{"id":47499,"date":"1998-04-01T00:00:00","date_gmt":"1998-03-31T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-hyderabad-vanaspathi-limited-vs-andhra-pradesh-state-electricity-on-1-april-1998"},"modified":"2018-02-23T15:04:34","modified_gmt":"2018-02-23T09:34:34","slug":"ms-hyderabad-vanaspathi-limited-vs-andhra-pradesh-state-electricity-on-1-april-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-hyderabad-vanaspathi-limited-vs-andhra-pradesh-state-electricity-on-1-april-1998","title":{"rendered":"M\/S Hyderabad Vanaspathi Limited vs Andhra Pradesh State Electricity … on 1 April, 1998"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S Hyderabad Vanaspathi Limited vs Andhra Pradesh State Electricity … on 1 April, 1998<\/div>\n
Author: Srinivasan<\/div>\n
Bench: S.C. Agrawal, S.Saghir Ahmad, M. Srinivasan<\/div>\n
           PETITIONER:\nM\/S HYDERABAD VANASPATHI LIMITED\n\n\tVs.\n\nRESPONDENT:\nANDHRA PRADESH STATE ELECTRICITY BOARD AND ORS.\n\nDATE OF JUDGMENT:\t01\/04\/1998\n\nBENCH:\nS.C. AGRAWAL, S.SAGHIR AHMAD, M. SRINIVASAN\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t\t     J U D G E M E N T
\nSRINIVASAN, J.\n<\/p>\n
I. Relevant facts,
\n     The appellant in the earlier appeal of 1988 is a public
\nlimited company engaged in the manufacture of Vanaspathi. It
\nentered\t into  two  agreements\twith  Andhra  Pradesh  State
\nElectricity Board  hereinafter referred\t to  as\t `Board’  on
\n1.9.1970 and  27.8.1973 for supply of High tension power. In
\nJanuary, 1976  the  officers  of  the  Board  inspected\t the
\nfactory premises and noticed  pilferage of energy. The power
\nsupply\twas   immediately  disconnected\t and  a\t provisional
\nassessment of  the loss\t was  made  at\tRs.  61,28,535\/-.  A
\nprosecution was\t launched under Section 379 I.P.C. read with
\nSection 39  of the Indian Electricity Act, 1910, hereinafter
\nreferred to as the Electricity Act in the court of the Chief
\nMetropolitan Magistrate, Hyderabad. The Board also initiated
\nproceedings  calling   upon  the   appellant  to   file\t its
\nobjections to  the  provisional\t assessment.  The  appellant
\ndenied the allegations made by the Board. After enquiry, the
\nfinal assessment  was made  fixing the lost at Rs. 55,511.81
\nPs. The\t order was challenged by the appellant in appeal but
\nin vain.  The  appellant  filed\t a  suit  in  the  court  of
\nAdditional Chief  Judge, City  Civil Court (Temp), Hyderabad
\nfor a  declaration that\t it was not liable to pay any amount
\nas penal  damages and  prayed for  a direction for refund of
\nthe amount  of Rs. 22.50 lakhs collected by the Board during
\nthe pendency of the assessment proceedings and for perpetual
\ninjunction   restraining   the\t defendants   therein\tfrom
\ndisconnecting the power supply.\n<\/p>\n
2.   The suit  was contested  by the  Board. Several  issues
\nwere raised  including one  relating to\t the jurisdiction of
\nthe  civil   court.  The   trial  court\t held  that  it\t had
\njurisdiction  to   try\tthe   suit  but\t negatived  all\t the
\ncontentions of\tthe plaintiff  and dismissed  the  suit.  On
\nappeal, a  Division  Bench  of\tAndhra\tPradesh\t High  Court
\nrejected the  pleas of the appellant and dismissed the same.
\nThe High  Court held that the terms and conditions of supply
\non the\tbasis of  which the  agreements were entered between
\nthe appellant  and the\tBoard did  not in any way contravene
\nthe provisions\tof either  the\t”  Electricity\tAct  or\t the
\nElectricity (Supply)  Act. It  was  also  found\t that  ample
\nopportunity was\t given to  the appellant  before  the  final
\norder of  assessment was  made and  that the enquiry held by
\nthe officers  of the Board was in no way vitiated. Aggrieved
\nby the\tsaid  decision\tof  the\t High  Court  the  appellant
\npreferred the said appeal on obtaining Special Leave of this
\ncourt.\n<\/p>\n
3.   The questions  which were\tdecided by the High Court in
\nthe  aforesaid\t proceedings  were   raised  again  in\tWrit
\nPetitions under\t Article 226 of the Constitution of India by
\nsome industrial\t undertakings which  had also  entered\tinto
\nagreements with\t the Board  for supply\tof electricity. When
\nproceedings  were  initiated  by  the  Board  against  those
\nindustrial  undertakings  on  the  ground  of  pilferage  of
\nelectrical  energy   and  supply  was  disconnected  pending
\nenquiry, those undertakings filed Writ Petitions challenging
\nthe validity  of  such\tproceedings.  In  one  of  the\twrit
\npetitions, an  appeal was  filed  against  an  Interlocutory
\nOrder refusing\tto grant  interim relief  to the  petitioner
\ntherein. When  that appeal  was admitted by a Division Bench
\nthe matter  was placed\tbefore a  Full Bench for disposal as
\nthe Division  Bench  opined  that  the\tview  taken  by\t the
\nDivision Bench\tin the\tCivil Appeal referred to earlier was
\nlikely to  be in  conflict with\t the “possible view that the
\ncontractual obligation upon the consumer of electricity that
\nin case of a dispute as to the consumption, the adjudication
\nshall be  by the officers of the Board shall be deviative of
\nArticle 14  of the Constitution of India”. Thus all the writ
\npetitions and  the writ appeals against interlocutory orders
\nwere heard  by a  Full Bench of three Judges and disposed of
\nby a common judgment dated 12.9.1997.\n<\/p>\n
4.   The  Full\t Bench\topined\tthat  the  creation  of\t the
\nadjudicatory  process\tby  a\tcontractual  obligation\t  in
\ncondition no.  39 of the `Terms and Conditions of Supply’ of
\nelectricity was\t wholly vitiated”  The Full  Bench  observed
\nthat though  there is  no bar  against the  Board to recover
\ncompensation for  the loss caused to it even when a consumer
\nis prosecuted  for the\tsame  offence  under  the  Act,\t the
\nenquiry into  the estimate  of the loss should be made by an
\nindependent and\t properly constituted  body. Ultimately\t the
\nFull Bench concluded its order as follows:\n<\/p>\n
\t  “In\tview\tof   the   above
\n     discussion, we  have no  hesitation
\n     to hold  that condition  39 of  the
\n     conditions framed\tby the Board, to
\n     the  extent   it\tprescribes   the
\n     procedure for  adjudication of  the
\n     dispute relating  to  pilferage  or
\n     malpractice of energy and for final
\n     assessment\t  of\tthe   additional
\n     charges, is  ultravires of\t Section
\n     24, 26 (6) and C1.IV(3) of schedule
\n     of the  Act of 1910 and Sect. 49 of
\n     Act of 1948, and is wholly vitiated
\n     as being arbitrary and violative of
\n     Article 14\t of the Constitution and
\n     is\t  accordingly\t struck\t   down.
\n     However,  the   contention\t of  the
\n     learned Advocate  General that  the
\n     Board is  empowered to regulate the
\n     supply  of\t  energy  including  the
\n     power of  disconnection, on a prima
\n     facie satisfaction\t or suspicion of
\n     a conduct\tamounting to malpractice
\n     or energy\ton ground  of  including
\n     malpractice of pilferage of energy.
\n     The conditions in the agreements in
\n     Appendix  III  &  IV  also\t contain
\n     stipulation  of   disconnection  of
\n     supply on suspicion of violation of
\n     conditions. Thus,\tif an allegation
\n     is made of malpractice or pilferage
\n     against the  consumer an  d if  the
\n     consumer denied  the allegation and
\n     makes   an\t  application\tto   the
\n     Electrical\t Inspector,   holds   on
\n     preliminary facts,\t that he  has no
\n     jurisdiction in  the  matter,  then
\n     the Board is empowered to take such
\n     step as  it  may  deem  proper  and
\n     appropriate including disconnection
\n     of supply\ton  certain  conditions.
