Lohia Mandilia and ors. Vs. C.E.S.C. Ltd. and ors. - Court Judgment

Excerpt:
- orderkalyan jyoti sengupta, j.1. by this single judgment the aforesaid two matters can be disposed of as the facts and law involved therein are identically same. shorn of details of the fact made out in both the writ petitions it would be suffice to narrate the short fact. in both the cases the petitioners, are consumers of m/s. cesc ltd., being the respondent no. 1. on 4th september, 2000 one of the three phases of electric connection of the premises of the petitioners was gutted in fire, as a result whereof, the same was destroyed. on information the cesc officials came to restore the supply line after removing defect occurred due to fire. however, the line was not restored, despite repeated request and representations. on the contrary cesc authorities took a false plea of pilferage of.....

Judgment:
ORDER

Kalyan Jyoti Sengupta, J.

1. By this single judgment the aforesaid two matters can be disposed of as the facts and law involved therein are identically same. Shorn of details of the fact made out in both the writ petitions it would be suffice to narrate the short fact. In both the cases the petitioners, are consumers of M/s. CESC Ltd., being the respondent No. 1. On 4th September, 2000 one of the three phases of electric connection of the premises of the petitioners was gutted in fire, as a result whereof, the same was destroyed. On information the CESC officials came to restore the supply line after removing defect occurred due to fire. However, the line was not restored, despite repeated request and representations. On the contrary CESC authorities took a false plea of pilferage of electric energy, by means of tampering of seals of the meters. So, CESC sent a bill of huge amount for payment as condition precedent for restoration of supply line. The petitioners approached concerned Redressal Forum, under Consumer Protection Act, 1986 without any favourable result, ultimately these writ petitions were filed and pursuant to the interim order the line has been restored. In both the writ petitions the vires of amended conditions of supply, namely Clauses 28, 29, 30 as sanctioned by the Government dated 15th May, 2000 are challenged. By the aforesaid conditions of supply CESC has been empowered amongst others to disconnect supply line without any notice in suspected cases of pilferage, and realize un-metered consumption of electric energy by pilferage and other charges. Upon proper examination of the body of the petitions I find there is no specific ground in the petition filed in Original Side writ to challenge the vires of the aforesaid conditions of supply, however, in the petition of the Appellate Side the grounds are there. As both the matters are being heard in consolidated manner, I have no option but to decide all the questions raised in both the petitions. The affidavit-in-opposition reveals fact somewhat differently, as it is stated that the petitioners had resorted to the clandestine act of pilferage of electric energy thereby, the petitioners have allowed electric energy to be consumed without any registration in the meter. Incident of breaking out of the fire in one of the phases was mere an isolated incident, but this incident was really an eye-opener to the CESC officials for detection of this pilferage of electric energy.

2. Mr. Pradip Kumar Ghosh, learned Senior Advocate appearing in support of the petition has argued the case on the question of vires. So, I cannot help to consider his submission, which is summarized as hereunder :

He submits that the aforesaid Clauses 28, 29, 30 have overridden the expressed provision of the statute under which conditions of supply have been framed and the same cannot be allowed to be done under the law as such they are bad in law. He submits that the aforesaid conditions of supply are not at all necessary even if it is assumed the same are valid, inasmuch as the existing provisions in the Act and Rules are quite adequate to meet any eventuality or situation even in case of theft of electric energy or for that matter in case of disconnection of supply line where the consumer commits default or commits breach of the terms and conditions of the supply. He has drawn my attention to Section 20 of the Indian Electricity Act, 1910, which authorize the licensee to inspect, test, repair meter or meter fittings and for this purpose the licensee can have access upon prior intimation to the occupier to inspect the electrical installation and metering system. For this, if necessary, the licensee can procure the order of Magistrate for entering the premises after giving not less than 24 hours' notice and even the line can be cut off if the entry or access is refused by the consumer. He contends that under provision of Clauses 28. 29 service of prior notice has been done away with. So, according to him this dispensation of service of prior notice is really conflicting with the statutory provision for service of prior notice. Thus this provision ultra vires the Act, so far as it relates to service of prior notice is concerned.

3. He contends further that by virtue of Sections 39-44 and 50 of the Indian Electricity Act, 1910 cases of theft and pilferage can effectively and comprehensively be dealt with for which no separate provision for adjudication of dispute by in-house procedure under Clauses 29 and 30 is necessary. The Act does not contemplate for formation of such in-house tribunal for adjudication of dispute as regard theft and pilferage of electric energy.

4. The mechanism provided in the aforesaid conditions of supply, he contends, is wholly unreasonable, arbitrary and contrary to the expressed provision of the statute. He submits, that the CESC's own officials are appointed as adjudicating authority to assess un-metered consumption and there is every chance and likelihood of biased judgment being rendered in this procedure. These conditions of supply incorporated in the contract of supply are unreasonable, arbitrary and one-sided and clearly violatlve of principle of Nemo judex in Causa Sua (No man shall be a Judge in his own cause). In support of his contention he has relied on the decisions of the Supreme Court reported in : (1985)IILLJ206SC . On the question that terms of contract are liable to be struck down as being unfair and unreasonable where such contract is concluded in unequal bargaining power of the parties thereto. The decision of the Supreme Court reported in AIR 1985 SC 1416 (paragraphs 76-78), AIR 1986 SC 1571 is cited by Mr. Ghosh on the proposition that the Court has to determine whether a particular policy decision is fair, just and not irrational, so much so it may not give rise to question of Wednesbery's principle of unreasonableness nor suffers from procedural Impropriety. He has also relied on the other decisions namely : (1991)ILLJ395SC , : AIR1995SC1811 and 2001 Cal WN 396, which in my view are not of much relevance.

