Judgment:
ORDER
R.V. Raveendran, J.
1. The electrical installation at petitioner's unit at Belgaum bears the R.R.No. M.62/75. On 29/30.7.1993, the said electrical installation was inspected and rated by the officials of the Karnataka Electricity Board. They found that the meter was recording 50.4% slow, as per Inspection report dated 30.7.1993 (Annexure A) furnished to petitioner. The petitioner endorsed on the said report that it was not accepting the report and also filed its objections, contending that it will not accept any back billing claim. Again the electrical installation was inspected on 20.9.1993 and a report dated 20.9.1993 was issued to the petitioner stating that the meter was recording 51.99% slow. The petitioner filed its objections dated 21,9.1993 and requested that the dispute be referred to the Electrical Inspector for decision. Thereafter, the Board issued a back billing claim notice dated 27.9.1993 (Annexure E) stating that a sum of Rs. 57,370.65 is due on account of back billing on account of revising the bills for the period 25.11.1987 to 20.9.1993 on account of slow recording of the meter as a consequence of improper connection of CTS. By the said notice, KEB also called upon the petitioner to deposit the said sum with the Electrical Inspector within seven days under Section 24(2) of the Indian Electricity Act, 1910 ('the Act' for short). Petitioner was also informed that if it failed to do so, the electricity supply to the installation wilt be disconnected.
2. Petitioner contends that where the Board claims that the meter was recording slow and makes any revised demand in that behalf, the Board cannot require deposit under the proviso to Section 24(2) of the Act. Petitioner further contends that where Board alleges slow recording, it has to refer the dispute relating to the claim on account of such slow recording to the Electrical Inspector and until a decision is rendered by the Electrical Inspector under Section 26(6) of the Act, the consumer will not become liable to make any additional payment. The petitioner has therefore filed this petition challenging the demand for pre-deposit and has sought quashing of the demand Annexure-E dated 27.9.1993.
3. The Board does not deny that the dispute relating to a claim relating to slow recording has to be referred to the Electrical Inspector under Section 26(6) of the Act, for his decision. The Board, however, contends that in regard to all disputes which are referred or referable to the Electrical Inspector, the Board can demand deposit of the disputed amount by the consumer with the Electrical Inspector and if the consumer fails to comply, discontinue the supply of electricity. Reliance is placed by the Board on a Division Bench decision of this Court in H.M.P. CEMENTS LIMITED v. KEB,W.A. No. 306/1994 DD 16.03.94 and a decision of a learned single Judge in P.C.GEORGE v. CHIEF ELECTRICAL INSPECTOR TO THE GOVERNMENT OF KARNATAKA, W.P. No. 21354/1989 DD 6.12.89. Reliance is also placed on the decision of the Allahabad High Court in S.E.BOARD v. PRAKASH TALKIES, : AIR1977All460 and the decision of the Andhra Pradesh High Court in ANDHRA CEMENT CO. LTD., v. STATE ELECTRICITY BOARD, : AIR1991AP269 .
4. The question that arises for consideration is, where the Board makes a claim on account of slow recording of the meter (in addition to the charges already paid on the basis of the meter reading) and the dispute has been referred or proposed to be referred, to the Electrical Inspector for his decision under Section 26(6), whether the Board is entitled to require the consumer to deposit with the Electrical Inspector, the amount so claimed, and disconnect the supply of electricity, if such amount claimed, is not deposited.
