Judgment:
U.D. Salvi, J.
1. Article 226 of the Constitution of India has been invoked by the petitioner, Venkateshwara Alloys (P) Limited, a Company incorporated under the Companies Act, 1956, and having its registered office at Bright Complex, Mehdipatnam, Hyderabad, for seeking a writ directing the respondents to forthwith restore the electric power supply to the petitioner's plant situated at Kundaim Industrial Estate, Kundaim Goa, which has been disconnected as back as on 14-12-1998, upon the payment of such amount by way of arrears of electricity charges as determined to be legally due and further for a declaration that the provisions of Clauses 29(b) and 31(c)(ii) of Notification dated 6-11-1989 published In the Official Gazette dated 18-1-1990 are ultra vires the powers of the State Government under the Electricity Act, 1910 in particular Section 24 thereof.
2. According to the petitioner-company, a plant for manufacturing ferro/silicon, manganese and chrome alloys was set up following an Agreement dated 28-2-1995, assuring regular supply of electric power to the said plant In required quantity, with the Government of Goa; and electric power was availed as per the terms and conditions set out in the said Agreement till May, 1998. The petitioner states that the respondents the State of Goa, and its Chief Electrical Engineer and Executive Engineer (Electrical), Imposed a power cut on the petitioner's plant allowing use of power only between 1st and 10th of every month with peak hours restriction from 16.30 hours to 22.00 hours, vide letter dated 5-5-1998, and these restrictions resulting in drastic power cut made it impossible for it to continue with the industrial production at the plant as its industry depended upon the continuous supply of electric power to the plant at the agreed quantity and as a consequence thereof the said plant was closed down in June, 1998.
3. In the aforesaid circumstances the petitioner states, the respondents discontinued power supply to the plant temporarily from 5-6-1998. Inability to pay the electricity bills, the petitioner states, was communicated to the respondents with the reasons therefor by the letter dated 23-6-1998. Finally, the electric supply to the plant was cut off by the respondents from 14-12-1998, according to the petitioner, without prior notice to it. However, the petitioner states, the respondents did not dismantle the service line material.
4. In March, 2006 the petitioner decided to commence the production at Kundaim plant and requested the respondents for minimum charges from June, 1998 along with late payment charges and to grant rebate of 25% on energy charges for the months of March and April, 1998 and to provide for facility of payment of remaining arrears in 46 instalments of Rs. 6,916/- each for restoration of electric power to its plant vide letter dated 8-3-2006. Initially it appears that there was no response to the said communication from the respondents and the petitioner did not know the exact amount legally payable by it for restoration of power to its plant; and after prolonged correspondence and discussion between the two a demand for payment of a sum of Rs. 1,81,07128/-towards the arrears of electricity charges for the period from March, 1998 to November, 1998 (Rs. 41,07,6817) with 18% compound interest thereon from 30-11-1998 to 31-5-2008 was made by the respondents for restoration of power to the petitioner's plant vide letter dated 2-9-2008.
5. The Respondents joined the issues with the affidavits in reply of the respondent No. 2 Chief Electrical Engineer, Electricity Department, of the State Mr. Nirmal Braganza dated 10-11-2008, 17-11-2008, 2-3-2009 and lastly affidavit in reply dated 6-3-2009.
6. According to the petitioner, it was impossible, therefore, to continue with the said industry and the production at the plant due to imposition of drastic power cut on the plant contrary to the promise of continuous power supply incorporated in the Agreement dated 28-2-1995 as its industry required continuous supply of power; and charging of compound interest at the rate of 18% per annum on the alleged arrears is illegal, unreasonable, arbitrary and void, particularly when the respondents have waived interest on the electricity charges in similar cases.