5. Mr. Anindya Kumar Mitra, learned Senior Advocate appearing with Mr. P.K. Roy, Senior Advocate counters submission of Mr. Ghosh as saying there is no specific allegations with particulars in the petition to challenge the vires of the aforesaid conditions of supply. The submission aiming at to challenge the vires has been made from the bar. In absence of such specific and particular allegations in the petition this argument should not be entertained. Any legislation, whether subordinate or supreme cannot be struck down and/or quashed on the vague allegation. He contends further that pursuant to post-disconnection notice the petitioner made representation to the authorized officers under conditions of supply, impugned here, and the authorized officers upon hearing the petitioners have adjudicated the same and quantified the bills for unmetered consumption. In the conditions of supply there is provision of appeal, which could have been availed of by the petitioners in this case, but they had chosen not to do so. They had approached Calcutta District Consumer Redressal Forum, and not having been able to obtain any favourable order, the present writ petition has been filed. Therefore, the petitioners are estopped from challenging the action of the CESC under conditions of supply as the petitioners have acted thereupon. He contends, in any event, in order to meet the arguments of the learned Counsel for the petitioners on the question of vires or constitutional validity and propriety of the said conditions of supply that there is no mention of any Section of the Indian Electricity Act, which is said to be inconsistent with Clauses 29, 30 nor there is any mention of any provision of the Constitution, which is violated by the said conditions of supply.

6. His further contention is that if actions under the conditions of supply were violative of the provisions of the Constitution of India the conditions of supply would not, therefore, become violative of the Constitution of India. The executive action can be struck down as violative of provision of Constitution of India, but the legislation, under which executive act was done, will not necessarily become violative of Constitution of India.

7. He contends that power of licensee to disconnect supply under Section 24 of the Indian Electricty Act, 1910 cannot be equated with the disconnection of supply line in case of pilferage or suspected case of pilferage and this has been settled by the Hon'ble Supreme Court in Hyderabad Vanaspati case reported in : [1998]2SCR620 and it has been held amongst other in case of suspected pilferage, no prior notice is required to be given. In support of his submission he has referred to a Supreme Court decision reported in : AIR1996SC2258 .

8. He further submits that the action of detection of pilferage stands on a different footing from the routine inspection and action. He contends, in case of pilferage if prior notice of inspection is given, then, all means of pilferage will be concealed. As far as adjudication of dispute in case of tampering of the meter seals, and pilferage is concerned the same are not within the competence of the Electrical Inspector under the provision of Section 26, Sub-section (6). Anyway, in the Act or the Rules there was and still is no provision prior to formulation of this conditions of supply, for adjudication of dispute relating to pilferage of electric energy by means of tampering of body, seals or otherwise. However, the dispute of this nature is required to be speedily resolved. Therefore, the aforesaid mechanism for adjudication of dispute has been provided in the conditions of supply, as a matter of fact almost similar type of adjudicating machinery as in this case, has been approved by the Supreme Court in the above case reported in : [1998]2SCR620 .

9. He contends that under Section 21(2) of the Indian Electricity Act, .1910 a licensee has been empowered by the Legislature to make conditions of supply consistent with said Act or Rules made thereunder. Similar power has been given to the Board under Section 49 of the Electricity (Supply) Act, 1948. However, unlike Board the condition of supply fixed by the licensee required previous sanction of the State Government in the matter of framing of conditions of supply. The aforesaid power of framing conditions of supply is a piece of subordinate legislation. In this case previous sanction of the State Government has been given for framing of the aforesaid conditions of supply and it is given effect upon wide publication and/or circulation in the three newspapers, namely. The Statesman, Bartaman and Biswamitra, moreover the conditions of supply have also been printed on the Electricity Bills.

10. He submits that there is no inconsistency between the Indian Electricity Act, 1910 and amended condition of supply, which have been challenged here. He contends further that principle of natural justice may be excluded expressly or by necessary implication by legislation and exclusion of natural justice is not a ground for holding the subordinate legislation being ultra vires Constitution of India.

11. There is no Article in the Constitution of India providing for compliance with the principle of natural justice. Mr. Mitra has drawn my attention to the Supreme Court judgment, which has been relied on by Mr. Ghosh reported in : (1985)IILLJ206SC and particularly referred to the paragraphs 72, 84, 85, 86, 87 and 97. He argues no legislation either subordinate or otherwise can be held to be void on the ground, of being violative of principle of natural justice, and principle of natural justice is principle of natural law and not part of the Constitution.

12. He further argues placing reliance on the Supreme Court judgment reported in : [1996]3SCR721 , that a piece of legislation can be declared invalid only on two grounds and no other grounds, namely lack of legislative competence and violation of any provision of the Constitution. Violation of natural justice is not a ground for challenging the validity of legislation or subordinate legislation.

13. On the question of apprehension of bias of the hearing officer or the appellate authority, he contends that there is no such allegation in the petition. His further contention is that possibility of arbitrary exercise of power would not make the condition of supply invalid or void. If a particular order under condition of supply is passed arbitrarily, then only order itself can be challenged and in appropriate cases it may be set aside by the High Court but that will not make the conditions of supply invalid. Therefore, he argues that the possibility of exercise of arbitrary power would not make the legislation Invalid. In this context he has referred to a decision of the Supreme Court reported in AIR 1997 SC 729.

14. Having heard respective contentions and considering the materials in these two matters the points for decision are as follows :

(i) Whether after having acted upon pursuant to the conditions of supply by making representation to the officer under Clause 29 of the Conditions of Supply one can challenge the same of its vires or not.