\n     This  action   of\tthe   Board,  is
\n     however, subject to the scrutiny by
\n     a court of law”.\n<\/p><\/blockquote>\n
5.   It is  against the\t said judgment of the Full Bench the
\nBoard has  filed the  Civil Appeals  Nos. 7139-7144 of 1997.
\nAll the\t appeals have been heard together as the contentions
\nare common.  For the  sake of  convenience, the parties will
\nbe hereafter  referred to  as the  Board on the one hand and
\nthe consumers on the other.\n<\/p>\n
6.   The chief argument advanced on  behalf of the consumers
\nis that\t condition number 39 in the `Terms and Conditions of
\nSupply’ of  electricity\t which\tare  purely  contractual  is
\nultravires the\tprovisions of  the Indian  Electricity\tAct,
\n1910 hereinafter  referred to  as the  `Electricity Act’ and
\nElectricity (Supply)  Act, 1948\t hereinafter referred  to as
\nthe `Supply  Act’. Alternatively,  it is contended that even
\nif the\tterms are  statutory in nature, the condition is not
\nvalid. Thirdly,\t it is\targued that  the said  condition  is
\nviolative of  Article 14  of the  Construction of India. Per
\ncontra, it  is contended  on behalf  of the Board that it is
\nperforming a  statutory obligation to supply electricity and
\nhas been  empowered by\tthe provisions\tof Section 49 of the
\nSupply Act  to impose such terms and conditions as it thinks
\nfit. The  conditions which  have been  so imposed  including
\ncondition number 39 are statutory in character and are in no
\nway contrary  to the provisions of either of the enactments.
\nThe conditions\tare also  quite reasonable and cannot in any
\nsense be termed arbitrary and violative of the provisions of
\nArticle 14 of the Constitution of India.
\nII. RELEVANT STATUTORY PROVISIONS\n<\/p>\n
7.   Before  adverting\tto  the\t rival\tcontentions,  it  is
\nnecessary  to\trefer  to  certain  provisions\tin  the\t two
\nenactments namely  Electricity Act  and the  Supply Act.  An
\nElectricity Act\t was passed  originally in  1903 but  it was
\nrepealed by  the Electricity  Act      which amended the law
\nrelating to  the supply\t and use  of electrical\t energy. The
\nsaid Act  was not  a complete  Code on\tthe subject.  It was
\napparently  found   to\tbe   inadequate\t  for\tcoordinating
\ndevelopment of\telectricity on\tregional basis.\t Hence,\t the
\nSupply\tAct   was   enacted   in   1948\t  to   provide\t for
\nrationalisation of  the production and supply of electricity
\nand generally  for taking  measures conducive to electricity
\nand generally  for taking  measures conducive to electricity
\ndevelopment. While the earlier Act deals with the supply and
\nuse of\telectric energy\t and the  rights an d obligations of
\nthe licensees, the later Act  deals with statutory power and
\nfunctions  of\tthe  Central  Electricity  Authority,  State
\nElectricity Boards  and Generating  companies. Section 70(1)
\nof the\tlater Act  provisions in  so far  as  there  is\t any
\ninconsistency therewith in the provisions of the earlier Act
\nor any Rules made thereunder or any instrument having effect
\nby virtue  of the  said Act  or Rules.\tThe proviso  to sub-
\nsection (1) clarifies that nothing in the later Act shall be
\ndoemed to  prevent the State Government from granting, after
\nconsultation with the Board, a licence not inconsistent with
\nthe provisions\tof the\tearlier Act to any person in respect
\nof such\t area and  on such terms and conditions as the State
\nGovernment may think fit. Sub-s.(2) makes it clear that save
\nas otherwise  provided in  the later  Act, the provisions of
\nthe Act shall be in addition to and not in derogation of the
\nearlier Act.\n<\/p>\n
8.   Section 26\t of the\t Supply Act is to the offer that the
\nBoard shall  in respect\t of the\t  whole\t State have  all the
\npowers and obligations of the licensee under the Electricity
\nAct and\t the later  Act shall be deemed to be the licence of
\nthe Board  for the  purpose of\tthe earlier  Act. The  first
\nproviso to  the Section\t 3 to  11, sub-ss.  (2) and   (3) of
\nSection 21, Section 22, sub-section (i) to (v), clause (vii)
\nand clauses (ix) to (xii) of the Schedule to the Electricity
\nAct relating  to the  duties and  obligations of a licensee.
\nThe second proviso states that the provisions of clause (vi)
\nto the\tSchedule to the earlier Act shall apply to the Board
\nin respect  of that  area only where distribution mains have
\nbeen laid  by the Board and the supply of energy through any
\nof them had commenced.\n<\/p>\n
9.   In view  of the  provisions of Section 26 of the Supply
\nAct our\t attention has been drawn by the learned counsel for
\nthe  consumers\tto  some  only\tof  the\t provisions  of\t the
\nElectricity Act.  Section 20  sets  out\t the  power  of\t the
\nlicensee or  any person\t duly authorised  by the licensee to
\nenter the  premises to\twhich energy  has been\tsupplied and
\nremove fittings,  etc.\tin  certain  circumstances  and\t the
\nprocedure therefore.  Sub-sections (1) and (4) of Section 21
\nare in the following terms :\n<\/p>\n
\t  “Section  21(1).   A\tlicensee
\n     shall not\tbe entitled to prescribe
\n     any special  form of  appliance for
\n     utilizing energy supplied by him or
\n     save as provided (in any conditions
\n     made  under   sub-s.  (2)\t or)  by
\n     Section  23,   sub-s.  (2),  or  by
\n     Section 26,  sub-s.(7), in\t any way
\n     to control\t or interfere  with  the
\n     use of such energy :\n<\/p><\/blockquote>\n
     provided that  no person  may adopt
\n     any form  of appliance,  or use the
\n     energy supplied  to him  so  as  to
\n     unduly or\timproperly to (interfere
\n     with –\n<\/p><\/blockquote>\n
     (a) the safety or efficient working
\n     of licensee  electric supply  lines
\n     or other works ; or\n<\/p><\/blockquote>\n
     (b) the  supply of\t energy\t by  the
\n     licensee to any other person)…..<\/p><\/blockquote>\n
     “(4)  Where   any\t difference   or
\n     dispute  arises  as  to  whether  a
\n     licensee\thas    prescribed    any
\n     applicance\t  or\tcontrolled    or
\n     interfered\t  any\t applicance   or
\n     controlled or  interfered with  the
\n     use of  energy in\tcontravention of
\n     sub-section (1),  the matter  shall
\n     be either referred to an Electrical
\n     Inspector and  decided by\thim, or,
\n     if\t the  licensee\tor  consumer  so
\n     desires,\t    determined\t      by
\n     arbitration.”\n<\/p><\/blockquote>\n
     Section 24(1)  and\t   (2)\tread  as\n     follows :-\n<\/pre>\n
     “(1) Where\t any person  neglects to
\n     pay any  charge for  energy or  any
\n     (sum,  other   than  a  charge  for
\n     energy,) due  from him  to a energy
\n     to him,  the  licensee  may,  after
\n     giving not\t less than  seven  clear
\n     days  notice  in  writing\tto  such
\n     person and without prejudice to his
\n     right to  recover\tsuch  charge  or
\n     other sub\tmy  suit,  cut\toff  the
\n     supply and\t for that purpose cut or
\n     disconnect any electric supply-line
\n     or other  works, being the property
\n     of\t the   licensee,  through  which
\n     energy may\t be  supplied,\tand  may
\n     discontinue the  supply until  such
\n     charge or\tother sum, together with
\n     any expenses  incurred  by\t him  in
\n     cutting off  and re-connecting  the
\n     supply, are paid, but no longer.
