ORDER
V.K. Jhanji, Actg. C.J.
1. This shall dispose of the application filed by the applicant-firm in terms of Section 11 (2), (6) of the Arbitration and Conciliation Act read with Notification No. 3 dated 6-4-1999 for passing appropriate directions in regard to the appointment of Arbitrator.
2. In brief, the facts are that the applicant-firm is involved in the manufacture of fruit juice extraction at Rangreth. The applicant applied for the sanction of 750 KWs power load. The application of the applicant was considered and vide Order No. DL/PD/ TA/PAC/229 of 1999 dated 3rd June, 1999, sanction was accorded to the grant of 750 KWs power load in favour of the applicant
for manufacture of concentrate juice. There were as many as 20 conditions laid down in the sanction order. Some of the relevant conditions, as incorporated in the aforesaid sanction order, are quoted hereunder :–
“4. The firm will pay for the power, they consume at the landed cost to be decided/ fixed by the Government;
5. The firm/Unit holder shall have to pay the entire cost for developing the infrastructure for feeding the unit, including the cost of station with its allied equipments and extension of EHT lines etc.;
7. The Executive Engineer, shall not allow power till the entire involved network/ and plants are cleared by the Inspection Agency as per the provisions of the State Electricity Act and rules framed thereunder or rules in vogue in the department in such matters;
10. The Executive Engineer shall see that the unit holder has installed the capacitors of requisite capacity at firm’s own cost to maintain the power factor within the prescribed limits stipulated in the sanctioned tariff;
11. The Executive Engineer, will obtain an affidavit from the consumer for his liability to pay minimum charges (under rules) per month plus electricity duty, whether or not he actually utilises the power after connection is given. These minimum charges shall have to be paid even during the closure of appliances non-utilization of power; and
14. The Executive Engineer, shall see that the consumer shall be bound by the stipulations of the State Electricity Act and rules framed from time to time thereunder and also the terms and conditions of the tariff in vogue with all amendments from time to time as issued by the competent authority of the department/government.”
3. According to the respondents, subsequent to the sanction order, an agreement came to be executed between the parties. The fact of execution of the agreement is being denied by the applicant. It is stated by the applicant that a photocopy of the agreement was produced by the respondents before the District Judge in proceedings under Section 9 of the Arbitration and Conciliation Act {hereinafter for short referred to as ‘the Act’} and the said photocopy of the agreement revealed that the agreement did not bear the signatures of both the parties. The agreement was signed only by the applicant. In these proceedings, the learned counsel for the respondents produced the original agreement before this Court for perusal and on perusal of the same I find that the agreement bears the signatures of the General Manager of the applicant-firm and also of the representatives of the Government, Superintending Engineer, Electric Maintenance and the Executive Engineer. The agreement provides that the applicant-firm shall be liable to pay minimum charges per month plus E.D. fixed by the Government vide Order No. 525 dated 20-11-1998 read with terms and conditions of Government order dated 22-10-1997. It also provides that within ten days of the completion of the agreement, the consumer agrees to deposit with the supplier as security a sum equivalent to the power charges on flat rate basis for two months calculated on the makers rated input of the motor or motors to be installed by it. The agreement was to remain in force for a period of three years. Clause 5(b) of the agreement provides that if the consumer at any time discontinues utilization of power temporarily within the agreement period without any satisfactory reasons, or his installation is disconnected for non-payment of dues, he shall have to pay the charges at the fixed demand rate as per the schedule for the period of disconnection. The agreement also provides that the terms and conditions as laid down in the sanction order dated 3rd June, 1999 shall be binding on the applicant-firm.
4. Record shows that the Department, in terms of the sanction order and the agreement, raised a demand of approximately Rs. 36,00,000/- which included the security deposit of Rs. 22,57,936.00.
5. The applicant, being aggrieved of the demand made by the respondents, filed OWP No. 420/99 praying for issuance of an appropriate writ or direction, including a writ in the nature of certiorari for quashing communication dated 2nd August, 1999 insofar as it related to the deposit of Rs. 22,57,936.00 by way of security deposit by the applicant. The said writ petition is yet to be decided and is pending decision.
6. It appears that subsequent to the filing of the writ petition, a temporary connection was given to the applicant on his depositing an amount of Rupees 3 Lakhs and odd. After the temporary connection was given, the applicant-firm started its manufacturing process of extraction of concentrate juice. A bill of Rs. 8,27,928/- was sent to the applicant-firm towards the installation and arrears of the electricity consumed by the applicant-firm. The amount was calculated on the basis of minimum consumption guarantee for 33 KV, 415 volts. The applicant, in order to challenge the demand made by the respondents, filed an application under Section 9 of the Act before the learned District Judge and prayed for interim relief of restoration of electric supply to the installation of the applicant-firm. The learned District Judge vide order dated 6th May, 2000 ordered the restoration of electric supply to the installation of the applicant-firm. The learned District Judge also directed that the applicant shall be bound to pay the actual charges of electric energy consumed by it as per meter reading regularly on receipt of bills from the respondent without default. The applicant-firm was also given two months* time to submit proper arbitration petition before the Chief Justice as per the provisions of the Act.