(ii) If so, whether conditions of supply published by CESC on May 15, 2000 is ultra vires Indian Electricity Act, 1910 and also ultra vires Constitution of India and null and void and liable to be struck down.

15. As far as the first point is concerned Mr. Anindya Kumar Mitra, learned Senior Advocate has argued that the petitioners are estopped from challenging the same as having acted upon pursuant to the Clauses 28, 29 and 30 of Conditions of Supply by making representation to the authorized officer who has assessed un-metered electric consumption on account of pilferage, I am unable to accept it as it is settled position of law that principle of estoppel cannot apply as against constitutional provision and the law. Besides, the petitioner had no choice in order to get electricity restored, but to make representation pursuant to the impugned conditions of supply, as the respondent CESC is the monopoly supplier of electricity who had laid down its terms and conditions of its own unilaterally. When a particular action is challenged as being unconstitutional and ultra vires the parent Act, under which the licence has been granted, subsequent challenge against such action is perfectly maintainable though having acted upon pursuant thereto. This legal position is by now well settled by the Supreme Court and various High Courts. Few of which may be quoted.

16. In the decision of the Supreme Court rendered in the case of Central Inland Water Transport v. Brojonath Ganguly reported in : (1986)IILLJ171SC cited at the bar, challenge was accepted as against terms and conditions of service contract even after the same being accepted and acted upon by the workmen concerned. While entertaining such challenge in that case, Supreme Court held amongst other that :

'The Officers of the Corporation challenging the validity of the Rules had no real option when they accepted the appointment with the Corporation when the Company in which they were serving was dissolved by the order of High Court after the High Court approved the Scheme of Arrangement entered into by the Company with the Corporation. They had also no choice in the matter of acceptance of the Rules with the Corporation. They had also no choice in the matter of acceptance of the Rules when they were framed as non-acceptance would have resulted in termination of their services. The Rules in question form part of the contract of employment between the corporation and its employees who are not workmen. These employees had no powerful workmen's union to support them. They had no choice in the framing of the said rules. They had no choice to accept the said rules as part of their contract of employment.......'

17. The aforesaid decision and the principle laid down therein was followed in the subsequent decision of the Supreme Court reported in : AIR1995SC1811 , LIC of India v. Consumer Education & Research Centre as cited by Mr. Ghosh. In this case also even after having acted upon the terms of contract, constitutional validity was allowed to be challenged........................

18. In this case following the aforesaid principle I reject the contention of the respondents that petitioner cannot maintain this writ petition. So, I decide to examine question of vires as raised by the petitioner.

19. In the prayer portion the writ petitioner has challenged the entire condition of supply, which has been published on 15th May, 2000, but at the time of argument the learned counsel Mr. Ghosh had given up the aforesaid challenge excepting against Clauses 28, 29, 30 of the amended conditions of supply. So, I appropriately reproduce the aforesaid clauses of the condition of supply:

'28(a) Where an Officer authorized by the Licensee in that behalf, has reason to believe that the consumer has been or is guilty of malpractice, in respect of use of energy, or pilferage of electricity, he may at any time enter and inspect the installation at the consumer's premises.

(b) If any consumer obstructs or prevents the Licensee's Authorized Officer, or any employee accompanying him, from having access to the installation at the consumer's premises, where there are reasons to believe that the consumer has been or is guilty of malpractice, in respect of use of electrical energy or pilferage of electricity, the Licensee's Officer may cause the supply to be disconnected forthwith, without any notice and keep such supply so disconnected till the consumer affords due facilities for inspection. If such inspection reveals nothing to indicate the commission of any malpractice, or pilferage or electricity, the commission or any malpractice, or pilferage or electricity, the Licensee shall cause the supply to be restored. The Licensee shall not be responsible to the consumer on account of such disconnection.

............................

29 (a) where there is reason to believe that the consumer has been or is guilty of pilferage of electricity, the officer authorized by the Licensee in that behalf may, at any time, enter the consumer's premises and without prejudice to the other rights of the Licensee, cause the supply of electricity to such consumer or premises to be disconnected forthwith without any notice and lodge a FIR with the local Police Station within 24 hours from such disconnection.

(b) Supply shall remain disconnected till such time the means of pilferage are removed to the entire satisfaction of the Licensee and the amount assessed for such pilferage along with the additional Security Deposit, if required and the disconnection and reconnec-tion charges are deposited by the consumer.

(c) The Officer, authorized by the Licensee in that behalf, shall at the earliest opportunity, issue a notice to the consumer giving reasons for disconnection and advising the consumer to make his written representation, if any, within the period specified in the notice.

(d) The Officer authorized by the licensee in that behalf, shall after taking into consideration the written representation of the consumer, or where no such written representation is made, upon expiry of the notice period and upon affording an opportunity of being heard, assess the value of the electrical energy pilfered at penal rate and the quantity of electricity contained therein. The bill of assessment, along with additional Security Deposit, if any, and reconnection and disconnection charges, shall be provided to the consumer at the earliest after expiry of the notice period.

(e) If in the course of assessment of the energy pilfered and the quantity of electricity contained therein the consumer is unable to satisfy the Officer authorized by the Licensee as to the load, hours of daily use, diversity factor load factor, as applicable, and if there be no other reasonable means to affix them the following basis shall apply.

(a) The load shall be taken as highest of;

I) the load observed during inspection

II) the connected load

III) the contractual/sanctioned load

(b) the hours of use as ascertained by the Licensee based on local enquiry/information/reports available or in absence of any such information, 12 hours per day.