\n     (2) Where any difference or dispute
\n     (which by\tor  under  this\t Act  is
\n     required to  be  determined  by  an
\n     Electrical\t Inspector,   has   been
\n     referred to  the Inspector)  before
\n     as aforesaid  has been given by the
\n     licenses, the  licensee  shall  not
\n     exercise the  powers  conferred  by
\n     this section  until  the  Inspector
\n     has given his decision:
\n     PROVIDED\tthat   the   prohibition
\n     contained in this sub-section shall
\n     not apply\tin any case in which the
\n     licensee  has  made  a  request  in
\n     writing  to   the\tconsumer  for  a
\n     deposit   with    the   (Electrical
\n     Inspector) of  the\t amount\t of  the
\n     licensee’s charges or other sums in
\n     dispute   the    deposit\tof   the
\n     licensee’s further\t charges for  or
\n     for energy as they accrue, and t he
\n     consumer has  failed to comply with
\n     such request.)
\n     Section 26(6)  is in  the following
\n     terms :\n<\/p><\/blockquote>\n
\t  “Where   any\t difference   or
\n     dispute arises  as to  whether  any
\n     meter referred  to\t in  sub-section
\n     (1)  is  or  is  not  correct,  the
\n     matter shall  be decided, upon t he
\n     application of  either party, by an
\n     Electrical Inspector;  an\td  where
\n     the meter\thas, in\t the opinion  of
\n     such Inspector  shall estimate  the
\n     amount of\tthe energy  supplied  to
\n     the  consumer   or\t the  electrical
\n     quantity contained\t in the\t supply,
\n     during such time, not exceeding six
\n     months, as\t the meter shall not, in
\n     the opinion of such Inspector, have
\n     been   correct;\tbut   save    as
\n     aforesaid,\t the   register\t of  the
\n     meter  shall,  in\tthe  absence  of
\n     fraud, be conclusive proof\t of such
\n     amount or quantity :\n<\/p><\/blockquote>\n
\t  PROVIDED that\t before either a
\n     licensee or  a consumer  applies to
\n     the Electrical Inspector applies to
\n     the Electrical Inspector under this
\n     sub-section, he  shall give  to the
\n     other party  not  less  than  seven
\n     days, notice of his intention so to
\n     do”.\n<\/p><\/blockquote>\n
10.  Learned counsel  has also draw our attention to Section
\n35 and\t36 of  the said\t Act as\t well as Rules 4 to 6 of the
\nIndian Electricity  Rules framed  under the  Act. Section 35
\ndeals with  the\t constitution  of  the\tAdvisory  Board\t and
\nSection\t 36   deals  with   the\t appointment  of  Electrical
\nInspector. Rules  4 to\t6 provide  for the qualifications of
\nInspectors etc.\t We are\t not extracting\t those provisions as
\nthey  are  unnecessary\tin  this  case.\t In  the  course  of
\narguments our attention has also been drawn to Rule 27 which
\nprovides for  Model conditions\tor supply  as  contained  in
\nAnnexure VI.\n<\/p>\n
11.  Apart from\t the above,  strong reliance  is  placed  on
\nClause VI  of the  Schedule to\tthe  Act  which\t deals\twith
\nrequisition  for  supply  to  owners  or  occupiers  of\t any
\npremises situate  within the  area of  supply of a licensee.
\nSub-clause (1)\tand sub-clause\t(3) of\tClause\tVI  read  as
\nfollows :-\n<\/p>\n
     VI.  Requisition\tfor  supply   to
\n     owners or occupiers in vicinity
\n     (1)  Where,   (after   distribution
\n     mains have been laid down under the
\n     provisions of Clause IV or Clause V
\n     and the  supply of\t energy\t through
\n     those mains  or  any  of  them  has
\n     commenced.) a  requisition is  made
\n     by the  owner or  occupier\t of  any
\n     premises situate  within (the  area
\n     of supply)\t requiring the\tlicensee
\n     to\t supply\t  the  energy  for  such
\n     premises the licensee shall, within
\n     one month\tfrom the  making of  the
\n     requisition, (or within such longer
\n     period    as     the    (Electrical
\n     Inspector) may  allow) supply, and,
\n     save in  so far  as he is prevented
\n     from doing\t so by cyclones, floods,
\n     storms or\tother occurrence  beyond
\n     his  control  continue  to\t supply,
\n     energy  in\t  accordance  with   the
\n     requisition.\n<\/p><\/blockquote>\n
\t  …………\n<\/p><\/blockquote>\n
\t  ………..\n<\/p><\/blockquote>\n
     (3) Where any difference or dispute
\n     arises as\tto the\tamount of energy
\n     to\t be   taken  or\t  guaranteed  as
\n     aforesaid, or as to the cost of any
\n     service-line   or\t  as   to    the
\n     sufficiency of the security offered
\n     by any owner of occupier, (or as to
\n     the position of the meter board) or
\n     as to  the improper uses of energy,
\n     or as  to any alleged defect in any
\n     wires,    fittings,     works    or
\n     apparatus, or  as to  the amount of
\n     the  expenses  incurred  under  the
\n     third proviso  to\tsub-cl.(1),  the
\n     matter shall  be  referred\t to  and
\n     (Electrical Inspector)  and decided
\n     by him.\n<\/p><\/blockquote>\n
12.  Turning to the provisions of the Supply Act, apart from
\nthe Sections  which we\thave referred  to earlier, reference
\nmay be made to Sections 18 and 19. While Section 18 sets out
\nthe general  duties of\tt he  Board, Section 19 sets out the
\npowers of  the\tBoard.\tSection\t 49  is\t the  most  relevant
\nprovision in this case and  it reads as follows :\n<\/p>\n
     “Section 49. Provision for the sale
\n     of\t electricity  by  the  Board  to
\n     persons other than licensees.– (1)
\n     Subject to\t the provisions\t of this
\n     Act and   or  regulations, if  any,
\n     made in  this behalf, the Board may
\n     supply electricity\t to  any  person
\n     not  being\t a  licensee  upon  such
\n     terms and\tconditions as  the Board
\n     thinks  fit   and\tmay\tfor  the
\n     purposes  of   such  supply   frame
\n     uniform tariffs.\n<\/p><\/blockquote>\n
     (2) In  fixing the uniform tariffs,
\n     the Board\tshall have regard to all
\n     or any  or the  following\tfactors,
\n     namely-\n<\/p><\/blockquote>\n
\t  (a) the  nature of  the supply
\n\t  and the  purposes for which it
\n\t  is required;\n<\/p><\/blockquote>\n
\t  (b)\t   the\t    co-ordinated
\n\t  development of  the supply and
\n\t  distribution\tof   electricity
\n\t  within the  State in\tthe most
\n\t  afficient    and    economical
\n\t  manner,    with     particular
\n\t  reference to\tsuch development
\n\t  in  areas  not  for  the  time
\n\t  being\t served\t  or  adequately
\n\t  served by the licensee;\n<\/p><\/blockquote>\n
\t  (c)  the   simplification  and
\n\t  standardisation of methods and
\n\t  rates\t of   charges  for  such
\n\t  supplies;\n<\/p><\/blockquote>\n
\t  (d)\t the\textension    and
\n\t  cheapening  of   supplies   of
\n\t  electricity\t of\tsparsely
\n\t  developed areas.\n<\/p><\/blockquote>\n
     (3)  Nothing   in\t the   foregoing
\n     provisions of  this  section  shall
\n     derogate  from  the  power\t of  the
\n     Board, if it considers it necessary
\n     or\t expendient   to  fix  different
\n     tariffs   for    the   supply    of
\n     electricity of any person not being
\n     a licensee,  having regard\t to  the
\n     geographical position  of any area,