7. The respondents, being aggrieved of the order of the learned District Judge, filed an appeal in which operation of the order of the learned District Judge was stayed. In consequence of the stay of operation of the order of the learned District Judge, the respondents disconnected electric supply to the applicant-firm’s installation on 29th May, 2000. For getting the connection restored, the applicant filed CMP No. 130/ 2000 in the said appeal. In that application, the applicant-firm was directed to deposit 50% of the amount and on his depositing the said amount, the electric supply to the installation of the applicant-firm has been restored.
8. The present application has been filed by the applicant-firm for appointment of an arbitrator in terms of Section 72 of the Jammu and Kashmir Electricity (Supply) Act, 1971. Learned counsel for the applicant submitted that since disputes have arisen between the parties in regard to the demand of minimum charges and arrears on account of energy tariff and also the manner the same is to be paid, an arbitrator in terms of Section 72 of the Jammu and Kashmir Electricity (Supply) Act, 1971 (hereinafter referred to as “the Electricity (Supply) Act, 1971”) is to be appointed.
9. The learned counsel appearing for the respondents, Mr. A. N. Magrey, raised a preliminary objection regarding the maintainability of the application for appointment of arbitrator. The learned counsel contended that Section 72 of the Electricity (Supply) Act does not deal with determination of disputes by the Arbitrator between the State Government and the consumer. He submitted that the expression, “other person” appearing in Section 72 of the Act does not relate to the consumer and the applicant being a consumer is not entitled to invoke the provision of Section 72 of the Electricity (Supply) Act. In support of his submission, the learned counsel for the respondents cited a judgment of the Supreme Court in Mysore State Electricity Board v. Bangalore Woollen, Cotton and Silk Mills Ltd. reported in AIR 1963 SC 1128. He also relied on the case, Maharashtra State Electricity Board, Bombay v. Talegaon Dabhade Municipality reported in AIR 1967 Bombay 75.
10. In answer to this submission, Mr, Z. A. Shah, senior counsel, appearing on behalf of the applicant, contended that in Mysore State Electricity Board v. Bangalore Wollen Mills (supra), their Lordships of the Supreme Court did not determine the question in regard to the meaning of the expression “other person” occurring in Section 76(1) of the Electricity (Supply) Act, 1948 (hereinafter referred to as ‘the Act of 1948’), which is in pari materia to Section 72 of the Electricity (Supply) Act, 1971. He further submitted that their lordships of the Bombay High Court in Maharashtra State Electricity Board, Bombay v. Talegaon Dabhade Municipality (supra) in turn have relied upon the judgment of the Supreme Court in AIR 1963 SC 1128 (supra) and thus it will also not apply to the case in hand. Mr. Shah referred to some of the provisions of the Electricity (Supply) Act of 1948 and also some of the provisions of the Electricity (Supply) Act of 1971 to impress upon that all the disputes arising between the State Government and the consumers are to be determined by arbitrator to be appointed by the Government as provided under Section 72 of the Electricity (Supply) Act, 1971.
11. I have heard learned counsel for the parties and have carefully gone through the
record of this case.
12. The Electricity (Supply) Act, 1971, was enacted to provide for rationalisation of the production and supply of electricity and generally for taking measures conducive to electrical development. Section 2 (1) of the Act defines the “Board” as the Jammu and Kashmir Electricity Board constituted under Section 3 of the Act. “Licensee” has been defined in Sub-clause (5) of Section 2 as a person licensed under the Jammu and Kashmir Electricity Act, Svt. 1997 to supply energy or a person who obtained sanction under Section 28 of that Act to engage in the business of supplying energy but, the provisions of Section 23 of this Act notwithstanding, does not include the Board. Section 3 provides for the constitution and composition of the Board. Admittedly, the Board has not been constituted till date and the function of the Board are being exercised by the Government.
13. In order to appreciate the contention of the learned counsel for the respondents that, if the definition of the ‘Board’ and ‘licensee’ appearing in Section 2 read with Sections 71 and 72 of the Electricity (Supply) Act, 1971 are read together, it would be clear that the disputes arising between the consumers and the Board or the Government or the licensee are not covered under Section 72 of the Electricity (Supply) Act, 1971, it would be appropriate to quote hereinbelow Sections 71 and 72 of the Electricity (Supply) Act, 1971. These provisions of the Act read thus :
“71. Annual reports, statistics and returns:
(1) The Board shall, before such date and in such form as may be prescribed, submit to the Government an annual report upon such matters as may be prescribed, and the Government shall cause such report to be published in the Government Gazette.
(2) Without prejudice to the provisions of Sub-Section (1), the Board shall, as soon as may be after the end of each financial year, prepare and submit to the Government in such form as may be prescribed a report giving an account of its activities during the previous financial year and the report shall also give an account of activities, if any. which are likely to be undertaken by the Board in the next financial year; and the Government shall cause every such report to be laid before both the Houses of the Legislature as soon as may be after it is received by the Government.
