Annamalai Cotton Mills (P) Ltd. Vs. the Chairman, Tamilnadu Electricity Board, Anna Salai, Madras-600 002 and Others - Court Judgment

Excerpt:
electricity - notice - articles 14, 21 and 226 of constitution of india - where authority makes order in exercise of quasi judicial function it must record its reason in support of order it makes - every quasi judicial order must be supported by reasons - in present case respondent who passed impugned order has not recorded his reasons in support of order - impugned order passed in violation of principles of natural justice - notice quashed for reason of vagueness. - - 5. on receipt of such notice, a reply was sent by the petitioner on 21-5-1995 itself and in that reply, the petitioner had clearly denied the allegation of theft of energy and the statement that there was a due inspection at 4.00 a. it was further stated therein that failure to pay such sum on or before 9-6-1995 would.....order1. this writ petition coming on for hearing on wednesday, the 6th, thursday, the 7th and friday, the 9th day of december, 1995 upon perusing the petition and the affidavit filed in support thereof the order of the high court, dated 10-10-95 and made herein and the counter and reply affidavits filed herein and the records relevant to the prayer aforesaid and comprised in the return of the respondents herein to the writ made by the high court, and upon hearing the arguments of mr. k. ravi, advocate for the petitioner, and of mr. r. krishnamoorthy, senior counsel assisted by mr. s. rajeswaran, advocate for the respondents, and having stood over for consideration till this day, the court made the following order:--the prayer in the writ petition is to issue a writ of declaration the.....

Judgment:
ORDER

1. This writ petition coming on for hearing on Wednesday, the 6th, Thursday, the 7th and Friday, the 9th day of December, 1995 upon perusing the petition and the affidavit filed in support thereof the order of the High Court, dated 10-10-95 and made herein and the counter and reply affidavits filed herein and the records relevant to the prayer aforesaid and comprised in the return of the respondents herein to the writ made by the High Court, and upon hearing the arguments of Mr. K. Ravi, Advocate for the petitioner, and of Mr. R. Krishnamoorthy, Senior Counsel assisted by Mr. S. Rajeswaran, Advocate for the respondents, and having stood over for consideration till this day, the Court made the following order:--

The prayer in the writ petition is to issue a writ of declaration the entire paragraph 9.00 and paragraphs 11 and 12 of Schedule Part I of the Schedule to the Revised Terms and Conditions of Supply of Electricity formulated by the 1st respondent in B.P.Ms. (FB) No. 61 dated 24-12-1988 and Appendix VI and VII thereto insofar as they relate to the theft of energy, as they stand how are ultra vires the powers of the 1st respondent and violative of Article 14 of the Constitution of India, and hence are void, illegal and invalid insofar as the petitioner is concerned.

2. The petitioner is a private limited company owning a spinning mill in the outskirts of Salem. The 1st respondent/ Board is a statutory body constituted under Section 5 of the Electricity (Supply) Act, 1948. The respondents have been supplying High Tension Electrical Energy to the Mill right from the establishment of the mill. The petitioner signed the necessary agreements, the last of such agreement is dated 16-4-1992. The mill was originally sanctioned 1250 KVA load by the Board. Subsequently, on 12-11-1990, the load was increased to 1750 KVA. The serviceconnection given to the petitioner is referred to as HT SC. No. 30, High Tension Tariff I, Dasannaickenpatti Operation and Maintenance Section. The tariff rate presently applicable to the petitioner is Rs. 2.20 per unit.

3. On 11-5-1995, certain officers of the Board came to the mill along with local police and seized the meter installed in the mill to record consumption of electrical energy. According to the petitioner, the local police had registered a First Information Report against the Managing Director, Co-Managing Director, Mill Manager and the Mill Electrician under Sections 39(1) and 44(1) of the Indian Electricity Act charging them with the offence of theft of energy. The Mill Manager and the Electrician were taken into custody by the police. According to the petitioner, they were forced to write and sign certain letters and statements containing false particulars. Subsequently, the petitioner through their advocate issued a notice of retraction of those statements. Both the Managing Directors filed Crl. O.P. No. 3529 of 1955 in this Court for anticipatory bail and this Court granted anticipatory bail on certain conditions. This Court directed each of them to furnish personal bonds for Rs. 1 lakh and also furnish two sureties for Rs. I lakh each. Besides, they were asked to furnish a bank guarantee for rupees one crore in favour of the 3rd respondent herein, which they furnished.

4. The 2nd respondent issued a show cause notice dated 17-5-1955 to the petitioner, By such notice, the petitioner was informed that theft of energy in the petitioner's service connection had been 'reported'. In that nothing was stated as to who made such report and on what basis such report was made. It did not state what was found in the meter or connections which led to suspicion that there might have been theft of energy. The alleged report or a copy thereof was not served on the petitioner, and upon such a vague and general allegation that theft of energy was reported, the petitioner was asked to show cause within seven days as to why extra levy should not be collected from the petitioner in accordance with the terms and conditions of supply of electricity.

5. On receipt of such notice, a reply was sent by the petitioner on 21-5-1995 itself and in that reply, the petitioner had clearly denied the allegation of theft of energy and the statement that there was a due inspection at 4.00 a.m. on 11-5-1995 as stated in the show cause notice. The petitioner has raised the following contentions in its reply. Under clause 10 of the contract of supply dated 16-4-1992 between the petitioner and the Board, such levy can be made only after it is found that the consumer was indulging in theft of energy or malpractice in respect of use of energy and such a finding can be arrived at only after due enquiry. Inasmuch as a criminal complaint on the same charge is pending investigation by the local police, the show cause notice itself is premature. Only the Board, as constituted under Section 5 of the Electricity (Supply) Act, 1948, is empowered to invoke Clause 10 of the Contract cited above, which power cannot be delegated to any other officer. Penalty for theft of energy, apart from imprisonment and fine, is fully provided for under Section 44 of the Indian Electricity Act, which would be just Rs. 5,000/- and Rs. 50/- for every day of continuance of such offence, independent of which provision, no penalty could be levied, but only compensation for the energy actually stolen may be claimed as stated in Section 48 of the Indian Electricity Act, which would be subject, in law, to Section 74 of the Indian Contract Act. The action proposed was motivated, vindictive and mala fide.

6. The petitioner, after making such contentions as above, had prayed in its reply that a personal hearing may be accorded to the petitioner before any further order was passed in this matter. The 3rd respondent immediately after receiving such reply, without conducting any enquiry whatsoever and without granting personal hearing to the petitioner, on 26-5-1995 itself passed a non-speaking order merely saying that on examination of the petitioner's reply with reference to the information available, it was found that in the petitioner's service condition, theft of energy had been committed. No reason was adduced to support that so-called finding. The said order further makes an extra levy forthe energy allegedly stolen at Rupees 9,43,00,000/- and odd. It was further stated therein that failure to pay such sum on or before 9-6-1995 would result in disconnection of electricity supply to the mill and that an appeal might be preferred against the said order within sixty days of the receipt of such order, after paying the extra levy. A working sheet for arriving at such levy was annexed to the order.

7. On 29-5-1995, the petitioner filed O.P. No. 7556 of 1995 in this Court to quash the said order on several grounds, especially on the ground that the said order was passed in flagrant violation of all principles of natural justice, arbitrarily and without disclosing any reason whatsoever. Simultaneously, the petitioner also filed a civil suit in O.S. No. 160 of 1995 on the file of the Vacation Judge, Salem, without being aware of the legal position that courts do not generally permit a person to pursue parallel legal remedies against the same order. On 21-7-1995, this Court dismissed W.P. No. 7556 of 1995 on the sole ground of pendency of civil suit without going into or dealing with any of the legal contentions raised in the writ petition. The petitioner thereupon withdrew the said suit itself after obtaining permission of the Division Bench of this Court in the Letters Patent Appeal filed against the order in C.M.A. No. 633 of 1995. The Division Bench dismissed the civil suit O.S. No. 160 of 1995 as withdrawn and expressly leaving open all contentions raised therein. W.A. No. 833 of 1995 filed against W.P. No. 7556 of 1995 was also permitted to be withdrawn leaving open all contentions of the parties. Both these orders were made on 7-9-1995.

8. According to the petitioner, on 7-8-1995 itself, the Board disconnected the supply of electricity to the mill. Hence, the petitioner filed W.P. Nos. 11039 to 11042 of 1995 for various reliefs. W.P. Nos. 11039, 11040 and 11042 of 1995 were taken up for hearing by Jayasimha Babu, J. It was pointed out before the learned Judge that the impugned order being an appealable order, the petitioner should first avail that remedy. The learned Counsel for the petitioner submitted, that thepetitioner would adopt that course and file an appeal. After considering all the aspects of the matter, the learned Judge was of the view that the interest of both parties will be equitable secured if the petitioner was directed to deposit with the Board a sum of rupees two crores, in addition keeping in force the guarantee for the sum of rupees one crore already furnished pursuant to the order made in the proceedings relating to the grant of anticipatory bail, and that the guarantee so given shall be kept in force till the disposal of the appeal to be filed by the petitioner before the Board, even if the criminal proceedings were come to an end prior to such date.

9. While disposing of those writ petitions, Jayasimha Babu, J., has directed the petitioner to deposit the sum of rupees two crores with the Board in the following manner:

a) Rs. 10 lakhs to be deposited with the respondent-Board within a period of two weeks from today;

b) a sum of Rs. 100 lakhs to be deposited with the respondent-Board within a period of three months from today;

c) Rs. 90 lakhs to be deposited with the respondent-Board within a period of five months from today.

The learned Judge further directed that on the petitioner complying with the directions given above, the Board shall resume supply of energy and maintain the supply subject to the petitioner paying the monthly bills and complying with all other conditions of the agreement entered with the Board and also complying with the applicable statutes, rules and regulations. The learned Judge directed the Board to resume supply after the deposit of Rs. 10 lakhs is made by the petitioner and that the Board shall continue to provide such supply only if the petitioner complied with the condition regarding the deposit of Rs. 100 lakhs and Rs. 90 lakhs respectively as per paragraph 10(b) and (c) of the order, and if the petitioner commits default in making any payment, it is open to the Board to disconnect the supply. Regarding the filing of an appeal against the impugned order before the appellate authority, the learned Judge granted twoweeks' time from the date of the order and that all the contentions sought to be urged before this Court are left open to be urged before the appellate authority. A further direction was given to retain the appeal on the file of the appellate authority till such time the sum of rupees two crores, as directed above, was deposited by the petitioner and after the deposit is made, the Board shall consider the appeal on merits and dispose of the same by a leasoned order as expeditiously as possible. The learned Judge further directed the appellate authority to afford personal hearing to the petitioner. In paragraph 14 of the order, the learned Judge placed on record the submission of the learned Senior Counsel for the petitioner (Mr. G. Subramaniam) that the petitioner will abide by the terms of the order and that the Board shall act in accordance with the terms contained in that order. By the above order, all the three writ petitions were disposed of by the learned Judge.

