Judgment:
ORDER
1. The petitioner Sri Krishnarajendra Mills Limited, Mysore entered into an agreement with the State Government for supply of electrical energy to the Company with the agreement providing for terms and conditions regarding minimum charges payable, mode of supply of energy, metering, payment for supply of energy inclusive of disconnection of supply in the event of nonpayment of arrears. The agreement also provided for rate per unit at which electricity so supplied is to be charged. After the Karnataka Electricity Board came into existence, similar agreements were executed between the petitioner and the Board for periods of five years duration at a time, subject to renewal after the expiry of such agreements. The Board has installed a meter in the premises of Sri Krishnarajendra Mills in order to caliberate the power consumed by the factory. The Meter Number is HT-17 and there are two meters installed in the celebrating system, one for the purpose of calculating the demand KVA and the other for recording the actual energy consumed. The entire metering system is placed in a cubicle which is locked from outside and then sealed by the Board and the meter is the property of the Board and its responsibility is to maintain the meter also and the petitioner has no control whatsoever over the functioning of the meter. In order to take the readings from the meter, the officials of the respondent-Board visit the premises, note down the actual reading of the meter and based on the readings, furnish a bill for payment of the amount in respect of the energy consumed for the corresponding month in accordance with the prescribed rates. The officials of the respondent-Board are expected to and have been recording the meter readings regularly every month without interruption and the petitioner has been paying the monthly bills regularly as and when they are received.
2. Controversy arose when a letter dated 29-6-1979 was received by the petitioner from the Executive Engineer (Electrical), City Area, Mysore belonging to the office of the first respondent-Board informing that during the visit of one Sri Vasudevan, Assistant Executive Engineer, K.E.B. to the Mills on 9-12-1977 at about 7 p.m., he found on a test-check that H.T. meters of installation were not recording consumption of energy at all. He informed the Executive Engineer (Electrical), K.E.B., City Area Division, Mysore that non-recording was due to non-voltage in supply to the meters and this being on account of slight unscrewing of the two screw type fuse units provided on the two potential circuit inside the meter cubicle. It was also made out in the letter that the Assistant Executive Engineer found out this fact only after he broke open the seals and broke open the door of the cubicle. The letter also discloses that there are two independent supply feeders to the petitioner-company which is common to some other net work of branch lines which are stationed at Forbes Transformer Station (F.T.S.) and that the major consumption of power output of power from the said F.T.S. is only the petitioner-company. The letter stated that whereas during the period between April 1976 to November, 1977 except for the month of February, 1977, that the consumption recorded by the meters in the petitioner's premises was not commensurate with the output resulting in heavy loss of revenue to the Board and that it was not possible to recover amounts commensurate with the quantity of power sent out from F.T.S. and hence the petitioner-company should be liable to make good the loss together with tax. Thereupon the petitioner was called upon to make payment of a total sum of Rupees 21.83,359.64 ps. under Annexure-C. The petitioner replied to this demand by a letter dated 5th and 6th July, 1979 seeking clarification from the respondent regarding the basis on which the demand was made. Since no reply was received despite the reminder dated 17-7-1979 addressed to the Executive Engineer requesting for particulars, another letter wasaddressed to the second respondent on 10-8-1979 denying the liability to pay the amount demanded and other allegations contained in the letter in specific terms. The second respondent addressed another letter dt. 6-10-1979 to the petitioner stating that the basis for assessment of units on which additional demands are raised was under preparation and would be furnished early and sought the co-operation of the petitioner for certain other information. The petitioner replied to this letter on 19-3-1980. At this stage, the second respondent wrote a letter on 22-8-1983 threatening stoppage of power supply if the arrears indicated in letter dated 29-6-1979 was not paid and further that the Board would claim interest at the rate of 15 per cent from July 1979 onwards on the entire sum of Rs. 21,10,457.32 ps. This letter also was replied to by the petitioner on 1-9-1980 again reiterating that the petitioner is not liable. The petitioner, therefore, requested the respondent to withdraw the illegal claim made under letter dated 29-6-1979. But the second respondent issued a notice dated 4-1-1982 under Section 24 of