7. Learned Advocate Shri Kakodkar for the petitioner pointed out from the Clauses 11 and 12 of the said Agreement dated 28-2-1995 that it was the duty of the supplier of the electricity i.e., the respondents to take all the reasonable precautions for the continuity of supply of power to the petitioner M/s. Venkateshwara Alloys (P) Limited, exception being interruption in supply of power by reasonable damage to the equipment of the supplier during the war, strike, riot, accident or such other natural disasters or for routine maintenance of line or such other accidents as may be beyond the control of the supplier. In light of such covenant, learned Advocate Shri Kakodkar submitted that the power restriction imposed on the petitioner allowing to use the power between 1st and 10th of every month with peak hours restriction from 16.30 hours to 22.00 hours, vide letter dated 5-5-1998, virtually amounted to disconnection or denial of the power supply to the petitioner. He further pointed out that no notice of disconnection of power supply as contemplated under Section 24 of the Indian Electricity Act, 1910 was served on the petitioner as per the provisions of Section 53 of the said Act. From the language of Section 24 of the Indian Electricity Act, 1910, learned Advocate Shri Kakodkar argued, it can be clearly seen that the Respondents supplier could no longer continue to deny electricity supply to the Petitioner, the moment such charges or other sum lawfully due to the petitioner together with the expenses incurred in cutting of and reconnecting of supply were tendered; and such position of law continues to exist in the analogus provisions under Section 56 of the Electricity Act, 2003; and as such under both the laws old as well as new there is no provision for permanent disconnection of electricity supply and therefore, there is no question of granting any fresh connection to the petitioner. Such being the position of law on the point of supply of electricity to the consumers, learned Advocate Shri Kakodkar argued, the rules framed for permanent disconnection of the electricity supply and consequent restoration of electricity supply to the consumer as a fresh applicant namely Clauses 29(b) and 31(c)(ii) of the Notification dated 6-11-1989 published in the Official Gazette dated 18-1-1990 are ultra vires the powers of the State Government under the Electricity Act, 1910 in particular Section 24 thereof. He further pointed out flaw in the affidavit in reply tendered on behalf of the respondents inasmuch as the affidavit in replies were sworn by the Chief Electrical Engineer of Electricity Department of the Government of Goa and not by Secretary to the Government of Goa as required for answering challenge to the vires of the Notification issued by the Government under a statute.
8. In light of the judgment reported in : AIR 1998 SC 1715, Hyderabad Vanaspathi Ltd. v. Andhra Pradesh State Electricity Board and Ors., one can clearly see that the supplier i.e., respondents herein in performance of statutory duty supply energy on certain specific terms and conditions framed in exercise of a statutory power and, therefore, the relationship between the supplier and the consumer is more of statutory in character rather than purely contractual. It would be therefore important to examine the validity of the provisions governing disconnection of electricity supply and its restoration vis-a-vis the statutory provisions.
9. Learned Advocate General Shri Kantak for the State urged to have holistic view of the provisions in the Agreement dated 28-2-1995 particularly Clauses 2(a), 3, 10, 12 and 15 of the Agreement in connection with the provisions of Electricity Act, 1910, particularly Sections 24 and 22(b) thereof. He argued that the Agreement to supply electricity dated 28-2-1995 between the petitioner-consumer and respondents-supplier was for a period of seven years from the date of commencement of supply in the year 1995 and from the year to year thereafter determinable by six calendar months' notice on either side expiring at the end of said minimum period of seven years or at the end of any such subsequent year; and on this background the respondents had communicated closure of its unit vide letter dated 23-6-1998 and had not challenged disconnection of the electricity supply at any time thereafter. Learned Advocate General further pointed out that the said Agreement vide Clause 12 provides for restriction, staggering or cutting of the consumption of electrical energy under the said Agreement during the peak hours and at any other hours if the power position or any emergency in the power system warranted such a course of action and, therefore, the criticism of the respondents act of restricting the power of letter dated 5-5-1998 addressed to the petitioner is unworthy. He further submitted that Section 22B of the Indian Electricity Act, 1910 conferred power to control and regulate the distribution of energy on the State Government for better and effective management of the power amongst the consumers. He argued that the power scenario fluctuated from time to time and the Government was not expected to deny power to the current consumer for sake of the consumer who had stopped consuming electricity for fairly long time on account of disconnection of the electricity supply. He further pointed out that the Chief Electrical Engineer enjoyed power of Secretary to the State in relation to the act of swearing of affidavit on behalf of the State.
