Judgment:
M.Y. Eqbal, J.
1. In these writ petitions filed by the petitioners against the Jharkhand Stale Electricity Board, a declaration has been sought that Clauses 8 and 9 read with Clause 4 of the Standard Form or High Tension agreement (H.T. agreement) are unconstitutional and violative of Articles 14, 19(1)(g), 21, 298 and 300A of the Constitutional of India and Section 23 of the Indian Contract Act, 1872 as the same are unjust, unfair, unreasonable and against the public interest and further for quashing the Final Demand Bill dated 05.02.2008 and 18.2.2008 raised by the respondent-Board levying a sum of Rs. 6,50,000/- and Rs. 4,90,000/- respectively being the amount of monthly minimum guarantee for a period of 22 months.
2. The facts of the case lie in a narrow compass:
The petitioners are the manufacturers and dealers of automobile components and passenger cars of Tata Motors having their workshops situated in Adityapur industrial Area in the district of East Singhbhum. The petitioners, for the purpose of their workshops, submitted a requisition in the prescribed form before Jharkhand State Electricity Board (in short 'the Board') for supply of electric energy of 165 KVA and 100 K.V.A respondent No. 4, the Electrical Superintending Engineer, agreement/contract was centered into between the petitioners and the Board on 11.10.2006 for supply of 105 KVA and 100 K.V.A. Petitioners' case is that at the time of entering into the agreement, the respondent-Board duly assured the petitioners that the Board will furnish uninterrupted supply of electrical energy but, in fact, there has been so many interruptions of electrical supply, load shedding, sub-standard quality of electrical supply and that too without notice to the petitioners resulting into heavy loss and damage to the petitioners because of sudden halt of working in the workshops. Petitioners' further case is that because of aforesaid reasons the petitioners were forced to take shelter of the D.G. Set in order to generate electricity in their workshops. Due to the aforesaid non-supply and also supply of sub-standard electricity, the petitioners alleged to have incurred heavy loss and ultimately the petitioners switched over and started taking supply of electrical energy from another distribution licensee i.e. JUSCO. The petitioners ultimately wrote a letter dated 24.12.2007 and 14.122007 respectively to respondent No. 4 requesting him to disconnect power supply to the units of the petitioners. Respondent No. 5 then directed the petitioners to deposit a sum of Rs. 6.5 lacs and 4,90,000/- respectively, being monthly minimum guarantee for future period of 22 months i.e. from February, 2008 to November, 2009. The petitioners deposited the said amount under protest in order to get their line disconnected and to get a new connection from another distribution licensee, i.e. JUSCO. Thereafter the Board raised final demand against the petitioners after deducting the aforesaid amount which came to Rs. 3,02,218/- and Rs. 18,264/- respectively which were also paid by the petitioners vide cheques dated 13.1.2008 and 20.2.2008 respectively. The petitioners, therefore, challenged the demand of the Board for payment of minimum guarantee charges for the rest of the period of agreement as being violative of the provisions of the Constitution of India and the Contract Act.
3. The respondent-Board, in the counter-affidavit, has denied and disputed the allegation that there had been frequent power tripping. The duration of the tripping shown by the petitioners in Annexure 3 (D.G. Set details) has no sanctity. According to the respondents, there was supply of electricity for more than 20 hours during the day to the petitioners and therefore, it cannot be said that the Board has made non-supply/short-supply of electricity to the petitioners. Respondents' further case is that as per Clause 8 of the H.T. agreement and also Clause 7.5 of the Electricity Supply Code Regulation, 2005 framed under the Electricity Act, 2003, a consumer can terminate agreement only after expiry of the initial period of agreement by giving 30 days notice to the distribution licensee. In the event agreement is terminated before the expiry of the initials period of agreement, the consumer shall be liable to pay charges as per tariff for the balance period of initial period of agreement. Respondents' further case is that no consumer is allowed to terminate the agreement for the reason that if the licensee enters into an agreement with a consumer for specific quantum of electricity, then the licensee, in its turn, enters into a separate agreement with the power transmission Companies for making available the required quantum of electricity to its consumer. Lastly it is stated that the Regulation having been framed under the power conferred to it by the Electricity Act, is statutory in nature and thus both the licensee and the consumer are bound by the same.