(c) A load factor of 0.5.

(f) If in the course of assessment, the consumer is unable to satisfy the Officer authorized by the Licensee in that behalf, as to the period during which pilferage had taken place and in the absence of any other reliable evidence or data available to the Licensee, the period of assessment shall be taken as one year from the date of detection or from the date initial connection, whichever is less.

30(a). The consumer may prefer an appeal to the authority designated by the Licensee, within 30 days of the date of receipt of the assessment bill, mentioned under Clause 29 (d) above. In such a case, if the consumer pays 50% of the amount of the assessment bill, the supply shall be restored pending final disposal, of the appeal.

(b) The Appellate authority shall dispose of the appeal after considering the submission of the appellant. The appellant may be given personal hearing, if he makes such a request, of if the appellate authority so requires.

Provided that if the appellant fails to appear, in spite of giving a reasonable opportunity of being heard, the appellate authority may proceed ex parte and decide the case on merit.

(c) The decision of the appellate authority shall be final and binding on the consumer and the Licensee.

(d) If the appellate authority finds the consumer guilty of pilferage the consumer pay to the licensee, within 30 days of the final appellate order, the amount demanded therein. Failure to pay the amount within the time allowed shall attract Delayed Payment Surcharge and entail disconnection of supply forthwith if the service was restored earlier.'

20. The argument has been advanced that by Clause 28, CESC officials has beenempowered to, at any time, enter and inspect the installation at the consumerspremises without notice in case of consumerhaving been found to be guilty of mal-practice in respect of use of energy or pilferageis contrary to the provision of Section 20 ofthe Indian Electricity Act, 1910, which is reproduced hereunder :

'Power for licensee to enter premises and to remove fittings or other apparatus of licensee.-- (1) A licensee or any person duly authorized by licensee may, at any reasonable time, and on informing the occupier of his intention, enter any premises or land, under, over, along, across, in or upon which the electric supply-lines or other works have been lawfully placed by him for the purpose of-

(a) Inspecting, testing, repairing or altering the electric supply-line, meters, fittings, works and apparatus for the supply of energy belonging to the licensee; or

(b) Ascertaining the amount of energy supplied or the electrical quantity contained in the supply; or

(c) Removing where a supply or energy is no longer required or where the licensee is authorized to take away and cut off such supply, and electric supply-lines, meters fittings, works or apparatus belonging to the licensee.

(2) A licensee or any person authorized as aforesaid may also in pursuance of a special order in this behalf made by Magistrate of the first class or in a presidency-town, by a Presidency Magistrate and after giving not less than twenty-four hours' notice in writing to the occupier-

(a) enter any premises or land referred to in Sub-section (1) for any of the purposes mentioned therein;

(b) enter any premises to which energy is to be supplied by him, for the purpose of examining and testing the electric wires, fittings, works and apparatus for the use of energy, belonging to the consumer.

(3) Where a consumer refuses to allow a licensee or any person authorized to enter his premises or land in pursuance of the provisions of Sub-section (1) or Sub-section (2), when such licensee or person has so entered, refuses to allow him to perform any act which he is authorized by those sub-sections to perform, or fails to give reasonable facilities for such entry or performance, the licensee may, after the expiry of twenty-four hours from the service of a notice in writing on the consumer, cut off the supply to the consumer for so long as such refusal or failure continues, but for no longer.'

It is submitted that under Section 20 the officials of the licensee can enter any premises to which energy is or has been supplied for Inspecting, testing the electric supply lines, meters, fittings after giving proper notice. Therefore, by these new conditions of the supply, requirement of service of prior notice and/or intimation for the purpose of inspecting any meter as contained in Section 20 has been done away with as being contrary to and inconsistent with the provision of the said Act.

21. I find provision for inspection of premises in the Clauses 28 (a) and 29 (a) of conditions of supply is slightly inconsistent with the provision of Section 20 of the Act of 1910 inasmuch this Section enables the licensee to inspect the premises at any reasonable time and upon information for amongst other the same purpose as it is required in Clauses 28 (a) and 29 (a) of the condition of supply while in the conditions of supply it is mentioned 'at any time' meaning thereby even at midnight inspection may be taken. So, adjective 'reasonable' employed in Section 20 of the Act has been used sensibly. Therefore, the words in the Clauses 28 (a) and 29 (a) 'at any time' should be read down as 'at any reasonable time' to bring about consistency with Section 20. In the Clauses 28 (a) and 29 (a) there is no mention of informing the occupier before inspection, so it should also be read down as 'on informing the occupier' in order to bring conformity again with the Section 20 of the said Act, as the licensee, cannot make any condition of supply inconsistent with this Act 1910, if it is not read down then some degree of vagueness will be Inevitable to construe the aforesaid two portion of conditions of supply inconsistently with the Section 20(1)(a) of the Act 1910 by this time it is now settled principle of law if upon reading one portion of legislation is found to be unconstitutional and another to be constitutional and the offending portion cannot be separated, then the legislation instead of striking down as a whole should be read down meaningfully and suitably keeping in view of object of such legislation. Therefore, I hold that the aforesaid Clauses 28 (a) and 29 (a) excepting the portion as above as read down, are neither invalid nor contrary to provision of Section 20 of the said Act.