5. Before considering the rival contentions, it is necessary to refer to the relevant provisions of the Act.
5.1. Section 26 of the Act deals with Meters. Sub-section (1) provides that the amount of energy supplied to a consumer or the electrical quantity contained in the supply shall be ascertained by means of a correct meter in the absence of any agreement to the contrary. Sub-section (6) of Section 26 of the Act provides for decision by Electrical Inspector, on differences and disputes between the licensee (Board) and the consumer. The relevant portion of Sub-section (6) is extracted below:-
'Where any difference or dispute arises as to whether any meter referred to in Sub-section (1) is or is not correct, the matter shall be decided, upon the application of either party, by an Electrical Inspector; and where the meter has, in the opinion of such Inspector ceased to be correct, such Inspector shall estimate the amount of the energy supplied to the consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct, but save as aforesaid, the register or the meter shall, in the absence of fraud, be conclusive proof of such amount or quantity;
5.2. Section 24 of the Act deals with discontinuance of supply to consumer who neglects to pay the charges. The said Section is extracted below for ready reference:-
'24. Discontinuance of supply to consumer neglecting to pay charges:-
(1) Where any person neglects to pay any charge for energy or any sum other than a charge for energy, due from him to a licensee in respect of the supply of energy to him, the licensee may, after, giving not less than seven clear days' notice in writing to such person and without prejudice to his right to recover such charge or other sum by suit, cut off the supply and for that purpose cut or disconnect any electric supply-line or other works, being the property of the licensee, through which energy may be supplied, and may discontinue the supply until such charge or other sum, together with any expenses incurred by him in cutting off and reconnecting the supply, are paid, but no longer.
(2) Where any difference or dispute which by or under this Act is required to be determined by an Electrical Inspector, has been referred to the Inspector before notice as aforesaid has been given by the licensee, the licensee shall not exercise the powers conferred by this section until the Inspector has given his decision; Provided that the prohibition contained in this sub-section shall not apply in any case in which the licensee has made a request in writing to the consumer for a deposit with the Electrical Inspector of the amount of the Licensee's charges or other sums in dispute or for the deposit of the licensee's further charges for energy as they accrue, and the consumer has failed to comply with such request.'
6. It is evident from Sub-section (1) of Section 24 that where any person neglects to pay any charge for energy or any other sum due from him to the Board in respect of supply of energy to him, the Board may after giving seven clear days notice, cut off the electricity supply. Sub-section (2) of Section 24 however provides that the power to cut off electricity under Sub-section (1) shall not be exercised by the Board where any difference or dispute between the Board and the Consumer is required to be determined by the Electrical Inspector under the Act, until the Inspector gives his decision on the dispute/ difference. The proviso to Sub-section (2), provides that the Prohibition against exercise of the right of cutting off electricity by the Board for non-payment of dues contained in Sub-section (2) shall not apply where the Board has made a request in writing to the consumer for deposit with the Electrical Inspector, of the amount in dispute or for further charges for energy as they accrue. The proviso to Sub-section (2) applies to the claims referred to in Sub-section (2) and Sub-section (2) applies to the cases which are referred to in Sub-section (1). Sub-section (1) applies where any charge or other sum is 'due' to the Board, In other words the power under Sub-section (1) can be exercised by the Board only in regard to amounts which are 'due' to the Board and not to claims which are yet to be assessed by the competent Authority. Consequently Sub-section (2) and the proviso to Sub-section (2) also are applicable only in regard to amounts that are 'due' by the consumer to the Board.
7. The next aspect that arises for consideration is whether any amount can be said to be 'due' by the consumer to the Board where the Board estimates the extra consumption on account of alleged slow recording of the meter and makes a back billing demand for additional charges in that behalf. If the amount is claimed for the energy shown as consumed, as per the meter, the amount will be 'due' having regard to Section 26(1) of the Act. But, if the amount claimed is not on the basis of the meter reading, but on account of an estimate made by the Board on the ground that the meter reading is not correct on account of slow recording, then the claim for additional amount, is not an amount due, but an estimate by the Board, which will become due only after assessment by the Electrical Inspector under Section 26(6). The Courts have always recognised the difference between ascertained sums presently due and claims which do not become amounts 'due', until the liability is adjudicated and assessed by a Court or prescribed Authority. Where the Board alleges that the Meter Reading does not reflect the true consumption and that the true consumption is more than what is shown in the meter and makes a claim on the basis of an estimate of the actual consumption, the consumer does not 'co instanti' incur any liability, nor does the Board become entitled to the said estimated amount, until there is a determination of the amount of the energy supplied or the electrical quantity contained in the supply, under Section 26(6) of the Act. The word 'due' always refers to a fixed and settled obligation or liability. The use of the word 'due' in Section 24(1) makes it clear that the power of disconnection can be exercised only for non payment of what is owing and not what would become payable on a decision by the Electrical Inspector.