\n     the  nature   of  the   supply  and
\n     purpose   for   which   supply   is
\n     required  and  any\t other\trelevant
\n     factors.\n<\/p><\/blockquote>\n
     (4) In  fixing the tariff and terms
\n     and conditions  for the  supply  of
\n     electricity, the  Board  shall  not
\n     show  undue   preference\tto   any
\n     person”.\n<\/p><\/blockquote>\n
13.  Section 78\t enables the  Government to  frame Rules  to
\ngive effect  to\t the  provisions  of  the  Act.\t Section  79
\nempowers the  Board to make regulation not inconsistent with
\nthe Act\t and the Rules made thereunder to provide for all or
\nany of\tthe matters  set out  therein. On  of them  is\t“(i)
\nprinciples governing  the supply to electricity by the Board
\nto persons  other than\tlicensees under Section 49”. Section
\n79A provides  that every  rule made  by the State Government
\nunder Section  78 and  every regulation\t made by  the  Board
\nunder Section  79 shall be laid as soon as may be before the
\nState Legislature.\n<\/p>\n
II. RELEVANT CLAUSES OF THE TERMS AND CONDITIONS OF SUPPLY\n<\/p>\n
14.  Clause 39\twhich is  the main  target of attack defines
\nvarious malpractices  provides for  enquiries  by designated
\nofficials. Clauses 39.4, 39.5., 39.6 read as follows :-\n<\/p>\n
     Clause 39.4  Officers authorised to
\n     inspect  and  deal\t with  cases  of
\n     malpractice and pilferage of energy
\n     are as indicated below :\n<\/p><\/blockquote>\n
Sl.No.\tParticulars\t    Officer or officers authorised
\n\tTo inspect the\tTo disconnect and  issue  To make
\n\tpremises and\tprovisional assessment\t  final ass.<\/p>\n
\n\tmake provision\tnotice to the consumer\t   appellate\n\t-al assessment\t\t\t\t   authority\n<\/pre>\n
————————————————————\n<\/p>\n
 2.\tH.T. Service\t ADE.DE\t   ADE\t    S.E.     C.E.\n<\/p>\n
\tincluding\t & S.E.\t   incharge\n\ttemporary\n\tsupply\n<\/pre>\n
————————————————————\n<\/p>\n
     \"Clause   39.5    Where   on    the\n     inspection\t     of\t      consumer's\n<\/pre>\n
     installations or premises or on the
\n     basis of  other information or data
\n     there is  scope for suspecting that
\n     a consumer\t is guilty of “supply of
\n     electricity to  any service, which,
\n     is disconnected  by the  Board”  of
\n     “pilferage of  energy”, the officer
\n     authorised in  this benefit  by the
\n     Board  may\t  without  prejudice  of
\n     Board’s   other\trights,\t   casue
\n     consumer\t to\tbe     forthwith
\n     disconnected without any notice and
\n     report the\t mattera  to  the  Final
\n     assessing authority. In the case of
\n     the malpractices other than the one
\n     mentioned above,  supply  shall  be
\n     disconnected only\tin the\tevent of
\n     failure on the part of the consumer
\n     to pay half of the estimated amount
\n     within the period stipulated in the
\n     previsional assessment notice.”\n<\/p>\n
     “Clause 39.6 Provisional assessment
\n     on the  loss sustained by the Board
\n     and payment:\n<\/p>\n
\t  The inspecting  officer  shall
\n     make a  provisional estimate of the
\n     loss incurred  by the  Board by the
\n     reason  of\t  the\tmalpractice   or
\n     pilferage of  energy  committed  by
\n     the   consumer   which   shall   be
\n     assessed as  mentioned herein below
\n     and  intimated   to  the  Assistant
\n     Divisional Engineer  concerned. The
\n     A.D.E.   concerned\t  shall\t  ensure
\n     disconnection  of\t such\tservices
\n     forthwith\t in    the    case    of
\n     malpractice   with\t  reference   to
\n     supply  of\t  electricity\tto   any
\n     disconnected service  or  pilferage
\n     of energy. The Assistant Divisional
\n     Engineer  shall   then  serve   the
\n     consumer\twith\ta   notice    of
\n     provisional   assessment\tin   the
\n     prescribed form.  Such notice shall
\n     mention, interalia.,\n<\/p>\n
\t  (a) the matters noticed during
\n\t  the\t inspection\tof    he
\n\t  consumer’s\tpremises     and
\n\t  installations.\n<\/p>\n
\t  (b)\t the\t reasons     for
\n\t  disconnection already effected
\n\t  or propose to be effected and\n<\/p>\n
\t  (c) a\t provisional estimate of
\n\t  the  losss  sustained\t by  the
\n\t  Board\t   computed    in    the
\n\t  prescribed manner.\n<\/p>\n
     He shall inform the consumer to pay
\n     half of  the provisionally assessed
\n     amount, pending  the enquiry  to be
\n     conducted\t  by\tthe    concerned
\n     authority into  the case, to secure
\n     restoration of  supply where supply
\n     has been  disconnected or\tto avoid
\n     discontinuance of supply where such
\n     payment  is   made\t the  consumer’s
\n     service shall  not b e disconnected
\n     on\t  this\t  ground   pending   the
\n     enquiry”.\n<\/p>\n
15.  The provisional  assessment of  the loss referred to in
\nClause 39.6  shall made\t on the principles set out in clause
\n39.7.1 and  39.7.2. It\tis provided that assessment shall be
\nmade for  the estimated\t period of  malpractice subject to a
\nmaximum of one year  prior to the date of inspection. Clause
\n39.8.1 and  39.8.2 provide for provisional assessment notice
\nin the case of malpractices other than supply of electricity
\nto disconnected premises and disconnection of service on the
\nconsumer’s failure to pay the provisionally assessed amount.\n<\/p>\n
16.  Clause 39.9 is in the following terms :\n<\/p>\n
     Clause 39.9.1 After the provisional
\n     assessment notice\tis servaed  upon
\n     the consumer as mentioned in clause
\n     39.3 thereof the officer authorised
\n     in this  behalf by\t the Board  (see
\n     statement\treferred  to  in  clause
\n     39.4  above)  shall  issue\t a  show
\n     cause   notice    in   the\t   forms
\n     prescribed therefore  advising  the
\n     consumer to file his representation
\n     if any,  within 30\t days  from  the
\n     receipt of the notice.\n<\/p><\/blockquote>\n
     Clause 39.9.2  The said  officer of
\n     the Board\tshall, after  the expiry
\n     of\t the  aforesaid\t notice\t period,
\n     enquire into  the matter  and after
\n     giving  reasonable\t opportunity  to
\n     the  consumer   and   taking   into
\n     account  all   relevant  facts  and
\n     circumstances shall  decide whether
\n     the    consumer\thas    committed
\n     malpractice or  pilferage of energy
\n     and  if  so  satisfied  proceed  to
\n     assess to the best of his judgment,
\n     the loss  sustained by the Board on
\n     account  of   such\t malpractice  or
\n     pilferage\t of    energy\tby   the
\n     consumer.\tThe   consumer\tmay   be
\n     represented by  an advocate  at the
\n     time of  personal hearing\tprovided
\n     the    consumer\t files\t  proper
\n     vakalatnama.\n<\/p><\/blockquote>\n
     Clause   39.9.3 The final assessing
\n     authority shall  then pass an order
\n     setting out his conclusions and the
\n     reasons thereof  and communicate  a
\n     copy of  the order\t to the consumer
\n     and demand\t the amount  if any  due
\n     from the  consumer on  the basis of
\n     such order\t after giving  credit to
\n     the amounts paid by him.