10. According to the petitioner, there is no finding in force as on the date of the writ petition by any competent court of law on any of the issues raised in the writ petition as would bind the petitioner. According to the learned Counsel for the petitioner, all questions agitated earlier in the civil suit and in the writ petition have been expressly left open by the orders passed by the Division Bench of this Court on 7-8-1995 in L.P.A. No, 198 of 1995 and W.A. No. 833 of 1995. Since the earlier writ petition was dismissed by this Court in limine on the sole ground of pendency of a civil suit on the same subject matter and since this Court did not go into any of the questions raised in the said writ petition, it is submitted that the dismissal of the earlier writ petition will not bar the present writ petition, The petitioner submitted that the impugned order passed by the 3rd respondent is ex facie illegal and a nullity in the eye of law and hence liable to be quashed on the following grounds:

11. (a) Violation of natural justice : The impugned order is in total violation of all principles of natural justice. Mr. K. Ravi, learned Counsel for the petitioner, at the time of hearing, invited my attention to an orderpassed in W.P. No. 125 of 1990 when another officer of the Board passed in respect of another consumer an identically worded order under identical circumstances and based on an identically worded show cause notice as in the present case. This Court ruled that such a show cause notice and the order is violative of natural justice and quashed the same. That judgment became final and it was subsequently followed by this Court in 1994, Writ Law Reporter, 197. As such, the present case is squarely covered by these two decisions of this Court,

12. It is also urged by the learned Counsel for the petitioner that passing a non-speaking order like the present one has been condemned by the Supreme Court and in such cases, the non-speaking orders were quashed on the sole ground that they are being non-speaking orders, A few decisions were cited on this contention. A Division Bench decision of this Court in Rathinaamal v. The Superintending Engineer ILR 1995 (2) Mad 161 was cited to show that non-granting a personal hearing would vitiate the proceedings.

13. (b) Violation of Article 14 of the Constitution: The present order being a non-speaking order is liable to be quashed on the authority of the decision reported in Prestoliti (India) Ltd. v. Regional Director, : (1995)IILLJ622SC . Such arbitrariness is manifest from the arbitrary method in which the penalty has been calculated. The quantum of energy stolen was assumed to be the entire maximum sanctioned load for one year. The arbitrariness is quite explicit on the face of the order.

14. (c) Absence of jurisdiction : The next contention of Mr. K. Ravi is that the impugned order is vitiated by total lack of jurisdiction. No provision under any statutory enactment, rule or regulations empowers levy of such penalty for theft of energy, The provision relied on by the Board is Section 49 of the Electricity (Supply) Act. The said provision only grants permission to the Board to supply electricity to non-licensees on any terms and conditions that the Board may choose to fix for such supply. Such apermission may not be construed as a very wide permission to allow the Board to fix unreasonable, arbitrary and illegal conditions for supply. Pursuant to such permission only the Board resolved in Us meetings from time to time to adopt certain specified terms and conditions for supply of electricity to non-licensees. Pursuant to such permission, the Board formulated certain standard format contracts and obtained the petitioner's signature thereon from time to time. In such contract, clause 3 states that the petitioner undertook to comply with all the requirements of the Indian Electricity Act, the Supply Act, etc., and the terms and conditions of supply prescribed by the Board from time to time.

15. Mr. K. Ravi, learned Counsel for the.petitioner would submit that under the guise of the permission granted by Section 49 of theElectricity (Supply) Act, the Board has passed resolutions in 1988 approving certain conditions called the terms and conditions of supply of electricity. In the schedule to it, the Board has incorporated provisions assuming the power of levying penalty in the arbitrary manner indicated above and has further. delegated this power to the 3rd respondent/ Superintending Engineer. Further to this, some lime after 1992, it seems the Board had added a sentence to paragraph 9.04 of such schedule indicating that from an order of levy, an appeal would lie to the 4th respondent/ Chief Engineer (Distribution). According to the learned Counsel for the petitioner, the assumption of such adjudicatory and appellate power cannot be justified- under Section 49 of the Electricity (Supply) Act. In view of the exhaustive penal provisions in Sections 39 to 49 of the Indian Electricity Act and In view of the express provision under Sec. 48 thereon, saving the right to colled compensation for theft of energy, the respondents cannot usurp to themselves any power to levy further penalties for theft of energy without A specific provision in law empowering such levy, and that Section 49 of the Electricity (Supply) Act is not such a specific provision. As such, Mr. K. Ravi would urge, the entire paragraph 9.04 comprising of sub-paragraphs 9.01 to 9.05 and paragraphs 11 and 12insofar as they relate to theft of energy in Part I of the Schedule to the terms and conditions of supply of electricity, said tohave been formulated by the Board in its B.P.Ms. (FB) No. 61 dated 24-12-1988 as they stand now and Appendix VI and VII thereto are ultra vires the powers of the Board and also violative of Article 14 of the Constitution, being arbitrary, illegal and unreasonable and hence are liable to be set aside as void and illegal.

16. (d) Illegality of Disconnection :

Mr. K. Ravi, learned Counsel for the petitioner would next contend that the show cause notice did not state that the nonpayment of the levy would entail disconnection of service connection. It only asked the petitioner to show cause as to why extra levy should not be collected from the petitioner, and it did not ask the petitioner to show cause why supply of electricity should not be disconnected in addition to such levy as contemplated in Clause 10 of the contract Independent of Clause 10 of the contract, there is no provision in the so-called terms and conditions of supply envisaging disconnection of supply for non-payment of the extra levy for theft of energy. The terms and conditions (paragraph 10.00) contemplate such disconnection for three months if such theft is committed for the second time within five years, and for one year if committed for the third time within such five years. For the first instance of theft, disconnection has not. been explicitly provided for as a measure Of punishment. Even under Clause 10 of the contact, the additional punishment by way of disconnection can be only for a fixed period as may be decided by the Board, which is subject to paragraph 10 of the terms and conditions. As such, the disconnection of electricity supply effected by the respondents on 7-8-1995 at 5.30 p.m. was totally without jurisdiction and ex facie illegal.

17. The 2nd respondent filed a detailed common counter-affidavit. According to him, based on the intention of the Executive Engineer of the Special Squad called Anti-Power Theft Squad (APTS), Salem, the Asst. Executive Engineer, Operation and Main-tenance, Gugai, Salem, along with other Officials, entered the petitioner's mill surprisingly at 4.00 a.m. on 11-5-1995, Proper intimation of intention to inspect the premises of the petitioner mill was given by the Asst.. Executive Engineer, Operation and Maintenance, Gugai, Salem, to the Factory Manager P. Balraj. The Manager has signed the intimation notice also. Both the Factory Manager and the Electrician were present throughout the inspection and at the time of inspection, all the electrical motors and machineries of the mill were functioning with the electrical supply of the Board. The generators available in the mill were not functioning. It was further noticed that in the trivector meter installed to measure the consumption of electricity by the mill, both the discs were found not rotating. In the normal circumstances, when the supply of electricity is being consumed by the consumer and motors and the machineries were running, the said discs in the trivector meter should be rotating to enable the recording of the consumption. But, in this case, it was otherwise.

18. The 2nd respondent would further urge that on further investigation it was found that there were two number of copper hook wires of 3/4 feet length placed between the in-coming or out-going terminals of the H.T. Voltage metering set of the Board. By this arrangement of fixing the artificial means, the metering set was by-passed and the consumption of the electricity was not recorded, and that electrical energy was consumed by the petitioner directly and was not allowed to be recorded by the trivector meter. The Electrician of the petitioner mill Mr. K. Muthurami gave a statement that the two copper hooks wires were fixed by him purposely to by-pass the metering set to thieve the electrical energy. The Factory Manager Mr. P. Balaraj has given a statement that he was present during the inspection and he admitted in his statement that though the mill was running with electrical supply, the meter was not recording the same due to the by-pass arrangement done by them.

19. After completing the inspection, amahazar was prepared at the site wherein the observations were recorded. Both the Electrician and the Manager who were present throughout the inspection and witnessed all the details had also signed the mahazar and received a copy of the same. Thereafter, a complaint was prepared and lodged with the Sub-Inspector of Police, Mellur, by the Asst. Executive Engineer, Operation and Maintenance, Gugai, Salem; at 9.30 a.m. on 11-5-1995. The F.I.R. was prepared by the police for offences under Ss. 39(1) and 44(1)(c) of the Indian Electricity (Tamil Nadu Amendment) Act, 1980, for the offence of theft of electricity. Thereafter, the Sub-inspector of Police along with his men together with the Village Administrative Officer of Nilivarpatti, and the Photographer visited the petitioner mill and had althrough inspection of the theft committed by the petitioner mill. It is relevant to add that the Asst. Executive Engineer, M.R.T., who was available along with the Officials of the Board, demonstrated the modus operandi of the offence of theft committed by the mill to the police and the Village Administrative Officer. The Photographer was directed to take photographs of the by-passing arrangements by which theft was committed. After completion of the formalities, the police arrested the Electrician and the Manager and seized the material evidence viz., metering set, the trivector meter, two copper hooks, wooden reaper about 90 cm. length, a ladder about 10 1/2 feet length and accessories used for the said offence. The mahazar was witnessed by the Village Administrative Officer.

20. According to the 2nd respondent, it is therefore clear from the above, that the Department had inspected the petitioner mill with Anti-Power Theft Squad Officials and detected theft committed by the petitioner. No one was forced to write or sign as alleged. In fact, the representatives of the petitioner mill viz., the Manager and the Electrician were present throughout the inspection and they have received the mahazar copies after signing the same. It is also relevant to add that under the normal circumstances, it would not have been possible for the Board Officials to have inspection of the petitioner mill. It ishaving a big gate with watch and ward and no one can enter without permission. The same is applicable to the Department Officers also. Further, the transformer is placed within the petitioner's premises and that the departmental Officers can have an inspection of the same only after getting the prior permission of the petitioner. The visit of the department Officers caution the petitioner to remove the by-pass arrangement. Technically, the bypassing arrangement adopted by the petitioner is very simple and by this, small two wires can be inserted and taken away in no time. Therefore, the petitioner was having the artificial means and dishonestly abstracting electricity without any difficulty, Because of this circumstance only the surprise squad and the departmental Officers had to go to the petitioner-mill in the early morning to have a surprise inspection.

21. The respondents would further aver in the counter-affidavit that moreover the petitioner-mill runs for 24 hours (three shifts) with a sanctioned demand of 1750 KVA with huge number of meters and machineries. The petitioner-mill is getting supply from the 230KV Sub Station at Nethimedu Salem, through 22 KV Gajalanaickenpatty Feeder. This feeder supplies three phase 22 KV supply in all 24 hours except during the pre-arranged mairtenance, shut-downs and unexpected break-down due to line faults. Therefore, the petitioner-mill is having regular supply. For one year, the units that would normally be consumed by the petitioner around should be 1,13,40,000 and in terms of charge, he would have to pay about Rs. 3 crores. But, the petitioner-mill has consumed in the last 12 months preceding 11-5-1995, i.e., the date of inspection, only 31,66,300 units and paid charges of about Rs. 70 lakhs towards energy consumed. This is possible only by artificial means and not otherwise. Therefore it is a clear case of violation of the terms and conditions of supply.

22. Section 49 of the Electricity Supply Act empowers the Board to notify the terms and conditions upon which it will supply electricity to a consumer. The petitioner being a consumer, entered into an agreement withthe Board for the power supply and till the impugned action was taken against them for the offence of theft by dishonest abstraction of electrical energy, the petitioner had no complaint or grievance against the Board. It is only when steps are being taken to put an end to their illegal abstraction of energy, the petitioner has come out with all sorts of allegations to escape the liability, which, as per law, they are entitled to compensate. The contention of the petitioner that the terms and conditions of supply have no statutory force is devoid of merits and it is opposed to the well established principle that they are statutory. As stated earlier, electricity being a scarce commodity, it is essential to community at large in all respects, A person found to be prima facie guilty of an offence cannot be permitted to enjoy the benefit of having the supply of further energy until he is cleared of the charge. The formulae contained in paragraph 9.02 and 9.03 is not arbitrary and in fact very rationale,

23. As far as Appendix VI and VII prescribing the form of the show cause notice is concerned, it is to be understood in the context of the offence. Appendix VII is a part of the terms and conditions of supply. Though the service connection was liable for disconnection on detection of theft of energy, the Board without resorting to disconnection, sent the impugned order after due summary enquiry. On assessment of the compensation amount, the service connection was not disconnected. It is submitted that the procedure for extra levy is included to serve as a deterant on the consumer in discharging their obligation towards the Board. Therefore, the formulae contained in paragraph 9.02 and 9.03 is not arbitrary and in fact only rationale.

