ORDER
1. Vide this order three Revision Petitions Nos, 2491 to 2493 are being disposed of as common question of law arises therein. Main judgment is, however, prepared in Civil Revision No. 2491 of 1990.
2. The sole question involved in this case is as to whether the matter in dispute should be referred to the Arbitrator under S. 20 of the Indian Arbitration Act. The trial Court dismissed the application filed by M/s. Arihant Textiles Industry and M/s. Arihant Fabrics Limited (hereinafter called ‘the consumers’). The lower appellate Court reversed the decision of the trial Court and referred the following three disputes to the Chief Electrical Inspector, Punjab, Patiala, for arbitration vide order dated March I, 1990:–
(a) Whether the amount deposited by the petitioner under ARPC Scheme J985 of Rs.3,24,750/- is a security?
(b) Whether the additional security deposited under ARPC Scheme 1985 is liable to be refunded after 5 years? If so, under what terms and conditions?
(c) Whether the petitioners are entitled to interest on the additional security deposited under ARPC Scheme 1985? If so, at what rate?
The Punjab State Electricity Board (hereinafter called ‘the Board has come up in revision against the aforesaid order.
3. M/s. Arihant Textiles Industry is a unit of M/s. Arihant Fabrics Limited. The consumer is a registered company under the Indian Companies Act and is running its business of industry at Focal Point, Ludhiana. The industry is being run with the energy supplied by the Board in the form of electricity. The Board prompted a scheme to develop the industries. The consumers decided to establish their plant for manufacturing and dyeing of textile goods and applied and got sanctioned load of 433-233 KW vide account No. LS-10. Another scheme was floated by the Board to further encourage the
industries. Under this scheme additional security was required to be furnished for additional load. This scheme was known as ARPC Scheme of 1985. The additional security at the rate of Rs.750/- per K.W. where sanctioned load was more than 60 K.W. and at the rate of Rs. 1000/- per K.W, where sanctioned load was less than 60 KW was required to be furnished. The consumers deposited this additional security to the tune of Rs. 3,24,750/- in two instalments. The said additional security was liable to be refunded after a period of 5 years in case of surrender of the connection. Otherwise the said amount was to be adjusted in future bills. The purpose of securing additional security was to ensure the regular payment of bills. The consumers claimed that they were entitled to get interest on this refundable security. It was wrongly provided in the scheme that such security was not to bear any interest. Subsequently in the year 1986 the Board decided to allow interest on refundable securities. There could not be two different policies to be adopted by the Board. Since the consumers demanded interest on the additional security and the Board had declined to pay the same, the dispute had arisen between the parties and according to the terms and conditions of the agreement for power supply such matter was to be referred to the Chief Electrical Inspector, Punjab, for arbitration. On these allegations the consuumers moved the petition under S. 20 of the Indian Arbitration Act for referring the dispute to the arbitration of Chief Electrical Inspector.
4. The Board contested the petition raising different pleas. The petition was not maintainable as there was no statutory arbitration agreement to refer the dispute to the aforesaid Arbitrator. The petition was barred by time. The security had not become due for refund. The liability to pay interest was denied. It was alleged that in accordance with the scheme of the year 1985 (ARPC Scheme 1985) the consumers had deposited the security of their own and got the load extended on priority basis. They cannot get the same refunded, much less with interest. The scheme was never challenged. The alleged dispute could not be referred to the arbitra-
tion of Chief Electrical Inspector as the provisions of the scheme were quite clear and unambiguous. In the replication the consumers denied the allegations of the Board. The following issues were framed :–
1) Whether the matter is not referable to the Arbitrator and as such the petition under S. 20 is not maintainable? OPD.
2) Relief.
5. As already stated above, the trial Court dismissed the application and on appeal the decision was reversed and the matter was referred to the Arbitrator. The Board is in revision petition.