4. Before appreciating the cases of the parties, I would first like to quote Clauses 8 and 9 of the H.T. agreement entered into between the petitioners and the consumer which read as under:
Clause 8: The agreement shall be ordinarily in force for a period of less than three years in the first instance (expect in exceptional cases in which written consent of the Board will be taken) from the date of commencement of supply i.e. 15.11.2006 and thereafter shall continue from year to year until the agreement is determined as hereinafter provided.
Note: In case where the date of commencement of supply is a date subsequent to that of the execution of this agreement, the Board is given power to fill in the date in the blank space provided for the same in this clause with prior intimation to the consumer. The consumer can produce his copy of the agreement to have such date filled in by the Board.
Clause 9(a). The consumer shall not be at liberty to determine this agreement before the expiration of three years from the date of commencement of the supply of energy. The consumer may determine this agreement with effect from any date after the said period on giving to the Board not less than twelve calendar months' previous notice in writing in that behalf and upon the expiration of the period of such notice this agreement shall cease determine without prejudice to any right which may then have accrued to the Board hereunder provided always that the consumer may at any time with the previous consent of the Board transfer assign this agreement to any other person and upon subscription of such transfer. This agreement shall be binding on the transferee and Board and take effect in all respects as if the transferee had originally been a party hereto in place of the consumer who shall henceforth be discharged from all liabilities under or in respect thereof.
(b) In case the consumer's supply is disconnected by the Board in exercise of its powers under this agreement and/or law and the consumer does not supply as started above or the period of noticed whichever be longer, he will be deemed to have given a notice on the date of the disconnection in terms of aforesaid Clause 9(a) for the determination of the agreement and on expiration of the above said reminder period of compulsorily availing of supply or the period of notice whichever is longer, this agreement shall cease and determine in the same way as above.
5. The Jharkhand State Electricity Regulatory Commission, in exercise of its power conferred by Section 181 read with Section 50 of the Electricity Act, 2003, darned regulation called 'Jharkhand State Electricity Regulatory Commission' (Electricity Supply Code), Regulation, 2005. Clause 7.5 of the said Regulation reads as:
7.5: A Consumer may terminate the agreement after expiry of the initial period of agreement after giving 30 days notice to the distribution licensee. However if the agreement is to be terminated before expiry of the initial period of agreement, the consumer shall be liable to pay charges as per tariff for the balance period of the initial period of agreement.
Provided that when ever an agreement is terminated on notice given by the consumer the distribution licensee shall give a written intimation within 15 days after termination failing which such intimation shall be deemed to have been given to the consumer.
Provided further that if the service of the consumer remains continuously disconnected for 180 days not being a temporary disconnection upon request of the consumer the agreement shall be deemed to be terminated on the expiry of 180 days or after expiry of the initial period of agreement which ever is later without prejudiced to the rights of the distribution licensee or of the consumer under the Act for recovery of any amount due under the agreement.
6. The only question that falls for consideration is as to whether Clauses 8 and 9 of the H.T. Agreement entered into by and between the petitioners and the respondent-Board are unconstitutional and unsustainable under Section 23 of the Indian Contract Act on the ground that the said clauses are unjust, unfair, unreasonable and against the public policy
7. Admittedly, with full knowledge and consciousness, the petitioners entered into the H.T. Agreement with the respondent-Board for supply of electricity and put their signature in the standard form of agreement which has existed for several decades after the enactment of the Electricity (Supply) Act, 1948 and the Electricity Rules, 1946. On the basis of the said H.T. agreement, the petitioners started consuming electricity, but all of a sudden, by letters dated 24.12.2007 and 14.12.2007 sought to terminate the said H.T. agreement which was for a period of three years on the ground that there has been continuous interruption in the supply of electricity.