24. The petitioner filed a reply affidavit denying the allegations and averments contained in the counter and additional counter-affidavits. He has also filed an additional affidavit stating that the entire para9.00 and such portions in paragraphs 11 and 12 relating to theft of energy in Part I of the Schedule to the terms and conditions of supply of electricity formulated by the Board, are ultra vires the powers of the Board andviolative of Article 14 of the Constitution of India. Very many grounds have been raised in the additional affidavit to support the above contentions.

25. I have given my anxious consideration to the arguments of Mr. K.. Ravi, learned counsel for the petitioner and Mr. R. Krishna-murthi, learned Senior Counsel for the respondents,

26. As already seen, the writ petition has been filed for a writ of declaration to declare certain portions of the terms and conditions of supply of electricity as ultra vires the powers of the Board and violative of Article 14 of the Constitution of India. The terms and conditions of supply of electricity of the Tamil Nadu Electricity Board were first notified in Board's proceedings Ms, No. 780 dated 21-6-1977. Since then, a number of amendments to the terms and conditions have been issued, mainly with a view to improving the service to consumers. In 1987, the terms and conditions of supply have been completely recast. As already seen, the petitioner has challenged the following paragraphs viz., paragraph 9 and portions of paragraphs 11 and 12 relating to theft of energy in Part I of the Schedule to the terms and conditions of supply dated 24-12-1988 as ultra vires the powers of the Board.

27. Paragraph 9 of the terms and conitions of supply reads as follows:--

'9.00 Theft of energy and extra levy 9.01. Any consumer who dishonestly abstracts or uses energy shall be deemed to have committed theft within the meaning of Indian Electricity Act, 1910, as amended by the Tamil Nadu Government and the Indian Penal Code and the existence of artificial means for such obstruction shall be prima facie evidence of such dishonest abstraction. Illegal restoration of supply to one's disconnected service connection will fall under this category.

9.02 Extra levy for theft of energy will be made for a period of 12 months or from the date of service connection to the date of detection, whichever period is less, at the rates given below:--

1) For energy:

a) Low Tension service connections :--Highest Low Tension tariff rate x 3 the charge arrived at will be rounded off to the next higher rupee.

b) High Tension service connections: Highest High Tension Tariff rate x 4 The Charge arrived at will be founded of to the next higher rupee.

ii) For maximum demand : (in High Tension service connections) Highest High Tension tariff rate for maximum demand x 4.

9.03 The extra levy will be assessed as follows. Low Tension service connections :

The quantity of units consumed shall be worked out by means of the following formula, adopting the figures furnished in the Tables A and B given below :

FORMULA

Units Connected load found at the

Consumed = time of inspection divided byDiversity Factor x LoadFactor x number of hours perday x duration in days (videclause 9.02).

Table - A

CategoryDiversity FactorLoad FactorNo. of hours per day

a)Domestic2.040%12b)Non-domestic and Commercial1.190%12c)Industrial including cottage industries1.080%as per details in the table B below.d)Public Lighting1.00100%8e)Agricultural1.080%10f)Hut2.040%12

Table - B

CategoryNo. of Hours per day

I.Fed by High Tension rural feeders having only 14 hours of supply per day

i)Day shift only6 ii)Night shift only8 iii)both Day and NigH shifts14II.Fed by High Tensions Feeders having 24 hours of supply :

i)Day shift only8 ii)2 shifts16 iii)3 shifts34High tension service connections :

1) Demand charges: for the purpose of assessment of maximum demand for the month, the sanctioned demand of the consumer will be taken as the maximum demand.

ii) Energy charges : Quantity of electricity consumed will be worked out as under :

a) Industrial:

On shift : Maximum demand in KW x 8 hours duration in days (vide clause 9.02).

Two shifts : Maximum demand in EW x 16 hours x Duration in days (vide clause 9.02)

b) Non-Industrial :

Maximum Demand in DW x 12 hours x Duration in days (vide clause 9.02).

9.04. The energy consumption and the maximum demand arrived at as per clause 9.03 will be charged excluding the energyconsumption and the maximum demand recorded by the meter as per the rates speci-fied in clause 9.02 of this Schedule, for both High Tension and Low Tension service connections.

9.05 the following will be proceeding for collection of the extra levy:--

On detection of theft of energy, the officer authorised as per clause 11 of this Schedule will issues a notice to the consumer asking him to show cause within seven days from the date of receipt of the notice why extra levy should not be made for having committedtheft of energy (vide appendix VI). This is without prejudice to the other rights of theBoard and to the criminal proceedings against the consumer.

If the consumer fails to send his explanation within the stipulated time or if the explanation is not satisfactory, the extra levy will be assessed by the Officer authorised as per clause 11 of this Schedule and a notice sent to the consumer asking the consumer to pay the extra levy in one lump sum.

Extra levy for theft of energy shall be payable in addition to any other charges payable by the consumer in respect of the service connection at the rates notified in the Tariff Notification, Terms and conditions ofSupply of Electricity and Restriction and Control Orders.'

28. Paragraph. 11.00 of the terms and conditions of supply reads as follows:--

'11.00 Authorised Officers:

11.01 The officers authorised to inspect service connection, issue show cause notice, make assessment and function as appellats authority in cases of violation or theft of energy are as follows :

Sl. No.Type of service connectionOfficers authorised

To inspectTo issue show cause noticeTo made assessmentAs Appellate authority

i)Low Tension Service connection including temporary service connection

Any Officer not below the rank of Jr. Engineer Gr. II

Asst. Executive Engineer.Executivelive Engineer.Superintending Engineerii)High Tension service connection including temporary service connection.

Any Officernot below, the rank of Jr. Engineer Gr. II

Executive Engineer.Superintending Engineer.Chief Engineer.

29. Paragraph 12.00 of the terms and. conditions of supply reads as follows :

'12.00 Memorandum of Appeal :

12.01. The consumer shall, if he desires to prefer an appeal mentioned in clauses 6.03 and 9.04 of this Schedule, file the memorandum of appeal in four copies duly signed by him (appellant) with such other documents and material as he deems relevant in the matter. The appeal should be made to the appellate authority within the period specified in clauses 6.03 and 9.0.1 of this schedule.'

30. The petitioner has also questioned appendix VI and VII of the terms and conditions of supply, which will be referred to in the later part of this judgment. All these portionswill be referred to shortly as impugned portions. The prayer in the present writ petition was not sought for in any earlier proceedings so far by the petitioner and no order was passed in such earlier proceedings dealing with the issues that arise for consideration in this writ petition or the reliefs sought for in this writ petition.

31. While elaborating the contentions raised in the affidavits that paragraph 9.00 of the terms and conditions is invalid, Mr. K. Ravi contended that the terms and conditions of supp'ly cannot extend beyond the provisions in Section 49 of the Electricity (Supply) Act. Section 49 of the Electricity (Supply) Act reads as follows :

'49 (1). Provision for the sale of electricity by the Board to persons other than licensees. Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs.' 32. The terms and conditions have been framed by the Board in exercise of the powers conferred under Section 49 of the Electricity (Supply), Act. Section 49 states. 'The Boardmay supply electricity to any person not being a licensee upon such terms and conditions as the Hoard thinks fit'. It is further stated that such terms and conditions shall be subject to the provisions of the Electricity (Supply) Act and the Regulations made thereunder. The decision reported in Ferro Alloys Corporation Ltd. v. A.P. State Electricity Board, : [1993]3SCR199 was cited as an authority for the following proposition :

a) 'As the Board thinks fit' should mean as the Board may reasonably thinks fit; and

b) The terms and conditions must relate to the object and purpose for which they are issued and the power cannot be exercised for a collateral purpose.

In paragraphs 91, 92 and 95 the Supreme Court has observed as follows :

'The attack against Section 49 is that it does not contain any norm or guidelines with regard to framing of terms and conditions for the supply of electricity and in particular, the demand of payment of interest on the amounts due to the Board. Further, the Principle of fairness of action has not been explicitly set out so as to make it a visible guide. The words occurring in the section 'as the Board thinks fit' must be construed as reasonably thinks fit'. We are unable to countenance this argument. A careful reading of Section 49 clearly discloses as was noted in Hindustan Zinc Ltd. v. A.P.S.E.B. : [1991]2SCR643 sub Section (1) of the said section starts with the words subject to the provisions of the Act and all regulations, if any, made in this behalf. Therefore, the Board has to conform to the various provisions of the Act and the Regulations ..... Whether,therefore, under Section 49 reads with Section 79(j) regulations are made, the validity of the regulations could be examined by the Court, whether they are reasonable or not.... In other words, the terms and conditions notified under Section 49 must relate to the object and purpose for which they are issued. Certainly, that power cannot be exercised for a collateral purpose. In. this view, we hold Section 49 as valid.'33. Nowhere in the objects and reasons of the Electricity (Supply) Act mention is made of 'theft of Energy'. Theft of energy is a ,, concept defined and dealt with in Section 39 of the Indian Electricity Act, 1910, Sections 39 to 47 prescribing various penalties for theft and connected offences. Therefore, no condition can be framed by the Board with reference to the theft of energy under Section 49 of the Electricity (Supply) Act since theft of energy is dealt with under the Indian Electricity Act. Section 48 of the Indian Electricity Act clearly states that apart from the penalties prescribed for theft of energy, compensation can be claimed from the offender. The word 'Compensation' has a clear legal meaning. It cannot be an arbitrary or a fanciful sum but should be just equal to the actual value of the loss sustained. This is stipulated in Section 74 of the Indian Contract. Act and explained clearly in the decision reported in Maula Bux v. Union of India, : [1970]1SCR928 as follows :

'In every case of breach of contract the person aggrieved by the breach is not required to prove actual loss or damage suffered by him before he can claim a decree, and the Court is competent to award reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequence of the breach of contract. But the expression 'whether or not actual damage or loss is proved to have been caused thereby', is intended to cover different classes of contracts which come before the Courts. In case of breach of some contracts it may be impossible for the court to assess compensation arising from breach, while in other cases compensation can be calculated in accordance with established rules. Where the court is unable to assess the compensation the sum named by the parties if it be regarded as a genuine pre-estimate may be taken into consideration as the measure of reasonable compensation--, but not if the sum named is in the nature of a penalty. Where loss in terms of money can be determined, the party claiming compensation must prove the loss suffered by him.'34. According to Mr. K. Ravi, learnedcounsel for the petitioner, the question of compensation and assessment thereof would arise only after some person is found and held to be guilty of theft of energy by an authority competent to give such finding. Under Sec- tion 39 of the Indian Electricity Act, a regular Criminal Court is competent to hold a person guilty of such theft. No other provision in the said Act or in the Electricity Supply Act or in any other Act specifically constitutes any other authority to try and find aperson guilty of such theft. Therefore, according to the learned counsel for the petitioner, Section 49 of the Electricity Supply Act does not empower the Board to assume such adjudicatory power.

35. That the extra levy contemplated by paragraph 9.00 of the terms and conditions of supply, according to Mr. K. Ravi, is only for theft of energy within the meaning of the Indian Electricity Act is clear from paragraph 9.01 of the terms and conditions of supply. Hence, para 9.05 of the terms and conditions in so far as it provides for assessment of extra levy for such theft on a mere detection of theft of energy is invalid and is ultra vires the power of the Board. The Board is not empowered by any statutory provision to conduct a trial or enquiry and hold a person guilty of theft of energy, as defined in Section 39 of the Indian Electricity Act. The Board cannot contend that the terms and conditions framed by it empowers the Board to so adjudicate. That would, according to the learned counsel for the petitioner, be putting the cart before the horse. Section 39 of the Electricity Supply Act cannot, therefore be interpreted to confer adjudicatory power on the Board.