8. The Supreme Court in M.P.E.B v. BASANTIBAI, : [1988]1SCR890 held that a dispute as to whether the meter is or is not correct or whether the meter is defective or faulty not recording the actual electrical energy consumed, can be decided by only the Electrical Inspector under Section 26(6) of the Act. The Supreme Court held:
'...In the instant case the dispute relates to whether the meter is correct one or it is faulty not recording the actual energy consumed in running the oil mill of the respondent. So this dispute squarely falls within the provisions of the said Act and as such it has been rightly found by the High Court that it is the Electrical Inspector who alone is empowered to decide the dispute. If the Electrical Inspector comes to the finding that the meter is faulty and due to some defect it has not registered the actual consumption of electrical energy, then the Inspector will estimate the amount of energy consumed and will fix the amount to be paid in respect of such energy consumed within a period not exceeding six months, The appellant No. 1 is not competent. pending the determination of this dispute by the Electrical Inspector, to issue the impugned notice threatening disconnection of supply of electricity for non-payment of supplementary bill prepared and sent by it. The Board is also not competent to prepare and send a supplementary bill in respect of energy consuming by the respondent from the one phase which stopped functioning and did not record any consumption of energy...'
(emphasis supplied)
8.1. Following the said decision, this Court in TOPASA v. KEB,1989(1) Kar.L.J. 81 held as follows:
'...The clear effect of the aforesaid decision of the Supreme Court is that in matters of slow or faulty recording of the meter it is only the Electrical Inspector who is authorised to decide the dispute. If the meter is not working properly, that is undoubtedly a dispute and this dispute has to be decided by the Electrical Inspector. Therefore, if the Electricity Board wants to raise a bill in regard to the actual consumption of energy not correctly recorded by the meter, it has to approach the Electrical Inspector and get the same tested and settled...'
8.2. On appeal from the said decision, a Division Bench of this Court held in KEB v. TOPASA, : ILR1991KAR909 as follows:
'...In our opinion, when Sub-section (6) of Section 26 of the Act says that either of the party is at liberty to raise a dispute before the Electrical Inspector it means the party aggrieved is entitled to raise a dispute. Naturally in the case of under-recording, it would be the Board which is the aggrieved party and therefore in such cases, it is for the Board to raise a dispute before the Electrical Inspector and have the matter decided if it wants to make back billing to the extent the Board's income was reduced on account of fault in the meter. In cases where the complaint is that the meter is over-recording naturally consumer would be the adversely affected party and therefore it is for him to raise a dispute before the Electrical Inspector under Sub-section (6) of Section 26 of the Act, in order to have the amount of the bill reduced. It is of course open to the parties not to raise dispute. For instance in cases where there is under-recording if the consumer is satisfied that the meters having been tested in his presence, that actually the meter was under-recording, even without raising a dispute, he might agree for paying the difference. If he does so, thereafter, he cannot object for the same as by such conduct he gives up his right to raise a dispute under Sub-section (6) of Section 26 of the Act. Similarly even in cases of over-recording if the authorities of the Board are satisfied that the meter was defective and it was over-recording, even without compelling the consumer to raise a dispute before the Electrical Inspector, the authorities themselves may fairly concede the fact that the meter was over-recording and given relief to the consumer. In such a case also the question of raising a dispute does not arise as that also amounts to waiver of the rights to raise a dispute, Unless there is such settlement amicably in cases of under-recording it is for the Board, and in cases of over-recording it is for the consumer, to raise the dispute before the Electrical Inspector. Once such dispute is raised the solidification of the bill should await the decision of the Inspector...'