\n     Clause 39.9.4  Payment of amount of
\n     final  assessment.\t  The\tconsumer
\n     shall pay\tto the\tBoard within  30
\n     days  of\tthe  receipt   of  final
\n     assessment\t  order,   the\t amounts
\n     demanded therein”.\n<\/p><\/blockquote>\n
17.  Against the order of final assessment an appeal lies to
\nthe designated\tauthority. The\tappellant may be represented
\nby  an\tadvocate  before  the  appellate  authority  at\t the
\nhearing. The  appellate authority shall give his reasons for
\nhis conclusion\texcept in  cases where the appeal is allowed
\nin toto.  Clause 39.10.6  provides that\t the order on appeal
\nshall be  final subject to clause 39.11 and be not liable to
\nbe questioned  in any  court of\t law clause  39.11 is in the
\nfollowing terms :\n<\/p>\n
     Clause 39.11  The Chairman\t or  his
\n     nomince  (the   nominee  being  any
\n     member of\tthe Board)  may suo moto
\n     at any  time call\tfor and\t examine
\n     the record\t of any\t order passed or
\n     proceedings recorded  by the final)
\n     assessment authority  or  appellate
\n     authority\tfor   the   purpose   of
\n     satisfying\t himself  regarding  the
\n     propriety of legality of such order
\n     of proceeding  and\t may  pass  such
\n     order in  reference thereto,  as he
\n     may think fit. No orders adverse to
\n     the  consumer   shall   be\t  passed
\n     without\tgiving\t   notice    and
\n     opportunity for  making  a\t written
\n     representation to the consumer. The
\n     order passed by the Chairman or his
\n     nominee  shall  be\t final\tand  not
\n     liable  to\t be  questioned\t in  any
\n     court of  law. The\t consumer  shall
\n     have  no\tright  to   invoke  this
\n     provision”.\n<\/p><\/blockquote>\n
18. Clause 46 reads thus :-\n<\/p>\n
\t  “Interpretation:\t   These
\n     conditions\t shall\t be   read   and
\n     construed as  being subject  in all
\n     respects to  the provisions  of the
\n     Indian   Electricity   Act,   1910,
\n     Indian Electricity\t Rules, 1956 and
\n     the Electricity  (Supply) Act, 1948
\n     in force  and as  amended from time
\n     to time  and to  the provisions  of
\n     any  other\t  law  relating\t to  the
\n     supply of\telectricity for the time
\n     being in  force and  nothing herein
\n     above contained in these conditions
\n     shall  abridge   or  prejudice  the
\n     rights  of\t  the  Board   and   the
\n     consumer under  any Central  Act or
\n     State    Act    or\t   rules    made
\n     thereunder”.\n<\/p>\n
19.  Appendix-III contains  the form  of H.T. agreement. The
\nrelevant clauses read as follows :\n<\/p>\n
     APPENDIX  –   III\tForm   of   H.T.
\n     Agreement
\n\t  “Agreement executed  this  day
\n     of\t …….19\t by……….for
\n     themselves\/himself\/itself\tand  for
\n     their\/his\/her\t   assigns   and
\n     successors in  favour of the Andhra
\n     Pradesh State  Electricity Board  a
\n     statutory\tcorporation  constituted
\n     under section  5 of the Electricity
\n     (Supply)\tAct,\t1948   and   its
\n     successors and assigns herein after
\n     called the Board.<\/p><\/blockquote>\n
\n     2. SUPPLY OF POWER\n\t  I\/We the  above mentioned have\n     requested\tthe  Board    to  Supply\n<\/pre>\n
     Electricity at High Tension for the
\n     purpose of ……….and the Andhra
\n     Pradesh  State   Electricity  Board
\n     agreed to\tafford\tsuch  conditions
\n     notified by  them from time to time
\n     under section 49 of the Electricity
\n     (Supply) Act, 1943 and those herein
\n     after mentioned.\n<\/p><\/blockquote>\n
     3. LOAD\/MAXIMUM DEMAND
\n\t  I\/We agree  to take  from  the
\n     Andhra  Pradesh  State  Electricity
\n     Board Electric  Power for a maximum
\n     load not  exceeding……KVA  which
\n     shall  b\te  taken  to  be  my\/our
\n     contracted demand for our exclusive
\n     use   for\t  the\tpurposes   above
\n     mentioned,\t\t at\t     our
\n     Mills\/Factory\/premises\tsituated
\n     at………………My\/our
\n     contracted\t       load\t   shall
\n     be…………..Hp not  effect  any
\n     change in\tthe  maximum  demand  or
\n     contracted load.\n<\/p><\/blockquote>\n
     4. RE-SALE OF ELECTRIC POWER
\n\t  I\/We\tundertake   that;   I\/We
\n     shall not\tsell  electrical  energy
\n     obtained\tunder\tthis   agreement
\n     without the  sanction in writing of
\n     the Board.\n<\/p><\/blockquote>\n
     5.\t OBLIGATION   TO   COMPLY   WITH
\n     REQUIREMENT OF  ACTS AND  TERMS AND
\n     CONDITIONS OF SUPPLY:<\/p><\/blockquote>\n
\t  I\/We\tfurther\t  undertake   to
\n     comply with all the requirements of
\n     the Indian\t Electricity Act,  1910,
\n     the Electricity  (Supply) Act, 1948
\n     the Rules thereunder, provisions of
\n     the tariffs  scale of Miscellaneous
\n     and   General   charges   and   the
\n     Mascellaneous and\tGeneral\t charges
\n     and the  terms  and  conditions  of
\n     supply prescribed by the Board from
\n     time to time and agree
\n\t …………….\n<\/p>\n
\t …………….\n<\/p>\n
\t …………….\n<\/p>\n
\t  I\/We hereby agree that if I\/We
\n     am\/are found  indulging in their of
\n     energy  or\t  any\tmalpractice   in
\n     respect of use of electrical energy
\n     I\/We shall\t pay additional\t charges
\n     as may be levied by the Board. I\/We
\n     also agree\t that in  such an  event
\n     the Board shall in addition to levy
\n     of the additional charge have right
\n     to disconnect supply of electricity
\n     to my\/our\tpremises for such period
\n     as may be decided by the Board.\n<\/p>\n
\t       Signature of Consumer”.\n<\/p>\n
IV NATURE OF AGREEMENT – STATUTORY OF CONTRACTUAL\n<\/p>\n
20.  We have  already seen that Section 49 of the Supply Act
\nempowers the Board to prescribe such terms and conditions as
\nit thinks  fit for supplying electricity to any person other
\nthan a\tlicensee. The  section empowers\t the Board  also  to
\nframe uniform  tariffs for  such supply. Under Section 79(j)
\nthe  Board   could  have   made\t regulation   therefore\t but
\nadmittedly no  regulation has so far been made by the Board.
\nThe   Terms and\t Conditions of\tSupply were notified in H.P.
\nMs. No.\t 690 dated  17.9.1975  in  exercise  of\t the  powers
\nconferred by  Section 49  of the  Supply Act. They came into
\neffect from  20.10.1975. They  were made  applicable to\t all
\nconsumers availing supply of Electricity from the Board. The
\nsection in  the Act does not require the Board to enter into
\na contract  with individual consumer. Even in the absence of
\nan individual  contract, the  Terms and Conditions of Supply
\nnotified by the Board will be applicable to the consumer and
\nhe will\t be bound  by them.  Probably in  order to avoid any
\npossible plea  by the  consumer that  he had no knowledge of
\nthe Terms  and Conditions  of Supply,  agreements in writing
\nare entered with each consumer. That will not make the terms
\npurely contractual.  The Board in performance of a statutory
\nduty  supplied\t energy\t on   certain  specific\t  terms\t and
\nconditions  framed   in\t exercise   of\ta  statutory  power.