36. Paragraph 11,00 of the terms and conditions of supply bears the caption 'authorised officers.' Paragraph 11.01 names certain officers to inspect, to issue show cause notice, to make assessment and to act as appellate authority. No officer is named therein to adjudicate upon the question of guilt. The absence, according to Mr. K. Ravi, is conspicuous. Mr. K. Ravi, learned counsel for the petitioner, cited the decision of the Supreme Court reported in State of Karna-taka v. Shree Rameshwara Rice Mills, Thir-thahalli, AIR 1987 SC 1359, which was decided by the Supreme Court in a simitar situation. The Supreme Court held as follows :

'The powers of the State Government under an agreement entered into by it with a private person providing for assessment of damages for breach of conditions of the agreement and recovery of the damages is confined only to those cases where the breach of conditions is admitted or it is not disputed. The crucial words in the relevant clause of the agreement are 'and for any breach of conditions set forth hereinbefore, the first party (contractor) shall be liable to pay damages to the second party (State Govt.) as may be assessed by the second party'. The terms of the clause do not afford scope for a liberal construction being made regarding the powers of the officer of the State Government to adjudicate upon a disputed question of breach as well as to assess the damages arising from the breach. On a plain reading of the words it is clear that the right of the State Government to assess damages would arise only if the breach of conditions is admitted or if no issue is made of it. If it was the intention of the parties that the officer acting on behalf of the State was also entitled to adjudicate upon a dispute regarding the breach of conditions the wording of the clause would have been entirely different. A right to adjudicate upon an issue relating to a breach of conditions of the contract cannot be said to flow from or is inhered in the right-conferred to assess the damages arising from breach of conditions. The power to assess damages is a subsidiary and consequential power and not the primary power. Even assuming that the terms of the relevant clause afford scope for being construed as empowering the officer of the State to decide upon the question of breach as well as the quantum of damages, the adjudication by the officer of State Government regarding the breach of the contract cannot be sustained under law because a party to the agreement cannot be an arbiter in his own cause. Interests of justice and equity require that where a party to a contract disputes the committing of any breach of conditions the adjudication should be by anindependent person or body and not by the other party to the contract.'37. The decision reported in Municipal Corporation of Delhi v. M/s. Janta Iron and Steel Co. Pvt. Ltd., : [1990]1SCR733 was again cited by Mr. K. Ravi, learned counsel for the petitioner for the above reason in another case. The Supreme Court has held as follows :--

'The learned counsel for the appellant has contended that in view of the conduct of the plaintiff in stealing electricity, the Court should in its discretion refuse to issue a direction for restoration of the electric supply. We, are afraid, it is not possible to agree with the appellant for more reasons than one. The plaintiff is seriously denying the allegation of theft and it is not possible to assume the accusation as correct without a full-fledged trial on this issue. The case of Jagarnath Singh v. B. S. Ramaswamy, : 1966CriLJ697 relied upon on behalf of the appellant is clearly distinguishable inasmuch as the consumer in that case was convicted under the Indian Penal Code, and the conviction was being maintained in appeal. Besides, the service of notice is a prerequisite for disconnection, and the appellant cannot be allowed to go back upon its words and refuse the consumer the benefit of notice as contemplated by the agreement. The learned counsel for the appellant urged that the Delhi Electricity Supply undertaking will seriously suffer if this view is upheld. We do not understand as to what is the difficulty in the way of the appellant to serve a notice on the consumer before discontinuing the supply. It has to be appreciated that the licensee undertaking is performing a public duty and is governed by a special statute and the law also contemplates service of a notice before disconnection of supply of electricity. The courts below have made it clear that they have not examined the case on merits. The question whether the allegations of theft are true or not has to be examined and decided in an appropriate proceeding, and the appellant will not, therefore, be prejudiced by the present judgment in its claim. In the result, the appeal is dismissed but, without costs.38. The Madhya Pradesh High Court in Harsh Wood Products Pvt. Ltd. v. State of Madhya Pradesh, 1993 MPLJ 901 held asfollows:

a) Any penal action for theft of energy before trial is violative of Article 14 of the Constitution of India.

b) Before theft is judicially examined and established, action under Clause 31 (3) of the general conditions for supply of electrical energy (analogus to terms and conditions) may fall foul of the constitutional mandate; and

c) The board may raise a legal demand only after theft is judicially established in criminal proceedings.

39. Placing strong reliance on the above decision, Mr. K. Ravi, learned counsel for the petitioner, contended that the entire paragraph 9.00, especially paragraph 9.05,is liable to be struck down in so far as it contemplates or permits assessment, demand and collection of extra levy for theft of energy without having to wait for a proper adjudication to establish the offence of theft of energy. The learned counsel has also pointed out the distinction between certain other statutory provisions like customs Act, FERA, etc., on the one hand and paragraph 9.00 of the terms and conditions of supply on the other, in that, in the former, judicial power to properly adjudicate upon the question of guilt is expressly and specifically granted statutorily by such enactments while no statutory provision confers, specifically or expressly any such power on any of the respondents, Section 49 of the Electricity Supply Act not granting specifically or expressly any such power. The Indian Electricity Act, which declares theft of energy as an offence, does not provide for any such adjudication departmentally. Hence, according to Mr. K. Ravi, at least paragraph 9.05 of the terms and conditions is liable to be struck down as violative of Articles 14, 20(1) and 21 of the Constitution of India.

40. Apart from and without prejudice to the above contentions, Mr. K. Ravi further submitted that even if paragraph 9.00 of theterms and conditions is viewed as a term forming part and parcel of the contract between the consumer and the Board, it is against public policy to allow one contracting party to be a judge of his own cause and to permit him to levy a huge penalty on the other party at an arbitrary rate unilaterally fixed by the judging party. Such a contractual term is unconscionable and is liable to be struck down. For this proposition the learned counsel for the petitioner cited the decisions reported in Central Inland Water Transport Corporation Ltd, v, Tarun Kanti Sengupta, : (1986)IILLJ171SC and Kumari Shrilekha Vidyarthi v. State of U. P., : AIR1991SC537 .

41. In : (1986)IILLJ171SC , the Supreme Court has held as follows:--

'The principle deducible from various precedents is that the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. The types of contracts to which the principle formulated above applies are not contracts which are tainted with illegality but are contracts which contain terms which are so unfair and reasonable that they shock the conscience of the Court. They are opposed to public policy and require to be adjudgedvoid'.42. In : AIR1991SC537 , the Supreme Court in paragraphs 29, 35 and 36 has held as follows:--

'It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional..... It is now too well settled that every State action, in order to survive, must not be susceptible to the vice of arbitrariness which is the crux of Article 14 of the Constitution and basic to the rule of law, the system which governs us. Arbitrariness is the very negation of the rule of law.Satisfac-tion of this basic test in every State action is sine qua non to its validity and in this respect, the State cannot claim comparison with a private individual even in the field of contract. This distinction between the State and a private individual in the field of contract has to be borne in the mind..... The meaning and true import of arbitrariness is more easily visualized than precisely stated or defined. The question, whether an impugned act is arbitrary or not is ultimately to be answered on the facts and in the circumstances of a given case. An obvious test to apply is to see whether there is any discernible principle. emerging from the impugned act and if so, does it satisfy the test of reasonableness, where a mode is prescribed for doing an act and there is no impediment in following that procedure, performance of the act otherwise and in a manner which does not disclose any discernible principle which is reasonable, may itself attract the vice of arbitrariness. Every State action must be informed by reason and it follows that an act uninformed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being. It is trite that 'be you ever so high, the laws are above you'. This is what men in power must remember, always.'.43. The clauses in paragraph 9.02 and 9.03 of the terms and conditions provide foran extra levy at four times the highest tariff rate for 12 months and that too, to be worked out by multiplying the maximum demand (full capacity) by 24 hours for the entire period. This formula has no rhyme or reason. The assumption that the consumer has utilised the full capacity load during 24 hours every day is unrealistic, according to Mr. K. Ravi. Hence, he would submit, that the entire paragraph 9.02 and 9.03 is liable to be struck down as arbitrary and unreasonable, offending Article 14 of the Constitution and Section 74 of the Indian Contract Act read in the light of the decision reported in : [1970]1SCR928 , cited supra.

44. The next contention of Mr. K. Ravi, learned counsel for the petitioner, relates to Appendix VI and VII, Before dealing with it, it will be useful to extract those two appendix. Appendix VI reads as follows :--

Appendix VI

Show Cause Notice for theft of energy/unauthorised reconnection of a disconnectedservice connection (Vide Clause 9.05 of theSchedule)

From To Letter No. Sir,

Sub:-- Terms and conditions of supply of Electricity -- Schedule -- Part I -- Theft of energy/ unauthorised reconnection of a disconnected service connection.

Ref:-- Service Connection No. ..... Distribution classified under ..... HighTension/ Low Tension Tariff.

On ..... at ..... hours, the serviceconnection number at Door/SF No. ..... which is held in your name was inspectedby.....

2. Theft of energy in your service connection has been reported.

Illegal restoration of supply to your service connection which was under disconnection has been reported.

3. You are hereby called upon to show cause within seven days from the date of receipt of this letter as to why extra levy for the above in accordance with the terms andconditions of supply of Electricity should not be collected from you.

4. If wo reply is received from you with reference to para 2 above within the time stipulated or if your reply is found not convincing, further action to collect the extra levy as per the terms and conditions of supply of electricity will be taken.

5. You are requested to acknowledge receipt of this notice immediately.

Yours faithfully,

Asst. Executive Engineer/

Executive Engineer.

Copy to the Superintending Engineer.

Copy to the Executive Engineer/Assistant Executive Engineer.

Copy to the Assistant Engineer/Junior Engineer.

2. He is instructed to arrange to serve this notice on the consumer underdated acknowledgment and send the acknowledgment to this office.

Copy to the Revenue Branch.

Strike out whichever is not applicable.'

'Appendix VII

Assessment Notice for theft of energy/unauthorised reconnection of a disconnectedservice connection (vide clause 9.05 of theSchedule)

From ToLetter No.

Sir,

Sub:-- Terms and conditions of supply of Electricity -- Schedule -- Part I -- Theft of energy/unauthorised reconnection of a disconnected service connection.

Ref:-- 1. Show cause notice of .....dated .....

2. Your letter dated .....

On examination of your representation with reference to the information available, it is found that the following has been commit-ted in your service connection:--

'Theft of energy

Illegal restoration of supply to your service connection, which was under disconnection.

2. The extra levy payable by you for the energy stolen is worked out as Rs ..... (Rupees ...... only). The working sheet isenclosed.

3. You are hereby called upon to pay the extra levy in one lump sum. The extra levy should be paid on or before ..... If you failto pay the above amount before ..... theservice connection will be disconnected.

4. If you choose to prefer an appeal against this order, you may appeal to the appellate authority (viz., Superintending Engineer..... Distribution Circle Chief Engineer(Distribution) .....Region) within 60 daysfrom the date of receipt of this notice after paying the extra levy.

5. You are requested to acknowledge the receipt of this notice immediately.

Yours faithfully,

Executive Engineer/

Superintending Engineer.

Enclosure: Working Sheet.

Copy to the Assistant Executive Engineer.

Enclosure: Copy of working sheet.

Copy to the Superintending Engineer/Executive Engineer.

Enclosure : Copy of working sheet.

Copy to the Asst. Accounts Officer/ RevenueBranch.

Enclosure : Copy of working sheet.

Copy to the Asst. Engineer/Junior Engineer.

2. He is instructed--

(i) to arrange to serve this notice with enclosure on the consumer underdated acknowledgment and send the acknowledgmentto this office; and

(ii) to disconnect the service connection in case the consumer does not pay the amount before the expiry of the period stipulated in para. 4 above and also promptly report the fact of having done so.Copy to the Revenue Branch.

Enclosure : Copy of working sheet.

Strike out whichever is not applicable.'

