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PETITIONER: U.P.S.E.B.

       Vs.

RESPONDENT: ATMA STEELS & ORS.

DATE OF JUDGMENT:       20/01/1998

BENCH: B.N. KIRPAL, S.P. KURDUKAR

ACT:

HEADNOTE:

JUDGMENT:                THE 20TH DAY OF JANUARY, 1998 Present:                Hon’ble Mr. Justice B.N.Kirpal                Hon’ble Mr. Justice S.P.Kurdukar D.A.Dave, A.B.Rohtagi,  Sr. Advs., Pradeep Misra, R.B.Misra, Kamlendra Misra, Advs, with them for the appellant. A.K.Singh, Viohal Dixit, Advs, for the Respondents.                          O R D E R      The following Order of the Court was delivered:      Special  leave,   granted  in  both  the  matters.  The respondent obtains  electricity from  the appellant. On 10th December, 1992 a surprise check was made at the respondent’s place and  it was  found that  in the  potential transformer (PT) a  fuse had  been blown off with the result that it was not suppling any electricity from primary cable to secondary cable  and   as  a  consequences  thereof,  the  quantum  of electricity consumed was not being correctly recorded in the meter. A  notice was issued requiring the respondent to show cause as  to why charges for less consumption be bot charged for the  period December  1991 to December 1992. In order to avoid the  disconnection of the electricity, the respondent, with the  permission of the authority, installed a new PT on the respondent  undertaking to  pay in future for the supply given to it.      On 20th  December 1992  respondent gave  a reply to the show cause  notice and  inter also raised a dispute that the PT and  the meter panelling were not working properly. After taking into  consideration the reply, the Executive Engineer on 22nd  January 1993 made an assessment of Rs. 57,77,891,38 and raised  a bill. Thereupon the respondent filed a suit in the Court  of Civil  Judge, Ghaziabad  challenging the  said assessment. The  Civil judge  passed an  ex-parte ad-interim injunction restraining  the appellant  from  recovering  the assessment amount  and from disconnecting the supply. In the written statement  filed by  the appellant herein the demand of  Rs.   57,77,891,38  was   justified.  According  to  the appellant the  respondent, while the suit was still pending, filed an  application before  the Chief Electrical Inspector on 20th  February 1993  purporting to be under section 26 of the Indian  Electricity Act, 1910 requiring the Inspector to

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exercise his  Jurisdiction under  the said  provision and to quash the  aforesaid assessment  which had been made b y the Executive Engineer.  On 6th April, 1993 the respondent filed an application  before the  Civil Judge,  Ghaziabad,  inter- alia,  prayed   that  the   electricity   which   had   been disconnected  should  be  restored  and  the  respondent  be permitted to  pay the aforesaid demand by instalments. Along with the  application 12  post dated  cheques were filed and the respondent  gave an  undertaking to  the  Court  to  the effect that  if after  the acceptance  of  the  cheques  and restoration of  electricity any cheque is not encashed or it is dishonoured  then the  appellant herein  will h  ave  the right  to  disconnect  the  electricity  of  the  respondent without  any   notice.  This   application  was  made  while reserving the  right of  the respondent  to make a reference for arbitration.  On the  same day, the Trial Court accepted the  application   and  ordered   the  reconnection  of  the electricity and  it was specifically mentioned in this order that  the   conditions   mentioned   in   the   respondent’s application will  form part of the order. 3 days thereafter, the suit itself was withdrawn.      The Chief  Electrical Inspector  took cognizance of the application which  was filed  before it and issued notice to the appellant  herein. Though  reply was  filed, to the said application, the respondent filed a Writ Petition before the Allahabad High  Court which was disposed of on 5th November. 1993 with  a direction to the Electrical Inspector to decide t he reference within 6 weeks.      By the  order dated  15th April,  1994  the  Electrical Inspector  allowed  the  application  after  coming  to  the conclusion that  the fuse in one of the PT had blown off but the amount  which was  demanded by  the  appellant  was  not reasonable, Curiously  enough, having come to the conclusion that the  meter had  not recorded  the correct amount of the consumption of  electricity because  of the  blowing off the fuse the  Electrical Inspector  did not himself assess as to what should  have been  the correct  amount payable  by  the respondent.      The appellant  then filed  an appeal  before the  State Government under  sec. 36(2)  of the Indian Electricity Act, 1910. This  appeal was  allowed with the appellate authority coming to  t he  conclusion that  transformer could  bot  be regarded as  a meter  and therefore the Electrical Inspector had no  jurisdiction under  sec. 26(6)  of the  said Act  to entertain the  application of  the  respondent. This finding was again  challenged by  the respondent  by way  of a  writ Petition and  the High  Court, by the impugned Judgment came to the conclusion that the transformer had to be regarded as a meter within the meaning of that word in sec.26(7) and the appellate authority  was not  justified  in  coming  to  the conclusion that the Electricity Engineer had no jurisdiction to decide  the application.  The appellate authority’s order having been  set aside,  the matter was remanded by the High Court but  with the  direction  hat  the  appeal  should  be decided  b   y  the  competent  authority  preferably  by  a technical hand  nominated by the State Government other than the Energy Secretary.      We have  heard the counsel for the parties and seen the material on record and we see no reason to disagree with the conclusion  of   the  High  Court  regarding  the  Inspector entertaining the  application under  sec.26(7) specially  in view of  the  fact  that  inthe  Manual  on  H.T.  Consumers Metering published  by the  Central Board  of Irrigation and Power regarding  the potential  transformer with relation to salient feature of metering equipments it is stated as under