10. Section 24 of the Indian Electricity Act, 1910 permits discontinuation of supply to the consumers neglecting to pay the charges for consumption of electricity. In the instant case, it is admitted position that the power supply to the petitioner's plant was cut off from 14-12-1999, for the reasons of the petitioner neglecting to pay electricity charges. Learned Advocate Shri Kakodkar for the petitioner pointed out that there has been no material to suggest that the power supply available to the petitioner was cut off following the notice as contemplated under Section 24 of the Act of 1910 and therefore the act of discontinuation of power supply was void and, therefore, could be ignored as being non est. In making this point he relied upon the Judgment reported in 2004 GLR 141 : : AIR 2003 SC 2162, Dr. Nishikant Sukerkar v. Government of India, In his view such void act of discontinuance of power supply to the petitioner requires seeking of no specific declaration in a legal proceedings.
11. In order to counter to these submissions made on behalf of the petitioner, learned Advocate General Shri Kantak for the State rightly pointed out that the act of discontinuance of power supply to the petitioner was not void but merely voidable as in any case the supplier in discontinuing the power supply did not act without jurisdiction and, therefore, It was all the more necessary for the petitioner to seek a declaration regarding discontinuance of the power supply to it. Having riot done so he argued that the present petition suffers from legal infirmity and the act of discontinuance of power supply remains unchallenged.
12. Rational approach to reading of the provisions of the Indian Electricity Act, 1910 has been amply shown in the judgment delivered by the Division Bench of this Court in Bharat Barrel & Drum . v. The Municipal Corporation of Greater Bombay and Anr. reported in : AIR 1978 Bombay 369 in the following terms:
The provision in Section 24 of the Electricity Act has to be properly appreciated in the context of the obligations cast and the restriction placed on the licensee under Sections 22, 22A and 22B and 23 and 24 itself. In the light of these statutory provisions there is no warrant to read the word 'due' in the narrower sense namely as only restricted to amounts within the period of limitation or which, could be successfully claimed by a suit in other words there is no logical basis shown for preferring the narrower construction to the ordinary construction i.e., the wider construction. The wider meaning would be more in accord with the scheme of statutory provisions as also with commercial honesty.
The right to discontinue the supply of electricity is without prejudice to the licensee's right to file, a suit to recover the amounts, since by reason of disconnection of the supply the licensee will not necessarily obtain the amounts due from the consumer.... The provision contained in Section 24 which enables the licensee to discontinue electric supply to a particular consumer is manly by way of relieving the licensee of the obligation on him to be found contained in Section 22 namely to make supply of electricity on application to all consumers within the area of supply.