\nUndoubtedly  the  terms\t and  conditions  are  statutory  in
\ncharacter and they cannot be said to be purely contractual.\n<\/p>\n
21.  In Punjab\tState Electricity  Board Versus\t Bassi\tCold
\nStorage, Kharar\t and Another  1994 Supp (2) S.C.C. 124, this
\ncourt held  that  the  conditions  of  supply  are  akin  to
\nsubordinate legislation.\n<\/p>\n
22.  In Bihar  State Electricity  Board\t and  Others  Versus
\nParmeshwar Kumar  Agarwala and\tOthers (1996)  4 S.C.C. 686,
\nthe court  held that  they are\tpart of\t statutory terms and
\nconditions. In para 16 of the judgment the court said :\n<\/p>\n
\t  “Before  we\tadvert\tto   the
\n     effect  produced\tby  a\tcombined
\n     reading of\t the  four  clauses,  it
\n     deserves to be pointed out that the
\n     terms    and     conditions    have
\n     sacrosanctity, in\tthat Rule  27 of
\n     the Indian Electricity Rules, 1956,
\n     framed by\tthe Central  Electricity
\n     Board in  exercise of  power  under
\n     Section 37\t of 1910  Act has,  read
\n     with Annexure  VI thereof, provided
\n     the  model\t  conditions  of  supply
\n     which are required to be adopted by
\n     the State\tBoards.\t It  is\t on  the
\n     basis\t of   this   statutorily
\n     prescribed\t model,\t  with\tsuitable
\n     variations, that  energy  had  been
\n     supplied  by   the\t Board\t to  the
\n     consumers. The model conditions can
\n     be said  to be  akin to  the  model
\n     Standing\tOrders\t prescribed   by
\n     Industrial\t  Employment   (Standing
\n     Orders)  Act,   1947,  which,  when
\n     terms  and\t conditions  of\t service
\n     between the  employer and employees
\n     and they  govern  the  relationship
\n     between the  parties,  as\theld  in
\n     Workmen V.\t Firestone Tyre & Rubber
\n     Co. of India (P) Ltd., SCC<\/a> at p.832
\n     (1973)  1\t S.C.C.\t 813.\tWe   are
\n     inclined to  think that  similar is
\n     the effect of terms and conditions,
\n     on which  a  State\t Board\tsupplies
\n     energy to the consumers”.\n<\/p><\/blockquote>\n
23.  Learned counsel  for the consumers has referred to Shri
\nVidya Ram  Misra Versus\t Managing Committee, Shri Jai Narain
\nCollege (1972)\t1 SCC  623. In\tthat case Statute 151 framed
\nunder the  Lucknow University  Act, 1920  provided that\t the
\nterms and  conditions  of  service  of\ta  teacher  must  be
\nincorporated in\t the contract to be entered into between the
\nteacher concerned  and t  he college.  Hence the  court held
\nthat the  terms and  conditions mentioned in Statute 151 had
\nproprio vigore\tno force  of law.  That\t decision  has\t  no
\nrelevance here.\n<\/p>\n
24.  The ruling\t in  Executive\tCommittee  of  Vaish  Degree
\nCollege. Shamli\t and others Versus Lakshmi Narain and others
\n(1976)\t2   SCC\t 58   cited  by\t  learned  counsel   has  no
\napplicability as  the court  found on  the  facts  that\t the
\nExecutive Committee was not a statutory body.\n<\/p>\n
25.  We are  unable to uphold the view expressed by the Full
\nBench in  the judgment\tunder  appeal  that  the  terms\t and
\nconditions of  supply are purely contractual. In our opinion
\nthe  Terms   and  Conditions  of  Supply  are  statutory  in
\ncharacter.\n<\/p>\n
V. The Supply Act\n<\/p>\n
26.  It is  contended  that  Clause  39\t of  the  Terms\t and
\nConditions of  Supply falls  outside the  power conferred on
\nthe Board in Sec. 49 of the Supply Act. According to learned
\ncounsel the  power of  the Board  to impose  such terms\t and
\nconditions as  it thinks  fit, is  expressly made subject to
\nthe other  provisions of  the Act which means that the Board
\ncan impose  only such  conditions as  may  be  found  in  an
\nagreement between  other ordinary  licensees and  consumers.
\nThe  contention\t  is  that  the\t Board\tcan  neither  define
\n`malpractices’ nor  prescribe an  adjudicatory machinery for
\nassessing and  levying\tpenal  damages.\t Such  matters\tare,
\naccording to counsel, essential legislative functions. Which
\ncannot be delegated to the Board.\n<\/p>\n
27.  We are  unable to\taccept the  contention.\t Section  49
\nempowers the  Board to supply electricity on `such terms and
\nconditions as  it thinks  fit’. It  may also  frame  uniform
\ntariffs. We  have found\t that the  terms and  conditions  of
\nsupply are  statutory in  character. They can be invalidated
\nonly if\t they are  in conflict with any provision of the Act
\nor the\tConstitution. Learned  counsel have  not shown to us
\nany provision  in the  Supply Act with which Clause 39 is in
\nconflict. In so far as the Supply Act is concerned, argument
\nhovers around  Section 49  only. The only limitation in that
\nSection is  that the terms and conditions of supply should b
\ne subject  to the  provisions of the Act. Clause 39 does not
\nviolate any provision in the Supply Act. It is the statutory
\nduty of\t the Board  to arrange for the supply of electricity
\nthroughout the\tState and  for transmission and distribution
\nof the same in the most efficient and economical manner. For
\nthat purpose  it has necessarily got to prevent unauthorised
\nuser, pilferage\t or malpractices by the consumers. Hence the
\nnecessary safeguards  have to  be provided  as part  of\t the
\nconditions of  supply so that the consumers will be bound by
\nthem. While  on the  one hand,\tthe Board  has to recoup the
\nloss suffered  by such\tpilferage or other malpractices., it
\nhas  also   on\tthe   other  got  to  stop  immediately\t the
\ncontinuation thereof.  Hence the  terms\t and  conditions  of
\nsupply have to provide for compensation as well as immediate
\ndisconnection. For  ascertaining the  loss  and\t fixing\t the
\ncompensation, uniform  procedure has  to  be  framed  and  a
\nmachinery constituted.\tClause 39  is only doing that. Every
\nconsumer is  made fully aware of the said terms and he signs
\nthe contract  only on that basis. He gives an undertaking in
\nthat  contract\t that  if  he  is  found  indulging  in\t any
\nmalpractice etc.  he shall  pay additional charges as may be
\nlevied by  the Board  and that\tt he Board have the right to
\ndisconnect supply  of electricity  to his  premises for such
\nperiod as may be decided by the Board.\n<\/p>\n
28.  Learned  counsel\tfor  the  consumers  has  drawn\t our
\nattention to Powell Versus May (1946) All E.R. 444 wherein a
\nbye-law made by the local country council was struck down as
\nultra vires the powers of the council as it was repugnant to
\nthe provisions\tof  certain  statutes.\tThe  ruling  has  no
\napplication here.\n<\/p>\n
29.  Strong reliance  is  placed  on  the  decision  of\t the
\nQueen’s Bench  Division in  Commissioners of  Customs\t and
\nExcise Versus  Cure & Deeley Ltd. (1961) 3 All E.R. 641. The
\nCommissioners  of  Customs  and\t Excise\t were  empowered  by
\nSection 33  (1) of  Finance Act\t 1940  to  make\t regulations
\nproviding for  any matter  for which  provision ‘appears  to
\nthem necessary”\t for the  purpose of  “giving effect to” the
\nstatutory  provisions  relating\t to  purchase  tax  “and  of
\nenabling them  to discharge their functions thereunder”. The
\nCommissioners  made   the  Purchase  Tax  Regulations  1945.