the Indian Electricity Act, 1910 calling upon the petitioner to pay a total sum of Rs. 30,22,311.64 ps. within seven days therefrom failing which, the installation would be disconnected. This was also replied to by the petitioner by letter dated 1-9-1980 urging the respondent to withdraw the claim and to close the file. It is stated that though a notice of disconnection was served on the petitioner by the respondent under Section 24 of the Act, it was not given effect to. But the respondents included the aforesaid amount in the electricity bill for the month of June, 1979. But the petitioner paid consumption charges only in respect of the power consumed for the month and pointed out that they are not liable for payment of the arrears additionally included. This was happening every month when the amount mentioned under letter dated 29-6-1979 was included in the monthly bill adding interest every month. But the petitioner took a firm stand and was paying only the actual charges of consumption of energy for the corresponding months and did not yield to the demand for payment of alleged arrears. One more disconnection notice was issued under Section 24 of the Act dated 19-3-1983 calling upon the petitioner to make payment of the sum of money noted therein within seven days in default of which, the installation would be disconnected. Thereupon the officials of the petitioner-company met the respondents and explained to them the stand of the petitioner regarding the demands raised in pursuance of the letter dated 29-6-1979. The respondents relented and agreed to accept the charges for the current month and did not enforce the notice. The petitioner addressed a letter dated 1-10-1983 to the Chairman, K.E.B. clarifying Us stand and explaining how the demand raised by the Board is unjust and illegal, requesting the Chairman to withdraw the demands and to allow the petitioner to carry on its activity without hindrance. As a follow-up action when the Finance Manager/Secretary and the Electrical Engineer of the petitioner-Company met the officials of the respondent-Board including the second respondent at Mysore on 4-10-1983 they were surprised to learn that the officials of the company had already given instruction to issue a 24 hours disconnection notice in pursuance of their earlier notice dated 19-3-1983 and also that once such a notice is served, the power supply to the installation would be disconnected without any further reference unless the payments are made within 24 hours of the demand was made by the Board. It is in these circumstances the petitioner was left with no option but to seek legal redress through this writ petition.
3. The petitioner has sought for a writ of mandamus forbearing the respondents from taking any penal action in pursuance of notice dated 19-3-1983 based on a letter dated 29-6-1979 and also to restrain them from enforcing the demand made under Annexure-G as well as any other demand the respondent may raise under Annexure-C. The other remedies sought by the petitioner are for grant of a certiorari to quash the impugned demand under Annexure-G dated 19-3-1983 or any other demand the respondents may raise based on the impugned letter of 29-6-1979 and to quash Annexure-C.
4. In the statement of objections filed on behalf of the respondents, it is contended that the petitioner continues to be liable and the liability does not disappear merely because the meters are placed in cubicles and locked and that therefore it cannot be said that the petitioner is not responsible if there is anything wrong with the meter. It is asserted that on account of slight loosening of the screw type fuse units, 'the meter was not recording the readings' and the quantum of energy not recorded in the meter was assessed on the basis of the meter recording in F.T.S. panel. It is contended that this reading tallied with the possible energy consumed for the production in the petitioner's Mill. It is admitted that on account of certain technical reasons, screws of the fuse units became loosened though the seals of the cubicle were intact and, therefore, the petitioner is liable to pay the demands made in respect of the non-recording meter not because the petitioner is responsible for the loosening of the screws of the fuse but because the petitioner has nevertheless utilised the energy which ean be tallied with reference to the production in the petitioner's Mill. Another contention raised is that the writ petition is unsustainable since the petitioner has not exhausted the alternative remedy available under the provisions of the Karnataka Electricity Act and Rules framed thereunder.
5. The last contention is that the writ petition has to be dismissed for laches since the petitioner has approached this Court after a lapse of 4 years challenging the demand made under letter dated 29-6-1979 under Annexure-C.
6. The point for consideration is whether the respondents are justified in demanding payment from the petitioner on the basis of letter dated 29-6-1979 under Annexure-C to the tune of Rs. 21,83,359.64 ps. and whether Annexure-G deserves to he quashed along with Annexure-C.