45. Why Appendix VI is invalid: According to Mr. K. Ravi, learned counsel for the . petitioner, Appendix VI is the form of show cause notice prescribed in the terms and conditions, which provides for issuing show cause notice without having to disclose the basis of suspicion and stating the charge in passive voice. For the first mentioned reason, a notice in this form was quashed, according to Mr. Ravi, by this Court in W.P. No. 125 of 1990, which was followed in P. Subramaniam v. The Asst. Divisional Engineer 1994 WLR 197. The decision reported in Lal Babu Hussain v. Electoral Registration Officer AIR 1995 SCW 1254 was cited by Mr. K. Ravi, learned counsel for the petitioner, as an authority for the proposition that if opportunity of being heard is to be meaningful and purposive, the person concerned must be informed why a suspicion has arisen against him and that unless the basis for the doubt is disclosed, no explanation could be offered. The decision reported in Mohd. Quaramud-din v. State of A. P. : (1994)5SCC118 is again cited by Mr. K. Ravi for the proposition that not supplying to the delinquent a report relied upon amounts to violation of natural justice and vitiates the final order. Therefore, Mr. K. Ravi would urge that the aforesaid format cannot be allowed to remain in force in view of the above decisions. Mr. K. Ravi would further submit that the decision reported in Managing Director, ECIL v. B. Karunakar 1994 AIR SCW 1050 is an authority for the proposition that a statutory rule which does not permit furnishing copy of the enquiry report offends natural justice and such a rule itself is invalid even if it is silent on the said question. The above are the crux of the submissions made by Mr. K. Ravi, learned counsel for the petitioner regarding Appendix VI.

46. Why Appendix VII is invalid: According to Mr. K. Ravi, Appendix VII is the form of the assessment order prescribed in the terms and conditions of supply of electricity. An order in this format was already quashed in W.P. No. 125 of 1990 by P. S. Mishra, J., as he then was, which was followed by J. Kanakaraj, in 1994, Writ LR 197, for the reason that it permits passing of a non-speaking order. The decisions reported in the Siemens Engineering and . v. Union of India : AIR1976SC1785 and Prestolite (India) Ltd. v. Regional Director : (1995)IILLJ622SC have been cited by Mr. K. Ravi, learned counsel for the petitioner as authorities for the proposition that an order which does not record and disclose the reasons supporting it is bad in law and is violative of natural justice. The decision reported in Union of India v. Mario Cabral e Sa : AIR1982SC691 is an authority for the proposition that reasons in support of the order cannot be given through other materials.

47. According to Mr. K. Ravi, learnedcounsel for the petitioner, in Clause 3 of Appendix VII Form, threat of disconnection on failure to pay the extra levy is mentioned. This clause is, therefore, invalid. Further, clause 10 of the agreement entered into between the petitioner and the Board contemplates that on finding the consumer guilty of theft of energy, the Board may, in addition to the extra levy, disconnect supply for such period as the Board may decide. Paragraph 10.00 of the terms and conditions of supply provides such disconnection for three months where the theft is committed for the second time within five years and disconnection for one year where it is committed for the third time. According to Mr. K. Ravi, the threat of disconnection in clause 3 of Appendix VII is contrary to this provision and hence invalid. Clause 4 of the said form in Appendix VII stipulates that the entire assessed levy should be paid as a condition precedent for filing an appeal. The clause providing for such appeal in paragraph 9.04 of the terms and conditions of supply (subsequent addition) does not contemplate this. In any event, Mr. K. Ravisubmits that the condition is onerous and makes the appeal a mere farce. Hence, Appendix VII is liable to be struck down.

48. The following is the argument of Mr. K. Ravi, learned counsel for the petitioner on the appeal provision: Originally, there was no appeal provision in para. 9.00 of the terms and conditions of supply. Subsequently, a sentence was added to paragraph 9.04 providing an appeal. This appeal, according to Mr. K. Ravi can only be against the arrival of the levy as per clause 9.03. That is the scope and purport of Paragraph 9.04. Such appeal provision cannot be read into Paragraph 9.05 so as to be an appeal against adjudication of theft itself. The decision reported in Carl Still G.M.B.H. v. The State of Bihar : [1962]2SCR81 was cited by the learned counsel for the petitioner in this context. The above decision is an authority for the proposition that where proceedings are taken before a Tribunal under a provision, which is ultra vires, a writ would lie and one need not wait for the proceedings to run their full course. Hence, the pendency of an appeal cannot in any way limit or scuttle the power of this Court to declare the very provisions under which action was taken as invalid and ultra vires.

49. In this decision reported in : [1962]2SCR81 , the Supreme Court has held as follows:

'It is next contended for the respondents that, whatever the merits of the contentions based on the construction of the contract, the proper forum to agitate them would be the authorities constituted under the Act to hear and decide disputes relating to assessment of tax, that it was open to the appellants to satisfy those authorities that there have been no sales such as are liable to be taxed that indeed they were bound to pursue the remedies under the Act before they could invoke thejurisdiction of the Court under Article 226 and that the learned Judges of the High Court were, therefore, right in declining to entertain the present petitions. It is true that if a statute sets up a Tribunal and confides to it jurisdiction over certain matters and if a proceeding is properly taken before it in respect ofsuch matters, the High Court will not in the exercise of its extraordinary jurisdiction under Article 226, issue a prerogative writ so as to remove the proceedings out of the hands of tthe Tribunal or interfere with their course before it. But it is equally well settled that, when proceedings are taken before, a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the Court under Article 226 for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course.'50. Winding up his arguments, Mr. K. Ravi contended that even if the impugned portions are struck down, the question of theft of energy will be established or negatived in the criminal proceedings already launched and if theft is established in such proceedings, it would be open to the Board to levy a just compensation for the energy stolen in accordance with law and recover the same from the consumer. In this case, the financial status of the consumer/petitioner is not suspected and in fact, the auditor's certificate issued on 14-5-1995 shows that the net worth of the petitioner-mill is Rs. 13.2 crores. This apart the mill was able to readily furnish a bank guarantee for rupees one crore and even pay Rs. 10 lakhs as ordered by this Court. In conclusion, Mr. K. Ravi, learned counsel for the petitioner submitted that the entire para. 9.00 of the terms and conditions of supply is invalid since theft of energy is not within the scope of a supply contract or within the scope of the electricity Supply Act. This subject, according to him, falls only under the Indian Electricity Act and hence cannot form part of the terms and conditions of supply framed under Section 49 of the Electricity Supply Act. In any event, according to the learned counsel for the petitioner, para. 9.05 of the terms and conditions of supply is invalid in so far as it contemplates extra levy being made on mere detection and without a due trial. In so far as Appendix VI and VII are concerned, Mr. K. Ravi submits, they are already quashed by this Court and therefore they are invalid.

51. Mr. R. Krishnamurthi, learned Senior Counsel appearing for the respon- dents', answered, each and every contention of Mr. K. Ravi, learned counsel for the petitioner. To start with, the learned Senior counsel contended that R. Jayasimha Babu, J., disposed of W.P. Nos. 11039, 11040 and 11042 of 1995 on certain terms leaving the instant writ petition alone, and that the petitioner, who gave an undertaking to abide by the said terms, acted also in part by making a deposit of Rs. 10 lakhs on the same date viz., 28-8-1995 and the Board accordingly restored the supply in accordance with the directions contained in the order. The petitioner also filed an appeal against the order of the Superintending Engineer dated 26-5-1995 as per the directions of the learned Judge. However, the petitioner did not comply with the other two conditions imposed by the learned Judge relating to deposit till date. Therefore, the Board was keeping the appeal pending. It is at this stage the petitioner got the present writ petition to be posted for hearing.

52. The following position, according to Mr. R. Krishnamurthi, learned Senior Counsel, would emerge from the facts stated above. It would be seen that the petitioner had refused and failed to comply with the terms of the order passed by this Court in the aforesaid three writ petitions and therefore, in the submission of the Board, the petitioner is not entitled to be heard to challenge the validity of the terms and conditions of supply in the present writ petition.

Having agreed to the conditions of the order passed by this Court and having got the benefit out the the said order, the petitioner should be directed to comply with the other two conditions imposed by R. Jayasimha Babu, J., or to suffer the consequences thereof before being allowed any indulgence in the present writ petition, which is a discretionary remedy under Article 226 of the Constitution. In any event, havi ng regard to the fact that the writ petitions filed by the petitioner questioning the show cause notice, the final order and the question of reconnection have been disposed of with certain conditions by R. Jayasimha Babu, J., which order has becomefinal, the petitioner is entitled to challenge only the validity of the terms and conditions of supply in the abstract and not entitled to challenge the correctness or the validity of the show cause notice or the final order passed against them.

53. While answering the contention of the petitioner that the terms and conditions of supply are not traceable to any provision of the Act and should be held to be contractual and that the terms and conditions cannot be equated to the Rules under Section 78 or Regulations under Section 79 and therefore have no statutory force, Mr. R. Krishna-murthi, learned Senior Counsel contended that Section 49 of the Electricity Supply Act confers on the Board two powers viz., (a) the power to fix tariff; and (b) the power to prescribe the terms and conditions of supply. Therefore, Section 49 of the Electricity Supply Act is the source of the power of the Board to prescribe the terms and conditions of supply, which are binding on every consumer. The scope of Section 49 of the Electricity Supply Act has come up for consideration on a number of occasions before the Supreme Court and the following are a few of them, which, according to the learned Senior Counsel, would clearly establish that the present terms and conditions of supply are clearly traceable to Section 49 of the Electricity Supply Act.

54. In the Adoni Cotton Mills Ltd. v. The Andhra Pradesh State Electricity Board : [1977]1SCR133 , the Supreme Court had held as follows:--

'Section 49(4) of the 1948 Act embodies the same principle which is enunciated in Article 14 of the Constitution of India. It is the Principle of equality or non-discrimination. Section 49(4) does not mean a mechanical equal treatment. The obligation not to discriminate involves both the right and the obligation to make reasonable classification on the basis of relevant factors. The guidance is clearly furnished by the principles embodied in Section 49(4). The language of Section 49 shows that the power of the Board to enforce rationing can be exercised without making any regulations. If regulations weremade under Section 79(j) of the 1948 Act, such regulations would have to be in conformity with Section 49(4) and in the exercise of its powers the Board would have to abide by the Regulations.'55. In the decision reported in M/s. Jagadamba Paper Industries Pvt. Ltd. v. Haryana State Electricity Board : [1984]1SCR165 , the Supreme Court has ruled as under:

'We are of the view that the Board has been conferred with statutory power ..... underSection 49(1) of the Act to determine the conditions on the basis of which supply is to be made. This Court in Bisra Stone Lime Co. Ltd. v. Orissa State Electricity Board : [1976]2SCR307 took the view that enhancement of rates by way of surcharge was well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act. What applied to the tariff would equally apply to the security, that being a condition in the contract of supply. Each of the petitioning consumers had agreed to furnish security in cash for payment of energy bills at the time of entering into their respective supply agreements. There was no challenge in these writ petitions that the demand of security at the time of entering into supply agreements has to be struck down as being without jurisdiction. Section 49(1) of the Act clearly indicates that the Board may supply electricity to any person upon such terms and conditions as the Board thinks fit. In exercise of this power the Board had initially introduced the condition regarding security and each of the petitioners had accepted the term.'56. In the decision reported in HyderabadEngineering Industries Ltd. v. A. P. State Electricity Board : [1988]3SCR159 the Supreme Court has observed as follows:--

'49. Provision for the sale of electricity by the Board to persons other than licensees.--

(1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit andmay for the purposes of such supply frame uniform tariffs.

(2) In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors, namely--

(a) the nature of the supply and the purposes for which it is required;

(b) the co-ordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee;

(c) the simplification and standardisation of methods and rates of charges for such supplies;

(d) the extension and cheapening of supplies of electricity to sparsely developed areas.