8. The question which has been raised by the petitioners in these writ petitions has been fully discussed and answered by the Supreme Court in the case of Bihar State Electricity Board, Patna and Ors. v. Green Rubber Industries and Ors. : [1989]2SCR275 . In that case, similar agreement was entered into between M/s. Green Rubber Industries and the Bihar State Electricity Board for the supply of electricity of 60 KVA. During the subsistence of the agreement, the firm requested the Board to cut off the connection. The firm received the bill for minimum guarantee charges for the period while no electricity was allegedly consumed by the firm. A demand notice was served for the minimum guarantee charges which was disputed. The contention of the Board was that the firm was liable to pay minimum guarantee charges in terms of the agreement. The matter ultimately came to the Supreme Court. Answering the question in favour of the Board, the Supreme Court observed:
23. It is true that the agreement is in a standard form of contract. The standard clauses of this contract have been settled over the years and have been widely adopted because experience shows that they facilitate the supply of electric energy. Lord Diplock has observed: 'If fairness or reasonableness were relevant to their enforceability the fact that they are widely used by parties whose bargaining power is fairly matched would raise a strong presumption that their terms are fair and reasonable.' Schroeder (A.) Music Publishing Co. Ltd. v. Macaulay. In such contracts a standard form enables the supplier to say: 'If you want these goods or services at all, these are the only terms on which they are available. Take it or leave it.' It is a type of contract on which the conditions are fixed by one of the parties in advance and are open to acceptance by anyone. The contract, which frequently contains many conditions is presented for acceptance and is not open to discussion. It is settled law that a person who signs a document which contains contractual terms is normally bound by them even though he has not read them, even though he is ignorant of the precise legal effect. In view of Clause 4 having formed one of the stipulations in the contract along with others it cannot be said to be nudum pactum and the maxim nudum pactum ex quo non oritur actio does not apply. Considered by the test of reasonableness it cannot be said to be unreasonable inasmuch as the supply of electricity to a consumer involves incurring of overhead installation expenses by the Board which do not vary with the quantity of electricity consumed and the installation has to be continued irrespective of whether the energy is consumed or not until the agreement comes to an end. Every contract is to be considered with reference to its object and the whole of its terms and accordingly the whole context must be considered in endeavouring to collect the intention of the parties, even though the immediate object of enquiry is the meaning of an isolated clause. This agreement with the stipulation of minimum guaranteed charges cannot be held to be ultra vires on the ground that it is incompatible with the statutory duty. Differences between this contractual element and the statutory duty have to be observed. A supply agreement to a consumer makes his relation with the Board mainly contractual, where the basis of supply is held to be statutory rather than contractual. In cases where such agreements are made the terms are supposed to have been negotiated between the consumer and the Board, and unless specifically assigned, the agreement normally would haw affected the consumer with whom it is made, as was held in Northern Ontario Power Co. Ltd. v. La Roche Mines Ltd.
9. In another decision in the case of General manager-cum-Chief Engineer, Bihar State Electricity Board and Ors. v. Rajeshwar Singh and Ors. : AIR1990SC706 the Supreme Court following the aforesaid decision held as under:
5. The first question, therefore, is whether the firm was liable to pay the minimum guaranteed charges for the period during which the supply remained disconnected. In Civil Appeal No. 220 of 1987 we have held that the firm would be liable to pay the minimum guaranteed charges unless it could be shown that the contract itself was terminated. The mere disconnection of the electricity supply would not amount to termination. If there was no application for restoration within 7 days of disconnection that would be deemed to be a notice for termination and the contract would be terminated either at the end of this period of notice or the tenure of the agreement whichever was longer. In the instant case the fresh agreement was entered into on May 30, 1977 and connection was restored on June 15, 1977. Earlier the connection given on execution of the agreement was on August 12, 1974 and supply was disconnected on October 16, 1975. The earlier agreement must be deemed to have come to an end on execution of the fresh agreement and restoration of connection if it did not terminate earlier under the terms of the agreement. The firm's liability, has therefore to be determined on that basis in view of what has just been held in the judgment in Bihar SEB v. Green Rubber Industries.
10. So far the allegation of non-supply/interrupted supply of electricity is concerned, from perusal of the D.G. Set details (annexures-3 & 6), even assuming to be correct, it appears that there has been constant supply of electricity for more than 20 hours every day and it cannot be held that the Board has failed to supply electricity as per the contract demand. On the contrary, petitioners entered into an agreement with another licensee for the supply of electricity for the reasons best known to the petitioners and thereafter, requested for disconnection of supply of electricity from the respondents Board.
11. Having regard to the entire facts and circumstances of the case and the law settled by the Supreme Court in the decisions quoted herein before, we do not find any merit in these writ petitions which are, accordingly, dismissed.