7. In the course of the arguments, the learned Standing Counsel appearing for the respondents was called upon to make available the letter dated 23-12-1977 addressed by Sri S. Vasudeva, Assistant Executive Engineer (Electrical), R.T. Sub Division, Mysore to the Executive Engineer (Electrical), K.E.B. City Area Division, Mysore together with particulars regarding consumption recorded at K.R. Mills for a period of 18 months anterior to December, 1977. The object of calling upon the learned Counsel to make available the documents was because of the material relevance of the same for the purpose of ascertaining whether at the end of every month during the said period of 18 months the meter reading had remained constant or in other words, the meter had not recorded the consumption of energy for each month as discovered on 9-12-1977 by the Assistant Engineer (Electrical). Another object which prompted me to cause the production of the said documents was to see from the contents and language of the letter addressed by the Asstt. Engineer who is supposed to have carried out the test-check on 9-12-1977 at the mill premises of the meter, what actually transpired and what was actually communicated by him to the Executive Engineer (Electrical) since that letter from the Asstt. Engineer (Electrical) to the Executive Engineer (Electrical) constitutes the earliest information of what is supposed to have transpired.
8. I have gone through the letter dated 23-12-1977. The following is the relevant excerpt from the letter :--
'Dear Sir,
I wish to bring to your kind notice that during my visit to the H. T. installation No. HT-17 at M/s. Krishnarajendra Mills, Mysore on 9-12-77 at about 7p.m. for test checking, it was found both the meters were not recording. The main door cubicles which was sealed by us on 10-3-77 after attending to the trouble of M.D. Meter was found replaced by O & M Seal and was not intimated to us at all. Tn fact a separate door was got done for the M.D, Meter at the time of our rating on 11-10-76 and also intimated the several cases that the main door seal shall not be opened under any circumstances and in the event of discrepancies observed shall be brought to our notice so as to attend to it immediately. Accordingly on 10-3-77 it was orally intimated to us by Asstt. Engineer, Ele., North Zone, over telephone that the M. D. Meter haskicked to the maximum. On his oral report we visited the installation and found that the seals were intact. There was loose contact in 'R' phase fuse unit. It was a screw type fuse unit. The same was set right properly and observed the consumption of previous months and taken to be in order. In fact it was in the range of 40% power cm entitlement of 8,88,817 which came into effect from 15-9-76. Back billing was preferred for the period the fall in consumption of 50% intimated by us. But before 40% cut in the months July 76, Aug. 76 and Sept. 76 his average consumption per month was approximately 10,25,000 units.
On 9-12-77 after finding the meters not recording, the seal of the main door was opened and measured the voltage in the terminal block. First we were of the opinion that the supply might have gone, but later it was confirmed that the supply was there and there was voltage in the test terminal block. Then voltage was measured at the entry of fuse units. It was O.K. Then measured at exit where there was no voltage. It lead to the doubt and found that both the screw fuse units were loosened. The same was brought to the notice of the Electrical Engineer of the Mill. Later the reading of the meters were noted which were as follows:--
M.D. (KVA) 48.5KVah 53176KWH 3395.8 Fuse units were screwed tightly and meter started recording.'
The other documents produced before me contains particulars regarding consumption recorded at F.T.S. and K.R. Mill, average units of T.Cs. to K.R. Mill-I & II and also losses, loss of units to be billed etc. The particulars furnished bear the signature of Assistant Engineer (Electrical), Relay Testing Sub-Division, SRS, Hootagalli, Mysore-5.
9. From the particulars furnished for a period of 18 months in respect of which bill has been raised by the respondents and payment demanded from the petitioner, anterior to December 1977, it is patently clear that during the end of each month or the beginning of the following month to be more precise, energy consumed as shown in the meter has been read and recorded and every month there is a registering of increase in the amount of energy consumed. In other words, the meter had not stopped recording the energy consumed during any one of these months. In other words, the meter was not dis functional at all as revealed by these figures and it was only in the month of December 1977 on 9-12-1977 at about 7 p.m. when the Asstt. Engineer (Electrical) visited the factory and carried out the test checking that he discovered that the meter was not recording at all.