22. The contention of Mr. Ghosh that the disconnection of the supply line of the consumer without notice in a suspected case of pilferage or theft of electric energy is as being contrary to provision of Section 24 in my view is no longer res intrega. The Supreme Court in the case of Hyderabad Vanaspati Ltd. v. Andhra Pradesh State Electricity Board, reported in : [1998]2SCR620 , has set this controversy at rest. In that case the terms and conditions laid down by the Andhra Pradesh State Electricity Board empowering to disconnect the supply line without notice was challenged on the ground, the same being contrary to the provision of Section 24 of the Act 1910. It has been held in Paragraph 39, relying on the earlier decision of the Supreme Court (reported in : AIR1996SC2258 that Section 24 of the Electricity Act would apply only to a case of regular supply made upon proper demand of payment of electricity charges and it does not apply to payment in a case of detection of pilferage.

23. It has been further held that the validity of the similar condition of supply of electricity and held on prima facie conclusion of power theft reached by the authority, it was not necessary to give further hearing to the consumer and action taken by the board disconnecting the supply was not violative of Articles 20(1) and 14 of the Constitution and the principle of natural justice. It is appropriate to quote relevant observation of the Supreme Court recorded in Paragraph 27 of Hyderabad Vanaspati's case, : [1998]2SCR620 .

'It is the statutory duty of the Board to arrange for supply of electricity throughout the State for transmission and distribution of the same in most efficient and economical manner. For that purpose it has necessarily got to prevent unauthorized user pilferage or mal-practices by the consumers. Hence necessary safeguards have to be provided as part of the Conditions of supply so that the consumers will be bound by them. While on the one hand, the Board has to recoup the loss suffered by such pilferage or other mal practices It has also on the other got to stop immediately the continuation thereof. Hence the terms and conditions of supply have to provide for compensation as well as immediate disconnection, For ascertaining the loss and fixing the compensation uniform procedure had to be framed and machinery constituted, Clause 39 is only doing that. Every consumer is made fully aware of the said terms and he signs the contract only on that basis. He gives an undertaking in that contract that if he is found Indulging in any mal-practice etc. he shall pay additional charges as may be levlled by the Board and that the Board have the right to disconnect supply of electricity to his premises for such period as may be decided by the Board.'

24. Therefore, I hold that the condition as mentioned in Clauses 28 (b) and 29 (a) empowering the CESC to disconnect the supply line without notice is neither contrary to Section 24 nor it violates the provision of Articles 20(1) and 14 of the Constitution of India. Principle of natural justice is applicable in case when a lawful right of a citizen is affected by any administrative decision or action and in that case hearing before such affectation is necessary. But, when a particular person is dealt with for his illegal action, to stop this illegal action being committed compliance of principle of natural justice does not arise. A consumer has no right to pilfer or steal electric energy and, in order to prevent such commission of theft and pilferage, hearing of an offender is not necessary. Hearing of an offender will be necessary when he will be sought to be prosecuted and punished, pursuant to the commission of such offence.

25. It has been further contended by Mr. Ghosh that there are adequate provisions in the Indian Electricity Act, 1910 for dealing with the cases of pilferage or theft of electric energy. In support of his submission he has drawn my attention to Sections 39. 44 and 50 of the said Act. Upon careful perusal of the aforesaid Sections It appears to me that the aforesaid Sections provide for punishment in case prosecution is brought against the offender for committing offence of theft of electric energy and interference with meters or licensee's works and for Improper use of energy, But, those Sections do not make any provision for payment of compensation for the loss sustained by the licensee on account of pilferage and theft of electric energy. The provision for imposition of penalty by way of punishment is not, remedial provision for loss caused to the licensee who cannot get the aforesaid amount of penalty, which will go to public exchequer. So, the aforesaid Sections in my view are not exhaustive to grant comprehensive relief nor do they expressly exclude the possibility of laying down the terms' and conditions for realisation of the loss and damages sustained by the licensee on account of pilferage and theft, Under the law it is not unknown that in a particular cause of action or incident both the civil and criminal actions may give rise. To illustrate such cases are the theft of property and cheating or defalcation and/or misappropriation of the money. In those cases both civil and criminal actions will lie, and those actions may be commenced simultaneously, but normally trial of criminal actions always get precedence over the civil action, as the judgment of civil Court is binding upon the criminal Court, but not the vice versa.

26. I have gone through the Act and the terms and conditions of the licensee, I fail to find any thing in the said Act and Rule whereby licensee is precluded from laying down the terms for recovery of the loss suffered by it due to pilferage and theft of electric energy. It is thus difficult for this Court to accept argument that in case of theft or pilferage of electric energy the mechanism provided under Sections 39, 44 and 50 are adequate.

27. Mr. Mitra is right in saying that a particular piece of legislation, whether subordinate or supreme, cannot be struck down on the ground of unreasonableness, arbitrariness, and being violative of principle of natural justice simplicitor but the case will be different when Article 14 of the Constitution demand elimination of these vices. I have taken note of the decision rendered in the case of State of Andhra Pradesh v. Mcdowell and Company, : [1996]3SCR721 , in that case Supreme Court while dealing with the question of constitutional validity, a legislation, namely, Andhra Pradesh Prohibition Act, 1995, after considering the previous judgment of the Supreme Court opined amongst others that, 'a law made by Parliament or the legislature can be struck down by Courts on two grounds and two grounds alone, (i) Lack of legislative competence and (ii) violation of any of the fundamental rights guaranteed in part (iii) of the Constitution or of any other constitutional provision. There is no third ground.'

28. In this case nobody has argued that the CESC/licensee has no competence to frame the conditions of supply while dealing with its consumers, as rightly argued by Mr. Mitra. In terms of Section 21, Sub-section (2) of Indian Electricity Act, 1910 the licensee not after previous sanction of the State Government can make conditions of supply consistent with the rules made under the Act to regulate its relation with persons who intend to become consumers. Though the State Government has not filed any affidavit, but from the conditions of supply itself I find on 15th May, 2000 The State Government has accorded sanction in writing, therefore, the aforesaid conditions of supply so far as they relate to realization of damages and disconnection of supply line without notice cannot be said to be ultra vires of the aforesaid Act. Therefore, these conditions of supply to this extent cannot be struck down, as I do not find any legislative in competency or violability of any portion of Constitution.