(emphasis supplied)
9. Thus where a dispute is raised by the consumer on the ground that the meter is faulty and is recording excessively, the Consumer challenges the bills raised by the Board as per the meter recording, as being excessive and therefore not actually due. But, as the Board can bill the consumer for the consumption recorded as per the meter, electricity charges 'become due' to the Board and, therefore, Section 24(1) and consequently Section 24(2) and the proviso to Section 24(2) will apply. In such a case, i.e., where a dispute arises on account of the consumer contending that the recording is excessive, there can be no doubt that the Board can in exercise of its powers under the proviso to Section 24(2) can demand that inspite of the dispute raised by the consumer, that part of the bill amount which is the amount in dispute should be deposited with the Electrical Inspector.
10. The position is not however the same where the dispute relate to a claim of the Board alleging slow recording of the meter. Where the recording is slow, the Board does not claim the amount as per the meter recording. The dispute will not be with regard to the amount that will be claimed on the basis of the meter recording. The dispute will be in regard to a claim made on the basis of a deemed consumption which is estimated by the Board. Thus, in the case of alleged slow recording, the back billing claim of the Board is not on the basis of the meter reading, but on the basis of an estimate as to the actual consumption. It is evident from the decisions in BASANTI BAI and TOPOSA, referred to above, that in the case of alleged slow recording, the Board is not competent to prepare and send a supplementary bill in respect of the estimated energy consumed by the consumer, but is entitled to send a bill for energy consumed in accordance with the meter reading. If the Board is not entitled to send a bill worked out on the basis of deemed consumption until the Electrical Inspector determines the amount under Section 26(6) of the Act, it follows that the amount will not become 'due', and therefore neither Sub-section (1) nor the proviso to Sub-section (2) of Section 24 of the Act will apply. Section 24(1) of the Act applies only where a person neglects to pay any charge for energy or other sums 'due' from him that is an amount which can be validly and legally demanded and recovered by the Board. Where an amount becomes due only on determination of the Electrical Inspector, it cannot be said to be an amount due to the Board. Thus, if a back billing claim on account of slow recording is made, it remains merely a claim and not an amount due until determination by the Electrical Inspector, and in regard to such a claim Section 24(1) of the Act will not apply. If Section 24(1) is not applicable, it follows that Section 24(2) will not apply and if Section 24(2) will not apply, the proviso thereto will also not be applicable.
11. Therefore, the Board can make a demand under proviso to Section 24(2), for deposit of the amount in dispute which requires to be decided by the Electrical Inspector, only where the dispute relates to excess recording and not in regard to cases where the dispute relates to slow recording.
12. The decision of the Division Bench in H.M.P. Cements relied on by the Board is inapplicable as the case related to a dispute raised by the consumer and involved a dispute relating to excess recording and did not relate to a case of slow recording. The decision in GEORGE'S case relied on by the Board is also inapplicable, as the question involved in this petition, never arose for consideration in that case. In that case the matter was pending before the Electrical Inspector and when the case was taken up, the Counsel for the Electrical Inspector stated that he will decide the dispute within a period specified by the Court. Therefore, this Court straightaway held that the matter should be decided by the Electrical Inspector within two months. The Court did not go into the question whether the demand for deposit under the provision to Section 24(2) related to a claim on the basis of excess recording or a claim on account of slow recording. As there was no occasion for this Court to examine that aspect and as the said question did not arise at all for consideration, the said decision is of no assistance. The said decision is also not in consonance with BASANTI BAI or TOPOSA. The decisions of Allahabad and Andhra Pradesh High Courts lay down the principle that once the proviso to Section 24(2) of the Act is applicable, the consumer is bound to deposit the amount. There is no dispute in regard to the said proposition. But the question for consideration in this case is whether the proviso to Section 24(2) will apply at all. Hence, these decisions are not relevant.
13. In view of the above, this petition is allowed and Annexure-E dated 27.9.1993 in so far as it directs the consumer-petitioner to deposit the disputed amount under Section 24(2) of the Indian Electricity Act, 1910 with the Electrical Inspector is quashed. The remaining portion of the letter dated 27.9.1993 is treated as a claim notice and as the claim has been disputed by the petitioner, the Board will have to refer the dispute to the Electrical Inspector under Section 26(6) of the Act if it has not already been so referred.