13. Obviously, the petitioner did not make any requisition for the resumption of supply of energy within a period of six months from the date of its discontinuance. Section 22B of the Indian Electricity Act, 1910 confers discretionary power on the State Government in the matter of making provision for regulating the supply, distribution, consumption or use of energy for the purposes of securing equitable, distribution, and further grants freedom to make an order, without prejudice to the generality of the powers conferred by Sub-section (1) of Section 2(b) of the Act to direct the licensee (supplier) not to comply, except with its permission (State Government), with any requisition for the resumption of supply of energy to the consumer after a period of six months, from the date of its discontinuance. Learned Advocate General Kantak further in reference to these powers under Section 22B of the Indian Electricity Act, 1910, submitted that in recent case the petitioner could have Invoked Section 24 for restoration of its power supply on tendering its dues thereunder within six months from date of discontinuance of the power supply, and thereafter now it has to apply to the High Power Committee of the State Government as a fresh applicant for the power supply and submit itself to the discretion of the High Power Committee as to whether the power supply is to be restored or not. His submission in light of the provision under Section 22B of the Indian Electricity Act, 1910 does make a sense. In this view of the matter the submissions of learned Advocate Shri Kakodkar on behalf of the petitioner for restoration of power supply as of unfettered right as old consumer deserves to be rejected. It is required to be noted that the power supply was disconnected as back as on 14-12-1998, as against that this petition is filed in the year 2008 with a prayer that the power supply should be reconnected. It was argued before us with great vehemence that the action of disconnection of the electric supply in the year 1998 is ab initio void and, therefore, no period of limitation applies. The correspondence on record indicates that after the supply was disconnected, the petitioner had not specifically approached the respondents for restoration of the electric supply for a considerable period. The grievance of the petitioner in connection with the disconnection of the electric supply, which happened more than 11 years back, is too stale to be considered now.
14. In light of the aforesaid discussion, the provision made under Rule 29(b) for treating the consumer as a fresh applicant for the purposes of restoration of supply to its premises after removal of service line following disconnection for a continuous period of six months appears to have been made in consonance with the provisions of the Indian Electricity Act, 1910.
15. As regards the recovery of compound interest at the rate of 18% per annum, learned Advocate Shri Kakodkar for the petitioner, pleaded that even if there was power to charge interest such power need not be exercised in the case like the one in the, present matter when there was breach of obligation to supply electricity continuously, on the part of the respondents and as a result thereof there existed no duty on the part of the petitioner-consumer to pay any such interest. Learned Advocate General Kantak for the State countered the submissions made on behalf of the petitioner with an.aY-, gument that at no point of time earlier any grievance was made by the petitioner about the disconnection of power supply but instead had shut down its plant long back, and as such the petitioner remained under, obligation to pay charges for energy or any, sum other than charged for energy due in respect of the supply of energy as envisaged under Section 24 of the old Act for recalling the supply. He further submitted that at the first instance the petitioner was charged for the energy actually consumed by it, i.e., it was charged Rs. 41,07,6817- for the actual energy consumed for running its plant as on 30-11-1998 and only thereafter interest accrued on such sum/s from time to time was charged to the petitioner. He pointed out that the petitioner was running a commercial enterprise and in doing so was making profit from the products manufactured on consumption of electricity: and therefore delay in making the payment of its dues was required to be compensated in terms of interest. In fortifying his arguments learned Advocate General Shri Kantak relied Upon the judgments reported in : AIR 1984 SC 762, Khazan Chand v. State of Jammu and Kashmir and Ors., : AIR 2003 SC 4482, South Eastern Coalfields Ltd. v. State of M.P., and Ors., : AIR 2006 SC 1223, Sandvik Asia Ltd. v. Commissioner of Income Tax-I, Pune and Ors. A pertinent premise of law that a sum wrongfully withheld from the party to which it is due carries interest is found evolved over a period of time through the strides the law has taken through the judgments cited on behalf of the State. Certainly in the present case, the petitioner remained under obligation to pay the charges for the energy, consumed by it in course of commercial activity and as such no wrong is seen to be done if the interest was charged on the amount/s due from it in that regard.
16. Rule 31(c)(ii) of the Notification dated 6-11-1989 which reads as under:
If the service connection remains under temporary disconnection for a period of six months for a non-payment of arrears action will be initiated under Clause 29(b) and case referred to Revenue Recovery Court to recover arrears. An interest of 18% per annum will be charged to the outstanding amount from the date of referring the case to the Revenue Recovery Court till the arrears are recovered.
Therefore, cannot be said to be ultra vires the powers of the State Government under Section 21 and Section 51A of the Indian Electricity Act, 1910 provided for regulating its relation with the consumers.