(3) Nothing in the foregoing provisions of this Section shall derogate from the power of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licencee, having regard to the geographical position of any area, the nature of the supply and purposes for which supply is required and any other relevant factors,

(4) In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person.

Sub-clause (1) of this Section clearly provides that the Board could lay down conditions of supply and for purposes of such supply it may also frame uniform tariffs. Sub-section (1), therefore, clearly authorises the Board to lay down the conditions of supply and have to fix uniform tariffs as provided for in sub-clause (2). If there is any doubt, sub-clause (4) makes it clear that in exercise of powers under this section, Board court fix the conditions of supply and also fix the tariffs and it was, therefore, contended on behalf of the respondent-Board that although the Division Bench referred to Section 18(c), still the Board had enough power under Section 49 itself to laydown the conditions of supply.'

57. In the decision reported in Bihar State Electricity Board, Patna v. M/s. Green Rubber Industries : [1989]2SCR275 , the Supreme Court has observed in paragraphs 21 and 22 as follows:

'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 consumer 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. Difference between this contractual clement 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 have affected the consumer with whom it is made, as was held in Northern Ontario Power Co. Ltd. v. La Roche Mines Ltd., (1938 (3) All ER 755).

For the foregoing reasons we have no hesitation in holding that the agreement was reasonable and valid and it was not determin-ed with the disconnection of supply to the respondent, firm by the Board on 28th September, 1981, but only according to the stipulation in Clause 9(b) of the agreement as discussed above. The liability to pay the minimum guaranteed charges, therefore, continued till the determination of the contract. The Board was, therefore, entitled to submit the bills and made the demand on that account, and recover the same according 'to law.'

58. In the decision reported in Ferro Alloys Corporation Ltd. v. A. P. State Electricity Board : [1993]3SCR199 , the Supreme Court has held in paragraphs 88 and 90 as under:

'Section 49 is the provision for sale of electricity by the Board to persons other than the licensees. Sub-section (1) of the said section commences with the words 'subject to the provisions of this Act and of Regulations. This means if there are any provisions regulating the Board in the matter of supplying electricity to any person not being a licensee then the supply by the Board will be subject to all those provisions. It has been so laid down in Mysore State Electricity Board v. Bangalore Woollen, Cotton and Silk Mills Ltd. : AIR1963SC1128 :

The expression 'subject to the provisions of this Act' merely that if there are any provisions regulating the Board in the matter of supplying electricity to any person not being a licensee, then the supply by the Board will be subject to those provisions. No provision has been brought to our notice which regulates the Board in the matter of the charges which it may fix for the supply of electricity'.... We are of the view that the Board hasbeen conferred statutory power under Section 49(1) of the Act to determine the conditions on the basis of which supply is to be made. This Court in Bisra Stone Lime Co. Ltd. v. Orissa State Electricity Board : [1976]2SCR307 , took the view that enhancement of rates by way of surcharge was well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act. What applied to the tariff wouldequally apply to the security, that being a condition in the contract of supply. Each of the petitioning consumers had agreed to furnish security in cash for payment of energy bills at the time of entering into their respective supply agreements. There was no challenge in these writ petitions that the demand of security at the time of entering into supply agreements has to be struck down as being without jurisdiction. Section 49(1) of the Act clearly indicates that the Board may supply electricity to any person upon such terms and conditions as the Board thinks fit. In exercise of this power the Board had initially introduced the conditions regarding security and each of the petitioners had accepted the term.'

59. The above judgments cited by Mr. R. Krishnamurthi, learned Senior Counsel for the respondents, in my view, would clearly answer the contention of the petitioner's counsel and would clearly go to show that the terms and conditions of supply are statutory and are traceable to Seclion 49 of the Electricity (Supply) Act. As pointed out by the Supreme Court in the above judgments, the Board has been conferred with statutory power under Section 49(1) of the Electricity (Supply) Act to determine the conditions on the basis of which supply is to be made.

60. The argument of Mr. K. Ravi that the terms and conditions of supply are wholly unfair, opposed to public policy and violative of the principles of natural justice and thus ultra vires the Constitution is answered as under by Mr. R. Krishnamurthi, learned Senior Counsel for the respondents. It was also contended by the learned counsel for the petitioner that persons like the petitioner were compelled to sign the dotted lines of the agreement which provide for the observance of the terms and conditions of supply and the Court has got ample power to strike down the said terms and conditions if it found to be arbitrary, unreasonable and opposed to public policy. The submission of the learned Senior Counsel for the respondents to the above contention of the learned counsel for the petitioner, and in particular with reference to the relevant clauses of the terms andconditions of supply, are as follows: The terms and conditions of supply, according to the Board, are not contractual but statutory. Therefore, even without the agreement containing the terms and conditions of supply, every consumer would be bound by the terms and conditions of supply. That apart, as held by the Supreme Court in : [1993]3SCR199 , the conditions which are incorporated in the agreement and signed by the parties is binding on either of the parties even though they might not have read them or know about the legal effect of the same.

61. In dealing with the validity of the agreement containing a clause relating to the minimum guarantee, the Supreme Court had occasion to observe in Bihar State Electricity Board v. Green Rubber Industries, : [1989]2SCR275 as follows:--

'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, 1974 (3) All ER 616. 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.'62. It is true that the validity of the terms and conditions or the agreement could begone into by Courts on the touch-stone of Article 14 of the Constitution or Section 23 of the Indian Contract Act as held by the Supreme Court in Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly : (1986)IILLJ171SC . Paragraph 9.05 of the terms and conditions of supply is the provision which is mainly challenged by the petitioner. It was contended by the petitioner that para. 9.05 provides only for determining the extra levy and does not provide for the determination as to whether theft has been committed or not. It was, therefore, contended by the petitioner that the Board has no jurisdiction in the matter unless theft is admitted or found by any competent Court. Reference was also made by the petitioner to a judgment of the Supreme Court reported in State of Karnataka v. Shree Rameshwara Rice Mills, Thirthahalli (AIR 1987 SC 1359).

63. Mr. R. Krishnamurthi, learned Senior Counsel, answered the above contention as follows:-- According to him, the petitioner has wholly misconstrued the scope of para. 9.05 of the terms and conditions of supply. The said provision provides for the procedure to be followed when a theft is detected by the officers to levy extra charges. The terms and conditions contemplate initially a show cause notice to be given by .a proper authority. The consumer is called upon to explain as to why action should not be initiated for the theft detected. The consumer submits his reply which would neces-sarily deal with the allegations of commission of theft. The appropriate authority, as contemplated by para 11 of the terms and conditions of supply is thereafter required to consider the explanation submitted and render a finding in terms of para. 9.05 read with Appendix VII as to whether theft of energy was committed or not. Therefore, it is contended by the learned Senior Counsel that the argument of Mr. K. Ravi, learned counsel for the petitioner is misconceived on this aspect.

64. Mr. R. Krishnamurthi, learned Senior Counsel for the respondents, distinguished the judgment of the Supreme Court reported in AIR 1987 SC 1359, cited by the learned counsel for the petitioner. Accordingto the learned Senior Counsel, that was a case where the provisions contained in Clause 12 of the agreement in the said case provide for determination of damages when there was a breach of the agreement. The said clause was interpreted by the Supreme Court to empower the determination of damages and not with reference to any other determination. Thus, the Supreme Court held that the question of determining the damages under Clause 12 in that case would arise only when the breach was admitted as proved in any of the manner. On the other hand, in the instant case, para, 9.05 of the terms and conditions of supply read with Appendix VII clearly shows that the proper authority is obliged and required to determine whether theft has been committed or not and is further required to record a finding that a theft is committed or not. Therefore, according to the learned Senior Counsel for the respondents, neither the contentions nor the judgment referred to would have any application to the present case. That apart, it would be seen that the extra levy contemplated in para. 9.03 is one to be determined based on working of a formula. Therefore, it would be seen that the enquiry contemplated by para. 9.05 of the terms and conditions of supply and the determination by the proper authority would refer only to the question as to whether theft has been committed or not and not with reference to the question of determining the quantum of damage since it is only an arithmetical working on the basis of the formulae specified in para. 9.02 of the terms and conditions of supply. Therefore, I am of the view, that the first contention of Mr. K. Ravi, learned counsel for the petitioner regarding para. 9.05 of the terms and conditions of supply deserves to be rejected.

65. The second submission relating to the validity for the terms and conditions of supply is, that the provision in para. 9.05 read with Appendix VII and VII of the terms and conditions of supply are arbitrary and unreasonable and opposed to public policy since they do not contemplate disclosure of relevant facts, disclosure of reasons and provide only for a finding in the prescribed format. The learned Senior Counsel for the respon-dents answered this contention as follows. Para. 9.05 of the terms and conditions prescribes the procedure to determine the question as to whether theft has been committed ' or not and to levy extra charges if theft or misuse is found. Necessarily, therefore, the authority would have to consider the materials and the explanation, if any, submitted by the consumer and record his finding. The proceedings contemplated is a summary enquiry but, nevertheless, satisfies the rules of natural justice and fair play. According to the learned Senior Counsel for the respondents, what is contemplated in para. 9.05 of the terms and conditions of supply and the Appendixes VI and VII, is the requirements to be followed viz., that the consumer should be informed of the detection about the theft or misuse, and after considering the explanation of the consumer, if any, arrive at a conclusion based on the materials produced. The requirements to deal with the materials and recording reasons would depend upon the facts and circumstances of each case. Neither para. 9.05 nor the Appendixes as such are illegal or violative of Article 14 of the Constitution of India.

66. It is contended by Mr. Krishna-murthi, learned Senior Counsel for the respondents, that the petitioner is attempting to question the validity of the order under the guise of challenging the provisions of law. As held by the Supreme Court in : [1978]2SCR272 , the power to pass an order is different from the exercise of the said power. Whether an order is wrong or arbitrary relates to the case of exercise of power and does not touch upon the existence of the power itself. It is submitted by the learned Senior Counsel for the respondents that para. 9.05 read with the other related paragraphs of the terms and conditions of supply is a salutary provision which provides for penal consequences if a consumer indulges in theft or misuse of energy. Rules relating to observance of natural justice are found embodied in para. 9.05 of the terms and conditions and, therefore, the contentions of the petitioner in this regard deserve to be rejected.

67. The next contention of the petitioner is that para. 9.05 of the terms and conditions of supply is violative of the principles of natural justice as it does not contemplate personal hearing to the consumer before final orders are passed. This contention, according to the learned Senior Counsel for the respondents, is also misconceived. Personal hearing is not necessarily part of the principles of natural justice. The learned Senior Counsel cited the decision reported in : 1983ECR1667D(SC) . It would be seen that the rules of natural justice would not include personal hearing in all situations. Para. 9.05 of the terms and conditions of supply contemplates reasonable opportunity of making representations and considerations thereof, which would satisfy principles of natural justice. If the appropriate authority thinks that personal hearing is required, he may give a personal hearing. In any event, even if personal hearing should be given in the matter, the provisions contained in para. 9.05 could be read so as to include a right of personal hearing. Or otherwise, if the Court is of the view that personal hearing should be provided in the enquiry, the same can be read into para. 9,05 as has been done in a number of cases where the principles of natural justice has been read into any provision. Therefore, as rightly contended by Mr. R. Krishna-murthi, learned Senior Counsel for the respondents, para. 9.05 of the terms and conditions of supply cannot be said to be bad on this account. It may be relevant to state that an appeal is provided for against the order passed under para. 9.05 in terms of para. 9.04 as amended. The Appellate Authority is required to consider all materials and also give a personal hearing to the consumer, The enquiry in the appeal stage is a full-fledged enquiry including personal hearing. Viewed thus, the proceedings contemplated by paras. 9.04 and 9.05 are reasonable and valid.