(3) The Board shall furnish to the Government at such times and in such form and manner as may be prescribed or as the Government may direct, such statistics and returns and such particulars in regard to any proposed or existing scheme as the Government may from time to time require.
(4) The Board may, at any time by notice in writing. require any licensee pr person supplying electricity for public or private purposes or generating electricity for his own use to furnish It with such information and accounts relating to such supply or generation and in such form and manner as the notice may specify.
(underlining supplied)
72. Arbitration.– (1) All questions arising between the Government or the Board and a licensee or other person shall be determined by such person or authority as the Government may appoint.
(2) Subject to the provisions of this section, the provisions of the Jammu and Kashmir Arbitration Act, 2002 shall apply to arbitrations under this Act.
(3) The arbitrator shall in making his award have regard to the provisions of this Act and any rules and regulations made thereunder relevant to the reference.
(4) The arbitrator may, if he thinks its expedient so to do, call in the aid of one or more qualified assessors and hear the reference wholly or partially with the aid of such assessors.”
The above quoted sections are in pari materia to Sections 75 and 76 of the Electricity (Supply) Act, 1948 (Central Act). Sections 75 and 76 of the 1948 Act came up for consideration before their lordships of the Supreme Court in case Mysore State Electricity Board v. Bangalore W.C. & S. Mills, (AIR 1963 SC 1128) (supra). The majority judgment was delivered by Hon’ble S. K. Das, J. (as his lordship then was). A perusal of Para 26 of the judgment reveals that because the dispute arising in that case was not the one referable under Section 76 of the Electricity (Supply) Act. 1948. the question whether the rule of ejusdem generis applies or not in interpreting Section 76 of the Act was not finally determined. However,
Hidayatullah, J. (as his lordship then was) in his separate judgment, agreeing with the majority view, after scanning the whole Act, opined that consumers have no place in the Act and wherever the Act uses the words “other person”, it Invariably means persons who generate and supply electrical energy and not those who consume it.
14. In Maharashtra State Electricity Board, Bombay v. Talegaon Dabhade Municipality, AIR 1967 Bombay 75 (supra), a Division Bench of the Bombay High Court considered the expression “other person” occurring in Section 76(1) of the Electricity Supply Act, 1948 (Central Act). Having regard to the scheme of the Act, the Division Bench opined that the words “other person” appearing in Section 76 of the Act means a person engaged or likely to be engaged in activities similar to those of a licensee and includes persons who generate or supply electricity or who intend to establish or acquire a generating station or with whom the Electricity Board has entered into arrangements for generation, distribution or supply of electricity. It was also held that the expression “other person” will not include a consumer or a person with whom the Board has entered into a contract for the purchase of some goods. It was further held that the dispute between the licensee and a consumer cannot be the subject of arbitration under Section 76(1) of the Act.
15. On carefully going through both the judgments of the Supreme Court and the Bombay High Court and the scheme of the Electricity Supply Act, 1971 as also the Electricity Supply Act, 1948 (Central Act), I am also of the view that the expression “other person” occurring in Section 72 of the Electricity Supply Act, 1971 means a person supplying electricity for public or private purposes or generating electricity for his own use. The expression does not include a consumer. In fact, consumers have no place in the Electricity Supply Act, 1971. Consumer has been defined in the Jammu and Kashmir Electricity Act, 1997 (1940 AD) as any person who is supplied with energy by a licensee or whose premises are for the time being connected for the purposes of a supply of energy with the works of a licensee. The Jammu and Kashmir Electricity Act, 1997 (1940 AD) deals with the law relating to the supply and use of electrical energy. Clause IX of the schedule appended to the
Act provides for the method of charging for the energy supplied by the licensee to the consumer. Clause X provides for charging of the minimum charges from the consumer notwithstanding that no energy has been used by the consumer during the period for which such minimum charges are made. Section 53 of the Electricity Act, 1997 (1940 AD) deals with the recovery of sums recoverable from the consumers under certain provisions of the Act in respect of the supply of electric energy or any sum declared to be recoverable or any fee leviable under the Act. Proviso added to Sub-section (2) of Section 53 provides that if any person disputes his liability to pay the arrears of electrical energy charges or fees or disputes the correctness of the amount demanded, he may pay the amount demanded from him under protest in writing and may bring a suit in the Civil Court to contest his liability and for refund of the amount not due from him. In view of this clear provision, it cannot be urged by the learned counsel for the applicant that disputes arising between the consumer and the Board /Government are referable to the arbitration and the jurisdiction of the civil Court is barred. Further, I am in complete agreement with the view taken by the Division Bench of the High Court of Bombay that if the argument of the applicant is accepted, then every petty dispute, say between the Board/Government and the consumer, will have to be referred to arbitration and this does not appear to be the intention of the Legislature.
16. In view of the above, the application filed by the applicant-firm is dismissed on the ground that the dispute between the applicant-firm, being a consumer, and the respondents is not referable to the arbitration under Section 72 of the Electricity Supply Act, 1971.