\nRegulation 12  provided that if any person failed to furnish
\na return  as required  by the  regulation the  Commissioners
\nmight determine\t the amount  of tax appearing to them to b e
\ndue and\t demand payment\t thereof which shall be deemed to be
\nthe proper  tax. The  Court held that the said Regulation 12
\nwas ultra  vires on three grounds :(i) It was no part of the
\nfunctions  assigned   to  the\tCommissioners  to   take  on
\nthemselves the\tpowers of  a High  Court  Judge\t and  decide
\nissues of fact and law as between the Crown and the subject;\n<\/p>\n
(ii) It\t renders the  subject liable  to pay such tax as the
\nCommissioners believed\tto  be\tdue,  whereas  the  charging
\nsection impose a liability to pay such tax as in law is due”\n<\/p>\n
(iii) It was capable of excluding the subject from access to
\nthe courts and of defeating pending proceedings.\n<\/p>\n
30.  The ruling\t does not  help the  consumers in this case.
\nThe impugned  Clause 39\t does  not  suffer  from  the  vices
\nmentioned above.  No doubt, Clause 39.10.6 provides that the
\norder on  appeal shall\tbe final subject to Clause 39.11 and
\nnot liable to be questioned in any Court of Law. But learned
\nsenior counsel for the Board, Mr. Shanti Bhushan, has fairly
\nconceded that  the orders are subject to judicial review and
\nthe jurisdiction  of Courts  cannot be\ttaken away  by\tthat
\nClause. It  is to be noted that the trial court and the High
\nCourt and  the High  Court have\t in  this  case\t upheld\t the
\njurisdiction of\t the civil  court to entertain the suit an d
\nconsider the  validity of  the orders  passed  by  he  Board
\nagainst the consumers.\n<\/p>\n
31.  Reliance is  placed on  the decision  in Indian Express
\nNewspaper (Bombay)  pvt. Ltd.  and others  etc. etc.  versus
\nUnion of  India &  others etc.etc.  (1985) 1  S.C.C. 641  to
\nsupport the  argument that  Clause 39  is in  breach of\t the
\nprinciple of  delegated Legislation.  According\t to  learned
\ncounsel the terms and conditions of supply may tantamount to
\na subordinate  legislation but\tit must yield to the plenary
\nlegislation and that the Supply Act never intended to confer
\npowers on  the Board  to frame\tsuch terms and conditions of
\nsupply including  the power  to adjudicate a dispute between
\nitself and  the consumer  and assess  the damages.  We\thave
\nalready adverted  to the  provisions of\t Section 49  of\t the
\nSupply Act  and pointed\t out that the power conferred on the
\nBoard is not circumscribed by any limitation other than that
\nit should  not contravene  the provisions of the Act. We are
\nof the\topinion that  Section 39  is not  violative  of\t any
\nprovisions of the enactment.\n<\/p>\n
32.  In Jiyajeerao  Cotton Mills  Ltd. &  Anr, Versus Madhya
\nPradesh Electricity Board & Another 1989 Supp. (2) S.C.C. 52
\nthe court held that the Board has powers under Section 49(1)
\nand   (3) to  levy higher  charges for excess consumption of
\nelectricity and\t it is\tnot essential  for the Board to make
\nregulations indicating the basis for such levy before making
\nthe demand.\n<\/p>\n
33.  Our attention  has been  drawn to\tAgricultural  Market
\nCommittee Versus  Shalimar Chemicals  Works  Ltd.  (1977)  5
\nSupp. S.C.C.  516 in  which it has been held that a delegate
\nwhile making subsidiary rules or regulations cannot widen or
\nrestrict the  scope or\tt he Act or the policy or principle.
\nThe proposition has no application in the present case as we
\nhave found that the Board has not in any way violated any of
\nthe  provisions\t  of  the  Act\tby  framing  the  terms\t and
\nconditions of  supply including\t Clause 39.  Hence we reject
\nthe contention\tthat Clause 39 is ultra vires the provisions
\nof the Supply Act.\n<\/p>\n
VI. The Electricity Act\n<\/p>\n
34.  It is  vehemently argued  that provisions\tin Clause 39
\nrun counter  to the  relevant provisions  of the Electricity
\nAct. In\t particular, it\t is said that Clause 39.1 covers the
\nsame field  as that  of ss.21  (4) and\t26 (6)(b) and Clause
\nVI(3) of  the Schedule in the said Act. According to learned
\ncounsel malpractice  and pilferage defined in CI.39 would be
\ncovered by  the aforesaid  provisions of  that Act  and\t the
\nauthority to  decide the  same is  the Electrical  Inspector
\nappointed by  the Government  and not  he  officers  of\t the
\nBoard. It  is also  argued that\t Clause 39.2  and  39.3\t are
\ncontrary to Sec.20 of the Act and Clause 39.4 is contrary to
\nSec. 36\t of the\t Act read  with Rules  4 to  6 of the Indian
\nElectricity Rules.  According to learned counsel, the entire
\nclause 39  is violative of the provisions of Clause VI(I) in
\nthe Schedule to the Electricity Act as the latter enjoins on
\nthe Board  to continue the supply of electricity `save in so
\nfar as\tprevented  by  cyclone,\t floods,  storms  and  other
\noccurrences beyond  its control. In short, the contention of
\nthe learned  counsel for the consumers is that the procedure
\nprescribed in  the Electricity Act and the Rules would apply
\nto all\tsituations arising between he Board and the consumer
\nand the\t same should be followed. According to him Clause 39
\nis invalid  and unenforceable in as much as it deviated from
\nthe provisions of the Electricity Act and the Rules.\n<\/p>\n
35.  We\t are   unable  to   accept  any\t  of  the  aforesaid
\ncontentions. We have carefully perused the provisions of the
\nElectricity Act and we find that those provisons provide for
\na  different  situation.  Clause  39  will  come  into\tplay
\nwhenever there\tis malpractice\tor pilferage  on the part of
\nthe  consumer  or  a  fraud  played  by\t the  consumer.\t The
\nElectrical Inspector  has no jurisdiction to deal with those
\nmatters. He  can  be  approached  only\tw  hen\tthere  is  a
\ndefective meter\t or any\t defect in wries, fittings, works or
\napparatus. As  regards, CI.  (VI) of  the  Schedule  to\t the
\nElectricity Act,  it is\t not applicable\t unless distribution
\nmains have  been laid  down under  the provisions  of Clause
\n(IV) or\t Clause (V)  and the  supply of energy through those
\nmains of  any of  them\thas  commenced.\t The  provisions  of
\nSection 26  of the  Supply Act\texclude the applicability of
\nClauses (1)  to (V)  of the schedule tot he Board. Hence CI.
\n(VI) of\t the schedule cannot by itself apply and that is why
\nthe second proviso to Section 26 clarifies the position that
\nthe provisions of Clause (VI) of the Schedule shall apply to
\nthe Board  in respect  of that\tarea only where distribution
\nmains have  been laid by the Board and the  supply of energy
\nthrough any  of them has commenced. The records before us do
\nnot disclose  any pleading on the part of the consumers that
\nthe requirement\t of the\t second proviso\t to Section  26 have
\nbeen satisfied.\t No question  has been raised in that regard
\nbefore the trial court. No doubt, the Full Bench of the High
\nCourt has placed reliance on Clause (VI) of the Schedule and
\nthe grounds  raised in\tthe Special  Leave Petition filed by
\nthe Board  do not refer to the same. But in the absence of a
\nspecific pleading to t hat effect it cannot be presumed that
\nClause (VI)  of the Schedule would apply. Even assuming that
\nclause\tapplied,  it  will  not\t alter\tthe  situation.\t The
\ndifference or  dispute referred\t to in sub-cl.(3) of CI.(VI)
\nwill  not  cover  fraudulent  malpractice  or  pilferage.  A
\nperusal of  the said  sub\/clause makes\tit evident  that the
\nmatter shall  be referred to an Electrical Inspector only in
\ncases of  defects mentioned  therein and  not otherwise.  We
\nhave no\t hesitation to\treject\tthe  contention\t of  learned
\ncounsel for  the consumers  and hold  t hat he provisions in
\nclause\t39   do\t not   contravene  the\t provisions  of\t the
\nElectricity Act.\n<\/p>\n
36.  In State  of U.P. and others Versus Hindustan Aluminium
\nCorpn. and  others (1979)  3 S.C.C. 229 the Court considered
\nthe  expression\t “regulating”  in  Section  22\t(b)  of\t the
\nElectricity Act\t and observed  that the word “regulate” does
\nnot  include   prohibition.  The  ruling  has  no  relevance
\nwhatever in  the present  case. In  Andhra Pradesh  Carbides
\nLtd. and  another versus  Andhra Pradesh  State\t Electricity
\nBoard, Hyderabad  and others  AIR 1986\tAndhra Pradesh\t37 a
\nSingle Judge  of the  Andhra Pradesh  High Court  held t hat
\nregulations made  under the  Supply Act shall not be covered
\nby Section 70 thereof and that Section 49 read with  Section
\n70 of  the said\t Act does  not\tempower\t the  provisions  of
\nSection 24 of the Electricity Act. The ruling has no bearing
\nin the\tpresent case  as we have found that Clause 39 of the
\nTerms  and  Conditions\tof  Supply  do\tnot  contravene\t the
\nprovisions of either Act.\n<\/p>\n
37.  In M.P.E.B.  and others versus Smt. Basantibai 1988 (1)
\nS.C.R 890  this Court  held that  a  dispute  regarding\t the
\ncommission of fraud in tampering with the meter and breaking
\nthe body-seal  is one outside the ambit of Section (26(6) of
\nthe  Electricity   Act\tan   Electrical\t Inspector   has  no
\njurisdiction to\t decide such  cases of fraud. This Court has
\nclearly pointed\t out that under Section 26(6) if the dispute
\nis as to whether the meter is or is not correct, it is to be
\ndecided by  the Electrical  Inspector. We  are\tentirely  in
\nagreement with that judgment.\n<\/p>\n
38.  In Municipal  Corporation of Delhi versus Ajanta Iron &
\nSteel Company  (Pvt.) Ltd.  (1990) 2  S.C.C. 659  this court
\nfound that there was a provision in the agreement between he
\nDelhi Electric\tSupply\tUndertaking  and  the  consumer\t for
\nservice of  notice as  a  pre-requisite\t for  disconnection.