68. In this context, the learned Senior Counsel for the respondents cited the decision of the Supreme Court reported in Swadeshi Cotton Mills v. Union of India : [1981]2SCR533 , wherein the Supreme Court in paragraph 42 observed as follows:--

'In short, the general principle -- as dis-tinguished from an absolute rule of uniform application -- seems to be that where a statute does not, in terms, excluded this rule of prior hearing but contemplates a post-decisional hearing amounting to a full review of the original order on merits, then such a statute would be construed as excluding the audi alteram partem rule at the pre-decisional stage. Conversely, if the statute conferring the power is silent with regard to the giving of a pre-decisional hearing to the person affected and the administrative decision taken by the authority involves civil consequences of a grave nature, and no full review or appeal on merits against that decision is provided, Courts will be extremely reluctant to construe such a statute as excluding the duty of affording even a minimal hearing shorn of all its formal trappings and dilatory features at the pre-decisional stage, unless, viewed pragmatically, it would paralyse the administrative process or frustrate the need for utmost promptitude. In short, this rule of fair play 'must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands'. The Court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, to recall the Words of Bhagwati, J., the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise.'In the present case, the order of R. Jayasimha Babu, J., makes it clear that the petitioner should be given a personal hearing in the appeal and a reasoned order to be passed by the Appellate Authority. Therefore, as rightly contended by Mr. R. Krishnamurthi, the contention of the petitioner in this regard deserves to be rejected.

69. The next challenge was that while there is an appeal provided against the order detecting irregularities, no appeal is provided against the order levying extra charges after holding that theft had been committed. It was also contended that the amendment brought about to para. 9.04 of the terms and conditions of supply on 31-8-1989 would not covera case of an order passed under para. 9.05 of the terms and conditions of supply. This contention, in my opinion, is also misconceived. By an amendment brought about in B.P. No. 292 dated 31-8-1989, para. 9.04 of the terms and conditions of supply has been amended with an addition of a second paragraph, which reads as follows:

'If any consumer desires to prefer an appeal to the Appellate Authority, he may do so within sixty days from the date of receipt of the assessment.'70. This amendment providing for appeal, in my opinion, covers the case of an order passed in a theft case, namely, to an enquiry and an order passed under para. 9.05 of the terms and conditions of supply. Para. 9.05 deals with the procedure to be followed when a theft is detected viz., against the final order passed with a finding about the commission of theft and imposing an extra levy for the energy thieved. The extra levy to be imposed as per para. 9.05 is dealt with in para. 9.03. Para. 9.02 deals with the formula. Para. 9.04 provides that the extra levy contemplated by paras. 9.02 and 9.03 should be in addition to the actual consumption charges for energy recorded. Therefore, the second paragraph providing for an appeal has been rightly and appropriately added in para. 9.04, which is the finale to the proceedings initiated for theft of energy leading to the levy of extra levy. The appeal provided for under para. 9.04 does not apply to any other order other than the charges of extra levy that is contemplated by para. 9.00 viz., para. 9.05 read with paras. 9.03 and 9.04. The appeal cannot relate to any other levy except the extra levy contemplated by this paragraph. As a matter of fact, this contention itself, in my opinion, is not open to be urged by the petitioner since the petitioner has understood the scope of the remedy of appeal and has agreed to file an appeal under the terms and conditions of supply before R. Jayasimha Babu, J., which is recorded in the said order. In the light of this fact, the contention of the petitioner deserves to be rejected.

71. The next submission of the learned counsel for the petitioner relates to para. 9.02of the terms and conditions of supply. It was contended that the said provision, which provides for extra levy for a block period of 12 months without requiring a finding regarding the period during which the theft has taken place, is clearly arbitrary and opposed to public policy. This contention is absolutely untenable. Para. 9.00 of the terms and conditions of supply deals with theft of energy and extra levy. While detection of theft is possible to be made, it is a near impossibility to find out the exact period during which the theft has been committed. It is in these circumstances, the terms and conditions prescribe a period of 12 months or from the date of service connection to the date of detection whichever period is less. Once theft is detected and determined under the Rules, it does not lie in the mouth of a wrong-doer to question the punishment or consequences which arise out of an offence. Theft of energy constitutes an offence under Section 39 of the Indian Electricity Act and is punishable in law. That apart, the theft of energy involves consumption of energy by a consumer without paying for it and deprives the society of electrical energy, which is a scarce commodity. Therefore, as rightly pointed out by Mr. R. Krishnamurthi, learned Senior Counsel for the respondents, a deterrent punishment like the one in question is absolutely reasonable and cannot be questioned as arbitrary.

72. It was next contended by the learned counsel for the petitioner that para. 11.00 of the terms and conditions of supply- enables various authorities to issue show cause notice, to pass final orders and to decide appeals and that all the officers are employees of the Board. This contention is misconceived. It is the Board which grants supply to the consumers on payment of charges. A consumer who misuses the energy is, therefore, liable for the consequences prescribed in law. It is the Board through its officers which enforces the law by causing inspection and initiating proceedings for any misuse or theft detected. The proceedings contemplated by the terms and conditions of supply are an extra levy for the theft committed, which is apart from the penal consequences contemplated by the Indian Electricity Act. Such a levy can bevalidly made by officers of the Board. Therefore, the contention of Mr. K. Ravi, learned counsel for the petitioner in this regard is rejected as, I am of the view, that there is no illegality in it.

73. One incidental contention made by Mr. K. Ravi is that as per Clause 10 of the contract, the authority to levy additional charges has been granted only to the Tamil Nadu Electricity Board and not to any subordinate officers and, therefore, the action by the delegates is illegal. This contention, as rightly pointed out by the learned Senior Counsel for the respondents, is absolutely untenable for the following reasons:

(a) The terms and conditions of supply, which is statutory in character, provide for the authorities competent to issue show cause notice, to pass orders and to hear appeals. The said officers, who are representatives of the Board, are thus statutorily entitled to deal with the matters and, therefore, the contention of the petitioner deserves to be rejected.

(b) The contract referred to speaks of the Board. The Board is a general term which is represented by its officers in the performance of various duties. The statutory terms and conditions read with Clause 10 of the agreement would clearly mean that the Board represented by such officers referred to in para. 11 are competent to take action. The contention of the petitioner, therefore, deserves to be rejected.

74. The further contention of the petitioner is that Section 39 of the Indian Electricity Act read with Section 48 of the said Act provides for theft and penalty and therefore, action could be taken only under those provisions and not under any other provision. This contention, in my opinion, is also devoid of merit. Section 39 of the Indian Electricity Act deals with offences. Theft of energy is an offence punishable with imprisonment and is dealt with under the said Act. This provision has nothing to do with the extra levy to be collected by the Board in terms of the statutory terms and conditions of supply framed under Section 49 of the Electricity (Supply) Act. In fact, this position has been madeexplicit in Section 48 of the Indian Electricity IAct, which reads as follows:--

'The penalties imposed by Section 39 or Sections 40 to 47 (both inclusive) shall be in addition to and not in derogation of any liability in respect of the payment of compensation or in the case of a licensee, the revocation of his licence, which the offender may have incurred.'It would, therefore, be clearly seen that this contention is also liable to be rejected.

75. For all the foregoing reasons, I am of the view, that the terms and conditions of supply are traceable to Section 49 of the Electricity (Supply) Act, which confers the powers on the Board to fix tariff and to prescribe the terms and conditions of supply. I have already referred to a number of judgments in regard to the scope of Section 49 of the Electricity (Supply) Act, which came up for consideration before the Supreme Court, and the judgments rendered by the Supreme Court, would clearly establish that the present terms and conditions of supply are clearly traceable to Section 49 of the Electricity (Supply) Act. Likewise, I am also unable to accept the contention of the learned counsel for the petitioner that the terms and conditions are wholly unfair and opposed to public policy and as such, ultra vires the Constitution. As already seen, the conditions, which are incorporated in the agreement and signed by both parties, are binding on either of the parties. I am, therefore, not able to declare certain portions of the terms and conditions of supply of electricity as ultra vires the powers of the Board and violative of Article 14 of the Constitution for the reasons recorded in paragraphs supra. Therefore, the petitioner is not entitled for a writ of declaration as prayed for.

76. As already seen, learned counsel for the petitioner and the learned Senior Counsel for the respondents have raised a number of points in the course of arguments and also referred to various decisions in support of their respective contentions. I have already referred to them and considered all the contentions raised by the respective parties.However, one of the very important contention raised by Mr. K. Ravi, learned counsel for the petitioner, which relates to the violation of principles of natural justice and that orders have been passed arbitrarily and in a mechanical manner, deserves to be accepted for the reasons to be given infra. A decision on the above contention would be sufficient for the disposal of this writ petition. In this context, we have to refer to Appendixes VI and VII in order to see how they are invalid. I have already extracted Appendixes VI and VII in paragraphs supra.

77. The show cause notice dated 17-5-1995, which was issued in Appendix VI, reads, thus:

'Appendix -- VI

Show cause notice for theft of energy/unauthorised reconnection of a disconnected service connection.

(Vide Clause 9.05 of the Schedule)

From

Er. S. Jeganjothi, B.E.,

Executive Engineer/ O & M Town,

Thammannachetty Road, Four Roads,

Salem--9.

To

M/s. Annamalai Cotton Mills (P) Limited, Gajalnayakanpatti Village, H.T.SC. 30, Salem Taluk.

Lr. No. EE/O&M;/T/SDM/DM/F. Theft/D. No. 847/95, dated 17-5-1995.

Sir,

Sub: Terms and Conditions of supply of Electricity -- Schedule Part I --Theft of Energy.

Ref: Service connection No. HT SC No. 30, High Tension Tariff I, Dasa-naickenpatty O & M Section.

1. On 11-5-1995 at 4.00 hours the service connection number SF. Nos. 17/2, 17/3, 17/4, 17/5 and 17/6, Trichy Main Road, Gajamayakan patty, which is held in your name was inspected by Assistant Executive Engineer/O & M/Gugai/Salem along with Ami Power Theft Squad and meter relay test branch.

2. Theft of energy in your service connection has been reported.

3. You are hereby called upon to show cause within seven days from the date of receipt of this letter as to why extra levy for the above reference in accordance with the terms and conditions of supply of electricity should not be collected from you.

4. If no reply is received from you with reference to para. 2 above within the time stipulated or if your reply is found not convincing further action to collect the extra levy as per the terms and conditions of supply of electricity will be taken.

5. You are requested to acknowledge receipt of this notice immediately.

Yours faithfully,

Sd/-xx xx

Executive Engineer, O. & M.,

Town, Salem -- 9.'

78. The petitioner sent a detailed reply on 21-5-1995 stating that the notice of theft of energy conveys no definite meaning and that it does not specify the name and designation of the officer who had made such a report. It also does not specify the manner in which the alleged theft of energy was stated in such report to have been effected, and as such, it is stated that the statement in the impugned notice is very vague and general. The petitioner has further denied such allegation and according to them, there was no theft of energy in their service connection. It is also mentioned in paragraph 5 of the reply that the Board has not forwarded to the petitioner the alleged report mentioned in paragraph 2 of their notice and, therefore, they are not able, to give any specific answer in this regard, especially when they have not even summarised the contents of such report and when they have not even chosen to indicate whatwas found at the time of the alleged inspection by the Asst. Executive Engineer or the Anti Power Theft Squad suggestive of the possibility of there having been some theft of energy. It was also alleged in the reply that theproposed action is motivated, vindictive and mala fide and, therefore, the petitioner requested the respondent/Board to give apersonal hearing before they proceed further in any manner in this matter. The petitioner has further stated in the reply that intimation of the date and venue of such personal hearing may kindly be sent to the petitioner by registered post with acknowledgment due so as to reach the petitioner at least 15 days prior to the date which the respondent/Board might fix for such personal hearing.

79. On 2-5-1995 (sic) the 3rd respondent passed the following impugned order:--

'Assessment notice for TNEB of energy Tamil Nadu Electricity Board Letter No.SEDC/ Sim/ AEE.G.1/ AE1/F-TTA/ (1)/95-96/ PR 240/95, dt. 26-5-1995.