29. The aforesaid Supreme Court decision however, to my mind does not rule out the Court's power to examine a particular piece of legislation on the ground of arbitrariness, which Include discriminatory. Rather it has been observed by necessary implication, in Paragraph 44 of the above decision of Supreme Court; it is possible where a case of arbitrariness is being made out. In fact, it was observed in another decision of three Judges Bench of the Supreme Court which was taken note of in the aforesaid judgment, in case of State of Tamil Nadu v. Annadhi Anam reported in : AIR1995SC2114 are as follows :

'that when a statute is impugned under Article 14 where the Court has to decide whether the statute is so arbitrary or unreasonable that it must be struck down. At best a statute upon a similar subject which derives its authority from another source can be referred to, if its provisions have been held to be unreasonable or have stood best with time, only for the purpose of indicating what may be said to be reasonable in the context........'

30. Hence, I am unable to accept the argument of Mr. Mitra that on the ground of arbitrariness a statute cannot be challenged. It depends upon the nature of the statute or the piece of legislation. If a piece of legislation oh being given effect to results nothing but shockingly arbitrary action all the time, it cannot stand to scrutiny on the anvil of Article 14 of the Constitution of India. Therefore, it has to be examined whether the other terms and conditions empowering the CESC to realize the full provisionally assessed amount of electric energy pilfered along with additional security deposit, disconnection or reconnection charges from the consumer as condition precedent for reconnection of the supply line even before he is held guilty of pilferge or theft are arbitrary and unreasonable. Clause 29 (b) in this respect has been examined by me deeply and I am of the view that for realization of the amount of additional security deposit and the entire amount provisionally assessed for such pilferage is wholly unreasonable if not arbitrary inasmuch as before a consumer is finally adjudged to be guilty of mal-practices he has to pay the same to get back essential supply. I do not find any provision in the terms what would happen if a consumer is later on found to be innocent, no provision for return of the amount with interest is there. These terms suggest once any consumer detected with mal-practices and theft of energy by casual judgment of CESC's official even if erroneous, is presumed to be guilty before adjudication. It is true in a suspected case of pilferage and theft as a preventive measure some instantly deterrent action is necessary, with recovery of some amount of pilfered energy and connection and reconnection charges. But the amount or amounts so to be realized before adjudication must remain within reasonable range so as to I maintain balance to obviate hardship.

31. The Supreme Court in Hyderabad Vanaspati case, : [1998]2SCR620 has approved realization of 50 per cent of ad hoc assessment of unmetered consumption owing to pilferage, theft of electric energy, not the whole amount as condition precedent for restoration of supply. The provision for realization of additional security deposit in the conditions of supply is in my view, even in case of theft, pilferage is ultra vires the provision of the Act and the terms of grant of licence. The licensee can realize security deposit for the purpose and object mentioned in the Act, Rules and Clauses V & VI Schedule of the Act. Act including Schedule and Rule do not permit licensee to realize additional security on any account. The amount of security deposit may be revised if so, necessary, not additional security. On the anvil of sound logic it is unacceptable too in case of theft, as realization of additional security tantamount to regularizing and/or legalizing if not compromising the offence of theft, for once complaint of theft or pilferage is proved before competent Court of law the person and/or the consumer being the accused has to be punished. Realization and payment of security deposit necessarily has link with lawful contract of supply, not as penal measure. The competent Court of law alone can impose penalty. Therefore, I cannot hold the condition for realization and payment of additional security is valid. To sum up on these two issues CESC can apply the above conditions of supply to the extent as follows :

(i) The CESC may disconnect supply without notice as required under Section 24 of the Act.

(ii) It can ask for deposit of 50 per cent of provisional assessment of unmetered electric consumption and payment of disconnection and reconnection charges, as condition for reconnection of supply.

32. As far as the argument regarding appointment of CESC's own officials as being adjudicator is concerned the apprehension of bias cannot be a ground for striking down the Clauses 28, 29 and 30. This point was urged before the Supreme Court in the said case namely Hyderabad Vanaspati reported in : [1998]2SCR620 and Supreme Court in Paragraph 43 of the said judgment has observed as follows :

'The principle 'Nemo Judex Causa in Sua will not apply in this case as the officers have no personal lis with the consumers. As pointed out by learned senior counsel for the Board, they are similar to Income-tax or Sales Tax Officials there is nothing wrong in their adjudicating the matters specifically when the consumers may be represented by the advocate and the formula for making provisional assessment is fixed in the clause itself. An argument has been advanced that the Board has recently deleted the provisions enabling the consumer to be represented by a power of attorney agent. It is contended that the consumer is thereby deprived of the assistance of an export which may be required in technical matters. We do not agree. When the consumer is represented by a lawyer, he can certainly get such assistance as may be needed from technical expert. It is stated by the Board's learned counsel that the provision was deleted as there was frequent misuse of the same. Whatever may be the reason for deleting the provision, the existing part of the clause enables the consumer to be represented by an advocate that is sufficient safeguard for the consumer.'

