.I. computer print is taken, the  number of violations by consumer shall be taken to be as many time as  indicated in M.R.I.  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 S.D.O.,  Junior Engineer and Lineman in whose area the violation  has been  committed by the consumers should be considered to be penalized  at  the Chief Engineer  level because of their failure to stop  the violation.    The circular  also further clarified that whenever M.R.I. 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 M.R.I. 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 time 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 M.R.I. 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 prima  facie not borne out on reading of these  circulars. Therefore, we are of  opinion, the view taken by the Division Bench of the Allahabad High  Court cannot be sustained.                  Mr.Suri, learned counsel appearing for the respondents   tried to  challenge the validity of the circulars  and the orders issued  from time to time.  We asked Mr. Suri  whether the validity of these  circulars  has been challenged in the writ petitions before the High  Court or not. We ourselves have gone through each of the appeals and  the judgment of the High Court  and we found out that in none of the  writ petitions  the grievance as to the validity of the circulars has been  agitated nor was it argued before the High Court. Therefore, the  validity of the circulars cannot be questioned before us.  It may be  relevant to mention here that a similar matter came up before the High  Court of Allahabad, Bench at Lucknow and the Division Bench by its  order dated 19.3.2001  has considered  the similar question and after  considering both the circulars observed as follows :

          " Subsequently the Circular dated 7th April,  1999 has been issued which says that the Prabandh  Samiti of the Parishad has decided on 16th March,  1999 that on the basis of the first  Meter Reading  Inspection Report, the consumer would be saddled  with the penalty for one violation in one month but  thereafter on the basis of the MRI the action can be  taken for repeated violations as per Circular dated  15th October, 1998."

Therefore, the view taken by the Division Bench of  Lucknow Bench of  the High Court is correct. It is unfortunate that the Lucknow Bench  decided the writ petition on 19.3.2001 and the Allahabad Bench decided  the matter on 25.3.2001 yet  learned counsel appearing for the

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Electricity Board did not bring the aforesaid judgment of the Lucknow  Bench to the notice of  High Court at Allahabad.  Be that as it may, we  are of opinion that the view taken by the Division Bench of the High  Court at Allahabad is not correct.  This judgment dated 25.5.2001  passed by the Division Bench of the  High Court at Allahabad has been  subsequently followed in rest of the writ petitions. Therefore, all these  appeals have been filed by the appellant-Corporation. In view of the  above, we are of opinion, the judgment dated 25.5.2001 passed by the  Division Bench of High Court at Allahabad  cannot be sustained and the  same is set aside. Consequently, all the Civil Appeals filed by  corporation are allowed and the writ petitions filed by the writ  petitioners before the High Court are dismissed. No order as to costs.

       Subsequently, the Division Bench of  Allahabad High Court has  not followed their earlier judgment which was challenged by the  Corporation in the above appeals.  The Division Bench  of  the High  Court of Allahabad by its order dated 21st August, 2003 dismissed the  writ petitions of the  consumers and did not give  them any relief.   Aggrieved against this order, Civil Appeal Nos.9935-9936, 10078 and  10079 of 2003 were filed by the consumers before  this Court.  As   similar matters were  pending, therefore, they were also  entertained by  this Court and  tagged  with it.         However, we have already taken a view in  aforesaid appeals that   the view taken by the  High Court at Allahabad and their  order dated  25.5.2001 cannot be sustained.  Therefore,  we do not find any merit in  these appeals by consumers.   Hence, these appeals are dismissed with  no order as to costs.                    So far as Civil Appeal No.2793 of 2004, is concerned,  in the  present case, the order dated 21.8.2003 passed by the High Court has  been challenged. The Division Bench of the High Court has followed the  judgment delivered in Civil Misc. Writ Petition No.11225 of 2003[ M/s.  Prachi Leathers (P) Ltd. & Anr. vs. U.P. Power Corporation Limited &  Ors.]. Learned counsel for the appellant pointed out that in fact the  decision given in M/s. Prachi Lathers (P) Ltd. (supra) was in connection  with leather industry and the appellant is cold storage unit which is  specifically exempted as is apparent from communication issued on  9.4.1986 by the Chief Engineer (Commercial), Lucknow in which it is  mentioned that the Government in exercise of the power under Clause  10 of 1977 order exempted the Cold storage from the peak hour  restrictions  Learned counsel for the appellants submitted that  the  appellant industry is a continuous process consumer. Therefore, the  circular referred in communication of Chief Engineer will  govern the  case of the appellants.  It appears that the Division Bench was under  impression that the present case is also governed by the judgment in  M/s. Prachi Lathers (P) Ltd. (supra) where the Division Bench has  dismissed the writ petition. Therefore, we are of opinion, that the view  taken by the Division Bench by its order dated 21.8.2003 cannot be  sustained and the same is set aside. Consequently, this appeal is allowed  and the case is remitted back  to the High Court of Allahabad to  consider  whether the cold storage  industry is a continuous process   consumer and whether it has been exempted by the aforesaid  communication issued by  Chief Engineer (Commercial), Lucknow  dated 9.4.1986.