From

Er. S. Somasundaram, B.E., M.I.E.,

Superintending Engineer, Salem

Electricity, Distribution Circle, Salem.

To

M/s. Annamalai Cotton Mills (Private)Limited,

Gajalnayickenpatty Village,

HT.SC.No.30/TF--I,

Salem.

Through Assistant Executive Engineer/GJ/ Gugai.

Sub: Terms and Conditions of supply of Electricity -- Schedule Part-I --Theft of energy -- Assessment Notice Issued -- Reg.

Ref: i. Theft case detected on 11-5-95.

ii. Show cause notice of EE/O&M;/ Town Salem -- Vide Lr. No. EE/ O&M;/T/Slm/DM/F. Theft/ D. No. 647/ 95, dated 17-5-1995.

iii. Your Letter dt. 21-5-1995.

On examination of your representation with reference to the information available, it is found that the following has been committed in your service connection.

'Theft of energy'

2. The extra levy payable by you for the energy stolen is worked out as Rupees 9,43,87,324/- (Rupees nine crore, forty three lakhs, eighty seven thousand, three hundred and twenty four only). The working sheet is enclosed.

3. You are hereby called upon to pay the extra in one lump sum. The extra levy should be paid on or before 9-6-1995. If you fail to pay the above amount before 9-6-1995 the service connection will be disconnected.

4. If you choose to prefer an appeal against this order, you may appeal to the Appellate Authority viz., Chief Engineer/Distribution/ Salem Region at Erode within sixty days from the date of receipt of this notice after paying the extra levy.

You are requested to acknowledge the receipt of this notice immediately.

Yours faithfully,

Sd/ xx xx

Encl; Working Sheet

Superintending Engineer.'

80. No personal hearing seems to have been afforded to the petitioner. The impugned order appears to have been passed on an examination of the representation made by the petitioner. Working sheet was also enclosed along with the order imposing extra levy payable by the petitioner for the energy stolen, at Rs. 9,43,87,324/-. According to the learned counsel for the petitioner, the impugned order is in total violation of all principles of natural justice. He invited my attention to the judgment of P. S.Mishra, J., as he then was, in W.P. No. 125 of 1990 dated 19-12-1990. That was a case of an identically worded order and in identical circumstances and based on an identically worded show cause notice as in the present case. P. S. Mishra, J., condemned both the show cause notice and the order as being violalive ofprinciples of natural justice and quashed them at one stroke.

81. In that case, two contentions were raised before the learned Judge, that the notice calling upon the petitioner to show cause was vague and that the impugned order has not been passed in accordance with the principles of natural justice. Similar contentions were also raised by the learned counsel for the petitioner herein at the time of hearing. It is useful in this context to extract the observations made by the learned Judge in that case. It runs thus:

'It will be repeating one of the oft-quoted statement of law that any person who is subjected to a certain action which if implemented, would visit him with civil conse-' quences, must be given an opportunity of being heard, that the person who caused such a hearing is not infected by any sort of bias and that the cause shown receives a fair consideration in the sense that it is stated' in the order why the cause shown is not accepted. Any act of a person in authority, which visits some one with civil consequence has to be exercised quasi judicially.'82. The decision reported in Siemens Engineering and Manufacturing Co. v. Union of India : AIR1976SC1785 has stated the law in the following words:--

'It is incontrovertible that the proceedings before the Assistant Collector arising from the notices demanding differential duty were quasi judicial proceedings and so also were, the proceedings in revision before the Collector and the Government of India. Indeed, this was not disputed by the learned counsel appearing on behalf of the respondents. It is now settled law that where an authority makes an order in exercise of a quasi judicial function, it must record its reasons in support of the order it makes. Every quasi judicial order must be supported by reasons. That has been laid down by a long line of decisions of this Court ending with N. M. Desai v. Testeels Ltd. C. A. No. 245 of 1970 decided on 17-12-1975 (SC). ...... If Courts of law are to bereplaced by administrative authorities and tribunals, as indeed, in some kinds of cases,with the proliferation of Administrative Law, they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons, sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunal exercising quasi judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicato'ry process. The rule requiring reasons to be given in support of an order is like the principle of audi alterarn partem, a basic principle of natural justice which must inform every quasi judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirements of law.'83. It is thus seen from the above judgment that where an authority makes an order in exercise of a quasi judicial function, it must record its reasons in support of the order it makes and that every quasi judicial order must be supported by reasons. In the instant case, the 3rd respondent, who passed the impugned order, has not recorded his reasons in support of the order. Therefore, it is clear that the impugned order has been passed in violation of the principles of natural justice and that it is without jurisdiction. The show cause notice is also as vague as any notice can be since it only states that the petitioner's service connection was inspected and theft of energy was reported. Such a notice as rightly pointed out by P. S. Mishra, J., as he then was, in W.P. No. 125 of 1990, can be answered only by a bald denial. The notice itself, therefore, has to be quashed for the reason of vagueness. As no one can be condemned unless he is given full and adequate opportunity of being heard, issue of notice calling upon to show cause is always the first step in that direction. I am, therefore, of the view that the show cause notice as well as the impugned order are bad in law as they both violated the basic principle of natural justice. I am unable to accept the contention of Mr. R. Krishnamurthi, learned Senior Counsel for the respondents, that an alternative remedy before any executive or quasi judicial authority, when available, is a bar tothe jurisdiction of this Court in entertaining this writ petition. I am of the view that when an order is found to have been passed in violation of the principles of natural justice, the affected parties are always at liberty to knock at the door of this Court for redressal of their grievance.

84. It is stated that the above judgment of P. S. Mishra, J, become final and was subsequently followed by Reveared brother J. Kanakaraj, J., in P. Subramaniam v. The Asst. Divisional Engineer 1994 WLR 197. That writ petition was filed challenging the demand and levy of consumption charges for electricity estimated on the basis of theft of electrical energy for one year prior thereto and that the so-called appellate order did not say anything except that the appeal was considered carefully and the amount was calculated in accordance with the Board's Regulations. Besides the reasons given in W.P. No. 125 of 1990 by P. S. Mishra, J., as tie then was, J. Kanakaraj, J., has also given the additional grounds on which the impugned orders before him were liable to be set aside.

85. In my opinion, the present case is squarely covered by these two decisions of this Court. The decisions reported in Lal Babu Hussain v. Electoral Registration Officer AIR 1995 SCW 1254 and Shreejee Plastics v. The Karnataka Electricity Board : AIR1995Kant157 are illustrative of the above proposition. In this case, the show cause notice is bald and vague. The alleged report was not sent with it or even subsequently furnished to the petitioner despite the petitioner demanding the same in their reply. In the decision reported in 1995 AIR SCW 1254 cited supra, the Supreme Court has clearly held that not granting such report vitiates the order. The observations of the Supreme Court in that decision run thus;

'If the opportunity of being heard before deletion of the name is to be a meaningful and purposive one, the concerned person whose name is borne on the roll and is intended to be removed must be informed why a suspicion has arisen in regard to his status as a citizen of India so that he may be able to show that thebasis for the suspicion is ill-founded. Unless the basis for the doubt is disclosed, it would: not be possible for the concerned person to remove the doubt and explain any circumstance or circumstances responsible for the doubt.'86. In Shreejee Plastics v. The Karnataka Electricity Board : AIR1995Kant157 the Karnataka High Court has held that the parties have to be furnished with whatever material sought to be relied upon by the officials concerned including the copy of the mahazar, if any, report of any spot enquiry, etc., in order to enable the consumer to file objections to the proposed action of the authority.

87. Passing of a non-speaking order like the present one has been condemned by the Supreme Court in several decisions and in all cases, the non-speaking orders were quashed on the sole ground of their being non-speaking orders. The decisions reported in Commissioner of Police, Bombay v. Gordhandas Bhanji : [1952]1SCR135 ; The Siemens Engineering and . v. Union of India : AIR1976SC1785 ; Mohinder Singh Gill v. The Chief Election Commissioner, New Delhi : [1978]2SCR272 ; Union of India v. Mario Cabral e Sa : AIR1982SC691 ; and Jamat-e-Islami Hind v. Union of India : (1995)1SCC428 and a recent decision of the Andhra Pradesh High Court in : AIR1995AP17 , are some of the instances where non-speaking orders were quashed on that ground alone. Moreover, no enquiry was conducted in the present case before the impugned order was passed levying a huge penalty of about Rs. 9.5 crores on the petitioner, though in an idential case, where without any such enquiry an Electricity Board of another State held that a consumer was guilty of theft of energy and disconnected supply to such consumer, the Supreme Court confirmed the decree for restoration of supply ruling that without a full-fledged trial, an accusation of theft of energy cannot materialise into a finding-vide the decision in Municipal Corporation of Delhi v. M/s. Ajanta Iron and Steel Company (Pvt.) Ltd. : [1990]1SCR733 .

88. In this case, it is not even the case of the respondents that any enquiry or even a semblance of enquiry was conducted before the impugned order was passed. Though in reply to the show cause notice the petitioner had asked for a personal hearing, without, granting such hearing and within about three days from the date of receipt of such reply, the 3rd respondent has passed the impugned order with undue haste. A Division Bench of this Court in P.M.G. Rathinammal v. The Superintending Engineer ILR 1995 Mad 161 held that even in an appeal against such an order, not granting a personal hearing would vitiate the proceedings. The Bench has observed as follows:--

'Deciding the appeal on perusal of the records, without giving personal hearing by a quasi judicial authority cannot be the same as deciding the appeal on personal hearing and each makes a world of difference.' To the same effect is the decision of the Karnataka High Court in M/s. Southern Steelmet and Alloys Ltd., Bangalore v. Karnataka Electricity Board : AIR1991Kant267 . Thus, in my opinion, all the principles of natural justice have been deliberately flouted in this case. Time and again Courts have held that when there is violation of natural justice, orders are quashed under Article 226 of the Constitution in spite of the affected party not pursuing the alternative remedy of departmental appeal.

89. Even though a contention, was raised by Mr. R. Krishnamurthi, learned Senior Counsel for the respondents, that the propositions referable to the validity of the show cause notice, validity of the final order and matters relating to reconnection are covered by the judgment of R. Jayasimha Babu, J., in W.P. Nos. 11039, 11040 and 11042 of 1995, which is binding on the petitioner and as such, the petitioner cannot be allowed to urge all those contentions in this writ petition, I am unable to countenance the said contention. When there is a clear violation of the principles of natural justice and when the same is brought to the notice of this Court in the pleadings and also at the time of hearing, thisCourt is not expected to be a silent spectator. This Court exercising its power under Article 226 of the Constitution can grant the prayer as prayed for or mould the same depending upon the circumstances and the subsequent events. It is true that the petitioner has ill-advisedly approached the Civil Court, filed a Civil Miscellaneous Appeal, moved a Letters Patent Appeal, etc., etc. While rejecting the appeals etc., the Hon'ble First Bench of this Court has left open all the contentions raised to be decided at a later stage. Same is the order in the Writ Appeal also. Therefore, I am of the view, that the petitioner has a right to urge the contentions not only with reference to the constitutional validity of the terms and conditions of supply of electricity but also the show cause notice and the order passed by the 3rd respondent, as violative of the principles of natural justice and, therefore, liable to be quashed.

90. For the foregoing reasons, the impugned show cause notice issued by the 2nd respondent in Lr. No. EE/O & M/T/SDM/ DM/F. Theft/D. No. 847/95, dated 17-5-1995 and the order passed by the 3rd respondent in Letter No. SEDC/Slm/AEE. G.1/AE1/F. TTA/(1) /95-96/PR 240/-95, dated 26-5-1995, are quashed. The writ petition is ordered accordingly. However, there will be no order as to costs.

91. Order accordingly.