10. From the report submitted by the Asstt. Engineer (Electrical) Sri Vasudeva to the Executive Engineer (Electrical) Sri N. Viswanathaiah it is clear that the seals of the cubicle were absolutely intact and that the meter was not recording. From this it is to be gathered that there was no tampering with the cubicle and the seals of the cubicle. At any rate, it is not the case of the respondents that there was tampering on the part of the petitioner in regard to the cubicle of the meter. The non-recording is attributed to loosening of both screw fuse units. It is not the case of the respondents that such a loosening was done by the petitioner. After discovering the cause of stoppage of recording by the meter, the Asstt. Engineer (Electrical) brought it to the notice of the Electrical Engineer of the petitioner-Mill and later the reading of the meters were noted. It is also borne out from the said report of the Asstt. Electrical Engineer that specifically fuse units were screwed tight and meter started recording and on 11-4-1977 the Electrical Engineer revisited the factory to change the KWH meter and CT ratio.
11. I find from the letter dated 23-12-1977 addressed by the Asstt. Engineer (Electrical) to the Executive Engineer (Electrical) that at the time of carrying out the test-checking and breaking open the seal for the purpose of investigating into the cause of non-recording by the meter, the Electrical Engineer of the Mill was not summoned at all and his presence was secured only after the discoveryof the cause and what was done was that it was brought to the notice of the Electrical Engineer of the Mill only later. At the same time one cannot lose sight of the fact that neither there was tampering with the seal nor such a tampering is attributed to the petitioner and that at any rate that is not the cause for the non-recording of the meter. After receipt of the letter from the Asstt. Executive Engineer (Electrical), the Executive Engineer (Electrical) City Area Division, Mysore, addressed a letter to the Secretary, K.R. Mills, Mysore dated 29-6-1979 under Annexure-C. At the outset it has to be pointed out that whereas a report was submitted on 23-12-1977. by the Asstt. Executive Engineer (Electrical), a notice was served on the Secretary of the petitioner Co. nearly about 2 years later. According to this notice, during the visit of S. Vasudevan (Asstt. Executive Engineer, Electrical) to the HT installation at K.R. Mills on 9-12-1977 at about 7 p.m. for test-checking the HT meter, it was found that both HT meter and demand KVA meter were not recording. Thereupon he broke open seals and opened the door of the cubicle. There was no potential supply to the meters. He sent words to the Electrical Engineer Sri Lobo to come over who in turn informed that one Sri Wazir, Supervisor of K.R. Mills will go over to the spot. In the presence of the Supervisor Sri Wazir, Vasudevan found out the reason for non-potential supply of the meters. On checking it was found that 'no voltage' was due to slight unscrewing of the two screw type fuse units provided on the two potential circuit inside the Meter cubicle. When Sri Vasudevan in the presence of Sri Wazir properly secured the fuse units by screwing in by two or three turns, he found out that both the meters started recording correctly. From this portion of the notice addressed by the Executive Engineer to the Secretary, the petitioner-Mills, it is evident that there is a divergence quite material and relevant for the purpose of consideration by this Court between the letter addressed to the Executive Engineer (Electrical) by the Asstt. Executive Engineer and the version communicated by the Executive Engineer to the petitioner. The material discrepancy is that according to Annexure-C after breaking open the seals and opening the door of the cubicle and on discovering that there was no potential supply to the meter, Vasudevan sent words to the Electrical Engineer Lobo of the Mills who in turn informed that one Wazir will go to the spot and that in the presence of the Supervisor, Vasudevan found out the reason for non-supply of the meters. This material allegation is not to be found in the letter addressed by the Assistant Executive Engineer to the Executive Engineer (Electrical). There is material variation between the version given by the Executive Engineer to the Secretary of the petitioner-Mills. After all, the Executive Engineer has to formulate his notice based on the facts disclosed by the Assistant Executive Engineer. But unfortunately it is found that something which is not found in the original report of the Assistant Executive Engineer is added in the annexure seen under Annexure-C. As already point out, it was only the Electrical Engineer of the Mills to whose notice the discovery was brought by the Assistant Executive Engineer, as disclosed in his letter dated 23-12-1977. From the said letter it is not even possible to assume, leave alone the question of presumption, that the test-checking from the beginning to the end was carried out in the presence of any of the officials of the petitioner-Mills. The point for consideration is not whether the Court should suspect the bona fides of an official of the department but the point to be considered is whether the procedure adopted is in keeping with the requirements of fairness and reasonableness. Unless there is an agreed description of the state of affairs which forms the basis and foundation for future notice and when the entire responsibility is liable to be fastened on the petitioner, after joint inspection of the H.T. installation, it would be unreasonable to place reliance on the state of affairs disclosed even by an official of the department. It is only a joint inspection or inspection after securing the presence of the representative of the petitioner-Mills, that there could have been an agreed description of the state of affairs as well as the cause for non-recording of the meter and it is in this context that I find it difficult to lend legitimacy to the version given by the Assistant Executive Engineer at the earliest instance based on his alleged test-checking.