33. The adjudicating machinery provided in conditions of supply being Clauses 29(d) and 31 empower the Deputy Manager/Manager as first authority to adjudicate the dispute in admitted case of pilferage and theft of electrical energy. This authority on plain reading apparently under condition of supply has no power or jurisdiction to decide the disputes relating to pilferage and theft. The jurisdiction and authority cannot be inferred it must be expressed. Significantly the appellate authority by and under Clause 30(b) of Condition of supply has been given power to decide the question of pilferage and theft of electrical energy. It is ridiculous that first authority will not have any jurisdiction to decide whereas the appellate authority will have the comprehensive jurisdiction. If the first authority is not empowered to decide certain issue, question of preferring of appeal or for that matter decision of the appellate authority on that issue is wholly absurd. I am in agreement with Mr. Mitra's argument that the CESC being licensee is authorized to provide with this mechanism for adjudicating of the dispute but the way and the manner it has been provided will not serve any purpose rather it will lead to an anomalous situation. So the Clause 29(d) is to be read down as meant for resolution of dispute relating to pilferage and theft also.

34. From the trend of the argument of Mr. Mitra it seems to me that this mechanism has been evolved following the decision of the Supreme Court rendered in Hyderabad Vanaspati case : [1998]2SCR620 in which the officials of the Board was held to be competent to decide the dispute of pilferage and theft and such machinery provided by Andhra Pradesh Electricity Board was held not be offending the principle of 'nemo judex in causa sua'. Mr. Mitra naturally adopted the logic given by the Apex Court in his argument that the officials of the CESC cannot have any personal stake and/or interest in a dispute with the consumer.

35. In my view the logic and the reasoning given by the Supreme Court in Hyderabad Vanaspati case will not be applicable in this case as the Board is statutory body and its official is always free to act independently and without being dictated or influenced by higher authority. Unlike limited company official of statutory body, howsoever high cannot have any personal interest. Moreover freedom of its officials is greater in their functioning as the statute regulates their service conditions and their services are not subjected to anybody's pressure and whims. In case of a limited company like present one the officials do not enjoy the same degree or even reasonable degree of independence or legal immunity, as they are not protected like officials of statutory body by its service regulations and/or rules in fine by the Act. In limited company a group of individuals control its affairs. It is quite possible and easy to dictate their officials to protect the interest of the company disregarding fairness. Therefore, the officials of the CESC are not expected to act as arbiter fairly and independently in all possibility they will not be able to do so, even if they intend to do so, as CESC is party to the dispute.

36. In the premise, the CESC limited being a licensee cannot be placed at par with the Electricity Board, which is a statutory authority, regulated and controlled by the law not by the decisions of the Board of Directors or a group of individuals. So, I cannot accept the argument of Mr. Mitra that the adjudicating machinery manned by the officials of the company as provided in Clauses 29(d) and 30 read with Clause 31 (a) ensure equal degree of independence, impartiality and fairness, as in case of Electricity Board.

37. The Constitution Bench of the Supreme Court in case of Union of India v. Tulshiram Patel reported in : (1985)IILLJ206SC as cited by Mr. Ghosh In paragraph 84 it has been lucidly classified two rules of natural justice after tracing the history of the principle of natural justice right from the laws in ancient days including one prevailed during the period of Roman Empire till modern times. Their Lordships in the said paragraph have summarized as follows :

'.....Over the years by a process of judicial interpretation in the two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi-judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair play and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule 'nemo judex in causa sua' or 'nemo debet esse judex in propria causas' as stated In (1605) 12 Co. Rep. 114, that is, 'no man shall be a judge in his own cause'. Coke used the form 'aliquls non debet esse judex in propria causa qula non protest essee judex et pars' (Co. Litt. 141 a), that is, 'no man ought to be a judge in his own cause because he cannot act as judge and at the same be a party'. The form 'nemo protest esse simul actor et judex', that is, 'no one can be at once suitor and judge' is also at times used, the second rule and that is the rule with which we are concerned in these Appeals and Writ Petitions is 'audi alteram partem', that is, 'hear the other side'.

38. In that case the Supreme Court was dealing with the question of second rule of the principle of natural justice that is to say rule of audi alterem partem. Here I am concerned with the first rule of natural justice as to whether a person can be judge of his own cause or not.

39. While examining the constitutional validity of the legislation either supreme or subordinate, breach of principle of natural justice is not the criteria to damnify the legislation until and unless it breaches the provision of the constitution or in case of subordinate legislation, any provision of the Parent Act under which subordinate legislation enacted, or the legislature concerned lacks competence to bring such piece of legislation.

40. Now it has to be examined how for principle of natural justice has been adopted by the framers of our Constitution. Without any hesitation 1 hold that Article 14 of the Constitution of India includes the principle of natural justice. I find support of my observation in paragraph 95 of the same judgment, which I appropriately set out :

'The principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14 because of the new and dynamic Interpretation given by this Court to the concept of equality which is the subject-matter of that Article. Shortly put, the syllogism runs thus : violation of a rule of natural justice result in arbitrariness which is the same as discrimination; where discrimination is the result of State action, it is a violation of Article 14 : therefore, a violation of a principle of natural justice by a State action is a violation of Article 14. Article 14, however is not the sole repository of the principles of natural justice. What it does is to guarantee that any law or State action violating them will be struck down. The principles of natural justice, however; not only to legislation and State action but also where any tribunal, authority or body of men, not coming with the definition of 'State' in Article 12, is charged with the duty of deciding a matter. In such a case, the principles of natural justice require that it must decide such matter fairly and impartially.'

41. It is true CESC under Section 21 has been given power to frame the conditions of supply which may include making provision for adjudicating machinery in a certain situation and CESC has done so in this matter. Therefore, this must be in conformity with the Article 14 of the Constitution of India.