6. The electricity is supplied under the provisions of the Indian Electricity Act and the rules framed thereunder. In the Act there is no provision for referring all the matter to the Arbitrator. For the settlement of disputes some provisions are made in the Act, After a connection is sanctioned and the dispute occurs about the correct functioning of the meter the same can be decided under S. 26(6) of the Act by the Electrical Inspector. If any dispute arises between the Board and the consumer in respect of any matter connected with the supply of electricity, clause 30 of the Conditions of supply as framed by the Punjab State Electricity Board would govern the same which is reproduced below:–
“30. DISPUTES:
In the event of any difference or dispute arising between the Board and the consumer in respect of any matter connected with the supply which cannot be determined by these conditions, or by the terms of any agreement between the Board and the consumer, and in the event of any difference or dispute arising as to the interpretation of these conditions or of the terms of any agreement between the Board and the consumer, the matter, shall be determined in accordance with provisions of the Act or by reference to the Chief Electrical Inspector. And in the event of any difference or dispute arising that cannot be determined as aforesaid the provisions of the Indian Arbitration Act as amended from time to time shall apply.”
7. For granting electricity connections of different categories, different rates of security to be furnished are contained in Rule 23 of the Abridged Conditions of Supply. The consumer are already holders of electricity connection of LS category vide Account No. LS-10, sanctioned load on that account being 433-233 KW. In case of consistent default in the payment of electricity bills, additional security can also be asked under Rule 23 aforesaid. This rule further provides that security is to be deposited in cash and an interest at the rate 8% per annum is payable on the security deposits of Rs. 100/- and above. However, no interest is payable if connection is disconnected within a year of giving supply. When ARPC Scheme of 1985 was introduced for allowing additional industrial connections, different conditions were laid down. Under condition No. 3.2 charges were to be worked out on the basis of applied load/disproportionate increase on contract demand at the following rates:–
INDUSTRIAL CONNECTIONS:
i) Load up to 60 KW =@ Rs. 1000/- per KW
ii) Load above 60 KW =@ R$. 750/- per KW
Conditions 3.3, 4 and 5 and reproduced below:–
“3.3: The ARPC charges as deposited above shall remain with the Board free of interest as long as the power connection continues. These will be refundable to the consumer only at the time of surrender of the connection. However, where the connection is surrendered before the expiry of 5 years from the date of connection, the ARPC charges shall not he refunded.”
“4. After the connection under the above regulations is released, the consumer shall be governed by the PSEB ‘Schedule of Tariff, ‘Abridged Conditions of Supply’ and other Rules/ Instructions as may be applicable from time to time.”
“5. In the event of any dispute about the applicability or interpretation of these Regulations, the decision of the Board shall be final and binding.”
Condition 3.3 as reproduced above provided that on the security deposited under this scheme no interest is payable. As already stated above, in the present case the consumer had deposited a sum of Rs. 3,24,750/- towards security in two instalments for additional load under this scheme and the consumer now raises a dispute claiming interest on the aforesaid amount though under condition 3.3 no interest was payable. As per condition No. 4 reproduced above the consumer is to be governed by the Schedule of Tariff, Abridged Conditions of Supply and other Rules/Instructions of the Board issued from time to time. Condition No. 30 being one of them from Abridged Conditions of Supply, has already been reproduced above. Otherwise any dispute about the applicability or interpretation of these regulations (conditions) aforesaid is to be determined by the Board, whose decision is to be final and binding. Subsequently from 1986 onwards the Board further decided to grant interest on the security deposits. However, in the present case we are only concerned with the ARPC Scheme of 1985 which provided non-payment of interest on the security amount.
8. Learned counsel for the consumers has argued that provision in the Scheme of 1985 not to grant interest on the security deposits is arbitrary and bad in law. In support of this contention reliance has been placed on the decision of Rajasthan High Court in M/s. Alpha Alloy Steels Pvt. Ltd. v. Rajasthan State Electricity Board, AIR 1987 Raj 131. In para9 of the judgment it was held that the amount of enhanced security remains with the Board as a trust money and the petitioners cannot be denied legitimate interest on that amount. Reliance was placed on the decision of the Supreme Court in M/s. Jagdamba Paper Industries (Pvt.) Ltd. v. Haryana State Electricity Board, AIR 1983 SC 1296, wherein while referring to the provision of S. 49 of the Act it was held that conditions of supply could he unilaterally changed and thus there could be unilateral enhancement of such security. In this revision petition the
question as to whether provision in the Scheme of 1985 providing that no interest is payable on the security deposits is arbitrary or not, is not to be decided as the question for consideration is only this; as to whether such a question can be referred to the Arbitrator for decision or not ? Thus, ratio of the decision of the Rajasthan High Court, as referred to above, need not be further discussed.