12. I find from the demand raised by the respondents that the demand is based on back billing for a period of 18 months whereas even in the most justifiable circumstances, the law permits only back billing for a period of six months. The back billing for a period of 18 months is clearly unsustainable in law. But the next point for consideration is whether there is justification for back billing even for a period of six months anterior to December 1977 when the test-cheek is supposed to have been carried out. The case of the respondents is that the meter was not recording as disclosed during the test-check carried out on 9-12-1977. But the question is whether during the course of six months anterior to 9-12-1977, whether the meter was not recording at all. If the meter was not recording during these six months, other things being equal, it would be justifiable to proceed to raise a bill based on the assumption that during the said period there was no recording at all and, therefore, on account of non-availability of the reading, the only possible method is to resort to what may be called as duster demand asset of consumption of energy in accordance with the procedure prescribed under the Act. I find from the statistics provided in the document furnished before me that during every month prior to December 1977, the meter has recorded the reading reflecting the actual consumption of energy and entries have been made by the meter reader regularly every month which would dispel the contention that the meter was dis functional for a period of 18 months or for a period of six months prior to 9-12-1977 which is the date of alleged test-checking. When the meter had not recorded at all for a period of six months, it may be possible to presume that a fair assessment would be the adoption of the average consumption of energy. But in the absence of such a situation, I do not think the circumstances warrant reliance on the basis of absence of recording by the meter during the months in respect of which the demand has been raised by the respondents.
13. In the ordinary course, I am of the opinion that the dispute regarding non-recording by the meter and the cause of the same should have been investigated and loss of revenue, if any, should have been ascertained by the competent authority prescribed under the law, namely, the Electrical Inspector. The proper course for the Executive Engineer (Electrical) was to resort to the procedure prescribed under sub-section (6) of Section 26 of the Indian Electricity Act, 1910 instead of unilaterally proceeding to assume what actually had happened and then proceed to raise a bill and make a demand on the petitioner for payment of the amount in question. In my opinion, the Executive Engineer (Electrical) has made short shrift of legal or statutory procedure and as such the impugned action is in contravention of subsection (6) of Section 26 of the Act.
14. On an appreciation of the cumulative effect of several discrepancies pointed out earlier and taking an overall view of the case, I am convinced that the impugned demand for payment of a sum of Rs. 21,10,457.32 ps. together with interest is unwarranted by law and, therefore, unsustainable.
15. It is brought to my notice by the learned Counsel for the petitioner that Sri Krishnarajendra Mills Limited, Mysore has already gone into liquidation and an official liquidator of the Company has already been appointed by virtue of Section 449 of the Companies Act, 1956 and that the matter for revival of the unit is pending consideration before the Appellate Authority. This would not however, come in the way of my findings.
16. For the reasons stated above, I allow this writ petition and quash both Annexures C and G. The writ petition is disposed of accordingly. In the circumstances of the case, there will be no order as to costs.
17. Petition allowed.