17. While choosing to challenge the powers of the State Government under Electricity Act, 1910, learned Advocate Shri Kakodkar for the petitioner alluded to the new Electricity Act, namely the Electricity Act, 2003 and submitted that there is no provision for permanent disconnection of the electricity supply to the consumer under the new Act. He argued that under the new Act, the State Government i.e., respondents remained under obligation-to supply the energy to the petitioner and the right of the petitioner to get the electricity is unfettered, learned Advocate General Shri Kantak for the State in response thereto made submissions that the rights of the parties in relation to the factual matrix before this Court had crystallized long back when the power supply to the petitioner was finally and permanently disconnected in the year 1998 and as such the petitioner ceased to be consumer as envisaged under the Electricity Act, 2003 and therefore nothing survives for the petitioner to make claim under the new Act. He further pointed out from Section 185(2)(a) of the Electricity Act, 2003 that notwithstanding the repeal of the old Act anything done or any action taken or purported to have been done or taken under the repealed laws shall in so far as it -is not consistent with the provisions of the new Act i.e., Electricity Act, 2003, be deemed to have been done under the corresponding provisions of the new Act. In light of these submissions one can clearly see that the action of discontinuing of the supply to the petitioner was purportedly under Section 24 of the old Act and such action has to be read as action under the corresponding provision i.e., Section 56 of the new Act.
18. As already discused above, the permanent of discontinuance of the power supply under the old Act had already crystallized the rights of the parties and had brought about the new configuration of relationship between the parties I.e., petitioner as fresh applicant vis-a-vis the respondents supplier. The status of the petitioner under Section 56 of the Electricity Act, 2003 is therefore no longer that of consumer as envisaged under the said Act. In terms of provisions of Sub-section (1) of Section 56 of the Electricity Act, 2003 a person, whose electricity supply has been cut off on account of neglect to pay the charges of electricity or any sum other than the charge of electricity due from him, continues to remain under obligation to pay all such charges for the energy consumed by him including other sums for restoration of the electricity supply to him.
19. It is pointed out by learned Advocate Shri Kakodkar for the petitioner that in course of the hearing in Writ Petition Nos. 600 and 601 of 2008, the State had made a statement before this bench on 17-12-2008 that High Power Committee had taken a decision to release high power connection to the petitioners therein namely 21st Century Iron and Steel Ltd.; and that such concession may be extended to the present petitioner considering the facts and circumstances in the present case. So far as aforesaid aspect is concerned, we permit the petitioner to apply for release of high power connection to the petitioner and, in case, such an application is made, the same be considered in the same manner as it was considered in Writ Petitions Nos. 600 and 601 of 2008, provided the petitioner makes payment of its earlier dues. Regarding waiving of interest or extending any concession in this behalf, it is open to the petitioner to make an appropriate representation and if such a representation is made, it is for the said Authority to consider the same as it deems fit and proper and in accordance with law.
20. Considering the aforesaid aspect of the matter, we do not find any substance in connection with the prayers made in this petition. As pointed out earlier, the disconnection was effected in the year 1998 and the petitioner has challenged the said action after more than a decade. However, as pointed out earlier, if any application is made to the Department for release of the high power connection to the petitioner, such an application may be considered in accordance with law by referring the matter to the High Power Committee and the High Power Committee may, accordingly, consider the case of the petitioner, in accordance with law and may further consider whether the benefits extended to the petitioners in Writ Petitions Nos. 600 and 601/2008 can be extended to the petitioner in this petition as well.
21. Subject to what is stated above, by permitting the petitioner to make necessary application for releasing the high power connection, as well as subject to the liberty to the petitioner to make a representation regarding waiving of interest or reducing the rate of interest, and subject to further direction that in case if any representation is made in this behalf, the Authority may consider the same in accordance with law and decide the same expediously and preferably within a period of 3 months from date of receipt of such representation, the petition is dismissed.
22. The petition is accordingly, dismissed, subject to what is stated above. Rule discharged. No order as to costs.