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:-      " (i)  The metering  equipments consist  of   CT and PT units. For  LT meters (i.e., for 3 phases 4 wire) only three single phase  VTs are  required. For HT metering 3 phases PT and tow  CTs in  R &  B phases  are required. CTs and PTs or only CTs  for LT metering are to be tested for their correct polarity and  ratio as  per their terminal markings and name plate  details   respectively,   beside   their   insulation resistance etc.  since the  CT and  PT ratios  have a direct relation with the consumption recorded by  a meter."      It is clear that the only function of the PT in a given case like  the present  where the power is being supplied to the respondent at 11000 Volt, is to reduce it to 110 Volt so no to  enable the  meter to record the amount of power which is consumed  by the  industry. It  is common ground that the existing meter  could not  record the  power consumed unless there was  stepping down  of the  voltage from 11000 to 110. This stepping  down was  done by  the PT.  It is also not in dispute that  after the  recording of the consumption by the meter the  power, which  was reduced from 11000 to 110 Volt, is not  used by  the respondent. This clearly shows that the only function  of the  PT was  to enable the ascertaining or regulating  of   the  amount   of  energy  supplied  to  the respondent. This instrument namely the PT has, Therefore, to be regarded  as a  meter in  view of  the provisions of sub- section (7) of sec.26 and the second proviso, in particular, and therefore  the High  Court was  right in  coming to  the conclusion   that   the   Electrical   Inspector   had   the jurisdiction to  exercise his  powers under sec.26(7) of the Act. The  order of  the apple late authority, therefore, was rightly set aside.      The High Court, however, was not justified in issuing a direction that  the appeal  should be  heard by  a technical hand and  by a person other than the Energy Secretary. Under sec 36,  sub-section (2)  and appeal  which is filed against the order of the Electrical Inspector h as to be heard by an Advisory Board.  Who is  to  hear  the  appeal  is  for  the Government to decide and therefore a direction indicating as to who  in the  Government should  hear is ordinarily not in conformity with  the provision  of  sec.36(2)  and  was  not called for  on the  facts and  in the  circumstances of this case. Therefore,  the Judgment  of the  High Court  to  this extend cannot be sustained.      The High  Court also  over looked  the  fact  that  the respondent had  secured a  favorable order  from  the  Civil Judge, Ghaziabad  on its  own giving an undertaking t hat he would pay  the amount  demanded  by  the  responded  if  the electricity is ordered to be reconnected. The undertaking so given formed part of the order when the said application was accepted and  reconnection directed.  In view of the conduct of the  respondent, who  of course had reserved its right to take recourse  to arbitration  as it  disputed the demand of the  appellant,  the  High  Court  ought  to  have  put  the respondent to  terms while  directing  the  hearing  of  the appeal.      In our  opinion, the  respondent cannot  be absolved of its obligation  to pay  the amount demanded, as agreed by it in the  undertaking which  it had  furnished  to  the  Civil Judge, Ghaziabad.  We accordingly  direct that the appellant would be  entitled to  realise the amount outstanding as per the demand  dated 20th  January 1993. We are informed that a part of  the demand has paid inasmuch as 5 out of 12 cheques which were tendered were encashed and for the balance amount a Bank  guarantee has  been Furnished. The appellant will be at liberty  to encash the said Bank guarantee. The direction

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of the  High Court  remanding  the  case  to  the  appellate authority for decision on merits is upheld. If the appeal is dismissed the respondent would b e entitled to refund of the excess amount paid by it but if ultimately the whole or part of the  demand raised  by the  appellant is  upheld then the respondent will be liable to pay interest. Similarly, if the appeal is  dismissed the  respondent  will  be  entitled  to interest on  the amount  to be  refunded to him. The rate of interest in either case will be 24%.      Both the  appeals are  disposed off.  There will b e no order as to costs.