42. In the case of State of Karnataka v. Shree Rameshwara Rice Mills, AIR 1987 SC 1359 the Supreme Court observed amongst other that interest 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 an independent person or body and not by the other party to the contract. This was observed in a case relating to contract entered into by and between private individual on the one hand and the Government department on the other hand. In that case under the contract a Government officials namely Deputy Commissioner was empowered to assess the damages suffered by the Government due to short delivery of rice. It was further observed that adjudication by the officer regarding the breach of the contract cannot be sustained under the law because party to the agreement cannot be an arbiter in his own case.

43. In the case of Krishna Bus Services Pvt. Ltd. v. State of Haryana : AIR1985SC1651 the Supreme Court observed amongst other in paragraph 10 while dealing with the case regarding power given by the State Legislature upon the General Manager, Haryana Roadways of Police Superintendent, that the powers can be considered as reasonable restriction only when they are exercised properly in the interest of general public. They should be reasonable both from the substantive as well as the procedural point. Such power should therefore be entrusted to a person who is expected to exercise them fairly and without bias. In that case the Supreme Court did not approve of conferring of power upon the General Manager, Haryana Roadways, of Deputy S. P. as it was held by the Supreme Court that the General Manager would not be acting unbiased manner.

44. In this case as I have already observed that there is strong possibility of these officials acting in biased manner inasmuch as they are connected with the issue for they are directly or indirectly responsible for disconnection of the electricity supply line in suspected case of pilferage and theft. It is normal human conduct almost in all cases that prosecutor and/or complainant will certainly try to justify his or their own stand while acting as judge and his effort would be to decide the question in support of his action under the law. It Is true that in case of necessity the principle of memo judex in causa sua will not apply, I do not think that any case of extreme necessity being made out by CESC so as to requisition the services of its own official for adjudication of disputes where CESC is a party, who are not expected to be nor will be independent to effectively adjudicate this matter with higher degree of partiality. Fair, impartial and open justice delivery system is one of facets of principle of natural justice. It is now settled position of law that any breach of this principle amounts to infringement of Article 14 of the Constitution of India. So I hold that mechanism providing CESC's own officials as arbiters is unconstitutional as being violative of Article 14 of the Constitution of India.

45. Mr. Mitra submits that in view of the Hyderabad Vanaspati case : [1998]2SCR620 the Electrical Inspector is incompetent to decide the question of pilferage as under Section 26(6) or Schedule VI (3) of the Indian Electricity Act, 1910 do not clothe with jurisdiction on the Electrical Inspector to decide this dispute. It is true going by the terms of the Section 26(6) of the said Act the Electrical Inspector is not empowered by the statute to decide this pilferage dispute but this provision is exhaustive and it does not prohibit to confer further jurisdiction upon him by condition of supply. Nowhere in the statute nor in the Section 26 declares that the electrical Inspector is incompetent to decide the pilferage disputes. The Supreme Court held in the context of the argument advanced by the consumers that under Section 26(6) and Schedule VI (c) of the Indian Electricity Act, 1910, Electrical Inspector is competent to decide this matter and pursuant thereto and while interpreting the language of Section 26(6) and the Schedule VI (3) of the Electricity Act, 1910 it was held so.

46. But there cannot be any embargo if by condition of supply the Electrical Inspector is conferred with the jurisdiction to adjudicate the disputes of pilferage of electric energy, and the same will not be inconsistent with and/or contrary to any of the provisions of the Act. The Electricity Inspector is a technical man and appointed under statute and he has no (sic) nor he can have personal interest either with the CESC or any other authority. It is quite normal and natural this authority will ensure fair and impartial adjudication of any dispute relating to electricity.

47. It is said by Mr. Mitra in several matters involving pilferage disputes. Electrical Inspector reported that he did not have any machinery to detect tampering of seals in pilferage disputes. In my view if any technical assistance by way of any laboratory test either chemical or otherwise is needed the Electrical Inspector can very well call for such report. On receipt of such report it will not be difficult for him to decide the question of electrical energy allegedly pilfered. However this Court cannot compel or direct the CESC to appoint a particular person and/or persons as adjudicator in the condition of supply. This Court only observes that the person or persons should be chosen from those who would be in real sense independent, impartial and there will be no possibility of any biased judgment being rendered in deciding the issues.

48. In the premises I am of the view that the machinery in conditions of supply, for adjudication of the dispute is not an unconstitutional one nor it is contrary to the provision of the Act but the person or persons chosen to man these machinery are unlikely to be independent and impartial as they are the officials of the CESC Limited. As such this Court does not approve of this appointment of the official as arbiters for it offends Article 14 of the Constitution of India. Under such circumstances the CESC shall take such measure appointing and/or nominating independent person as early as possible, in this matter. In that case the said independent person will decide the disputes involved in the writ petition afresh. If this is not done within a period of eight weeks from the date of communication of this order, then the consumer, the petitioners herein, will be at liberty to apply to the Chief Electrical Inspector who in his turn will either adjudicate the dispute by himself or get it to be done by any other electrical inspector of his choice and it will be decided upon hearing of both the parties calling evidence as a special referee in this case.

49. Therefore, I set aside the orders passed by the officials of the CESC. The payment made already by the petitioners will abide by the decisions of Independent person or persons so to be chosen or by Electrical Inspector as the case may be. This writ petition in disposed of without passing any order.

50. It appears that the petitioner has already made a representation and this has been decided and adjudicated by the authorized officer. Therefore, it would open for the petitioners prefer an appeal against the decision already rendered by the authorizedofficer.

51. In my view, this matter involves a substantial question of law and has public importance. So, I grant stay of operation of this judgment and order for a period of two weeks from today.