9. Since there is no dispute between the parties relating to correctness of the meters etc. which could be decided by the Electrical Inspector, further comment on S. 26(6) or Condition No. 4 of the Abridged Conditions of Supply also making such a provision is not helpful in deciding the dispute raised. Before the additional connection relating to additional load under the Scheme of 1985 is granted, the terms and conditions of ARPC Scheme of 1985 are to apply. One of such conditions specifically provided (cl. 3.3) that such deposits of security would be free of interest. Since it is a special scheme for providing additional load, condition No. 3.3 would be applicable. As per condition No. 4 of this Scheme it is after the connection is sanctioned under the above regulation that other terms and conditions of Abridged Conditions of Supply, which also includes condition No. 23 and condition No. 30, are to apply. This would show that condition No. 30 of the Abridged Conditions of Supply would relate to differences or disputes arising after the connection had been issued under the new Scheme of 1985 which would, of course, be in the matter of supply of electricity. The dispute regarding payment of interest of deposit of security does not relate to supply of electricity after the connection had been sanctioned and thus it could not be referred to the Arbitrator under condition No. 30, reproduced above. Agreement, though statutory based, is contractual. It is to be strictly construed. There are some matters which the Electrical Inspector is supposed to decide under the Act. However, there are others which can be referred to him applying the provisions of the Indian Arbitration Act. The present is a dispute as raised which is not to be determined by the Electrical Inspector under any provision of the Act and there is no agreement
that such a dispute is to be referred to the Abritrator, as Condition No. 30 of the Abridged Conditions of Supply is not attracted to the dispute raised. The Supreme Court in Dinar State Electricity Board, Patna v. Green Rubber Industries, (1990) 1 SCC 731: (AIR 1990 SC 699). Observed as under in para 23 of the judgment with respect to the nature of agreement under the Electricity Act :–
“A supply agreement to a consumer makes his relation with the Board mainly contractual, where the basis of supply is held to be statutory rather than contractual. In cases where such agreements are made the terms are supposed to have been negotiated between the consumer and the Board, and unless specifically assigned, the agreement normally would have affected the consumer with whom it is made.”
10. During arguments reference has also been made to the decision of the Supreme Court in Food Corporation of India v. Surendra, Devendra and Mohendra Transport, AIR 1988 SC 734. That was a case of grant of pendente lite interest by the Arbitrator. The Supreme Court held that in the absence of any contract the Arbitrator could not grant pendente lite interest having reference to the provision of Section 34 of the Code of Civil Procedure. However, it was observed that if the Court had referred the matter to the Arbitrator in a suit specifically mentioning the dispute of pendente lite interest, the Arbitrator could have granted the interest. Reference was made to the earlier decision of the Supreme Court in this context. In my view these decisions are not at all relevant for the purposes of deciding the question raised in this case. As discussed above, the present dispute, as raised, is neither to be referred to the Electrical Inspector for decision under any provisions of the Act nor the same is required to be referred to the Arbitrator under Clause 30 of to Abridged Conditions of Supply as this matter does not relate to a dispute arising between the parties after sanction of the connection. In other words after resume of the supply, the lower appellate Court was thus not correct in referring the so called dispute to the arbitration of the Electrical Inspector.
11. For the reasons recorded above, these revision petitions are allowed. Orders of the lower appellate Court are set aside and that of the trial Court are restored. The application filed under S. 20 of the Arbitration Act stands dismissed. Parties are left to bear their own costs.
12. Petitions allowed.