\nHence this  Court upheld the decree for mandatory injunction
\ndirecting restoration  of supply of electricity discontinued
\nduring the  pendency of\t the  suit  without  issue  of\tsuch
\nnotice.\n<\/p>\n
39.  In M.P.  Electricity Board,  Jabalpur and others Versus
\nHarsh Wood  Products and  Another (1996)  4 S.C.C.  522\t the
\nCourt held  that Section  24 of\t the Electricity  Act  would
\napply to  a case  of regular supply made and prior demand of
\npayment of  electricity charges\t and it\t does not  apply  to
\ndemand to  detection of\t pilferage.  The  court\t upheld\t the
\nvalidity of  similar conditions of supply of electricity and
\nheld that on a prima facie conclusion of power-theft reached
\nby the\tauthorities, it\t was not  necessary to\tgive further
\nhearing to  the consumer  and the  action taken by the Board
\ndisconnecting the supply was not violative of Article 20 (1)
\nand 14\tof the\tConstitution and  the principles  of natural
\njustice.  We  are  in  agreement  with\tthe  view  expressed
\ntherein.\n<\/p>\n
40.  In Belwal\tSpinning Mills\t&  Ors,\t Versus\t U.P.  State
\nElectricity Board  and another (1977) 6 S.C.C. 740 the Court
\ndealt with the provisions of Sections 26(6) and 26(7) of the
\nElectricity Act\t alongwith Section  20 thereof. A perusal of
\nthe judgment  shows that  the Bench was of the view that the
\nprovisions of  Section 26  would apply only when the dispute
\nrelated to  the correctness  of the  meter. That ruling also
\nsupports the contention of the Board in this case.
\nVII. Article 14, Constitution of India.\n<\/p>\n
41.  What remains  to be  considered is\t whether Clause 3 is
\nviolative of  Article 14 of the Constitution of India. Under
\nthis head,  the argument of learned counsel for consumers is
\nthat the  provisions in\t the clause  are wholly unreasonable
\nand against  the principles of Natural Justice. According to
\nthem, the  clause enables  the officers\t to  disconnect\t the
\nservice on  a suspicion\t of malpractice and the consumer has
\nto pay\t50% of\tthe  provisional  assessment  amount  before
\ngetting it restored. It is also contended that the officials
\nof the\tBoard are  enabled to  judge its  own cause  and the
\ndoctrine  of   bias  will   apply.  In\t support  of   these
\ncontentions, our attention is drawn to :\n<\/p>\n
1.   J. Mohapatra and Co. and Another versus State of Orissa
\nand Another  (1984) 4 S.C.C. 103.\n<\/p>\n
2.   State of  Karnataka versus Shree Rameshwara Rice Mills,
\nThirthahalli, (1987( 2 S.C.C. 160.\n<\/p>\n
3.   Krishna Bus  Service Pvt.\tLtd. versus State of Haryana
\nand Others, (1985) 3 S.C.C. 711.\n<\/p>\n
4.   Rattan Lal\t Sharma versus\tManaging Committee, Dr. Hari
\nRam  (CO-education)  Higher  Secondary\tSchool\tand  Others,
\n(1993) 4 S.C.C 10.\n<\/p>\n
5.   LIC of  India and\tAnother versus\tConsumer Education &
\nResearch Centre and Others, (1995) 5 S.C.C. 482.\n<\/p>\n
     None of  the ruling  will apply  in this  case. We have
\nalready referred  to the  judgment of  this  court  in\tM.P.
\nElectricity Board,  Jabalpur  and  others  versus  Harshwood
\nProducts Case  (1996) 4\t S.C.C. 522 wherein it was held that
\nwhen power  theft was  found  by  the  officials,  immediate
\ndisconnection of  the supply was not violative of Article 14
\nof the\tConstitution and principles of Natural Justice would
\nnot apply.\n<\/p>\n
42.  In\t Petal\t Parshottamdas\tVanmalidas,  versus  Gujarat
\nElectricity Board  and another,\t AIR  1987  Gujarat  188,  a
\nDivision Bench\tof Gujarat  High  Court\t considered  similar
\nconditions and upheld their validity. The Bench said :\n<\/p>\n
     “Thus, it\tis clear  that the Board
\n     has formulated  such a condition in
\n     order to  safeguard  its  interest.
\n     Such a  condition is  there for the
\n     purpose  of  checking,  apart  from
\n     other   things,\tthe   theft   of
\n     electricity. It  is not  a case  of
\n     any defective  meter, but\tit is  a
\n     case of theft of electricity by the
\n     consumer concerned.  As a matter of
\n     fact, in  this case  it is\t alleged
\n     that the petitioner, by inserting a
\n     plastic strip, was able to stop the
\n     running of\t the  meter and thereby,
\n     committed theft of electricity. The
\n     condition clearly\tstates as to the
\n     procedure that  has to  be\t adopted
\n     for the  purpose of questioning the
\n     departmental  action   in\t levying
\n     penal charges.  It\t has  also  been
\n     made clear\t in the condition as tot
\n     he limit  to which\t the  Department
\n     can go for the purpose of assessing
\n     the theft\tof  electricity.  In  no
\n     case the Department can go beyond a
\n     period of\tsix months, according to
\n     this condition.  In  Condition  No.
\n     34, we  are able to see that manner
\n     of\t  assessment   also   has   been
\n     specified. It  all these  steps are
\n     taken  by\t the   Department,   the
\n     condition itself  states  that  the
\n     consumer has  a remedy by filing an
\n     appeal to the appropriate authority
\n     within a  specified time.\tThus,  a
\n     conjoint reading  of this Condition
\n     and the  purpose for  which  it  is
\n     intended, clearly\tmakes  out  that
\n     such a  condition is  not arbitrary
\n     or\t unreasonable,\tbut  within  the
\n     powers of\tthe Board  and,\t in  our
\n     opinion, it  does not offend any of
\n     the Articles  of the  Constitution.
\n     The argument  as if  the imposition
\n     of penal  assessment before  filing
\n     an appeal\tis harsh  and makes  the
\n     appeal    illusory\t    cannot    be
\n     appreciated. The  penal assessment,
\n     as\t we   have  stated  already,  is
\n     restricted\t to  a\tlimited\t period.
\n     Such an  assessment was  made after
\n     the Department itself was satisfied
\n     with  regard   to\tthe   theft   or
\n     electricity   committed\tby   the
\n     consumer\tconcerned.   Hence,   it
\n     cannot  be\t said  that  the  appeal
\n     provided under  Condition No. 34 is
\n     an illusory one”.\n<\/p><\/blockquote>\n
We agree with the above opinion.\n<\/p>\n
43.  The principle  `Nemo Judex in Cause Sua’ will not apply
\nin this\t case as  the officers have no personal its with the
\nconsumers. A s pointed out by learned senior counsel for the
\nBoard,\tthey   are  similar  to\t Income\t Tax  or  Sales\t Tax
\nOfficials. There  is nothing wrong in their adjudicating the
\nmatter especially  when the consumers many be represented by
\nan  advocate   and  the\t  formula  for\t making\t provisional
\nassessment is  fixed in\t the clause  itself. As argument has
\nbeen advanced  that  the  Board\t has  recently\tdeleted\t the
\nprovision enabling the consumer to be represented by a power
\nof attorney  agent. it\tis contended  that the\tconsumer  is
\nthereby deprived of the assistance of an expect which may be
\nrequired in  technical matters.\t We do\tnot agree.  When the
\nconsumer is  represented by  a lawyer,\the can certainly get
\nsuch assistance as may be needed from a technical expert. It
\nis stated  by the Board’s learned counsel that the provision
\nwas deleted  as there  was  frequent  misuse  of  the  same.
\nWhatever may  be the  reason for deleting the provision, the
\nexisting part  of the  clause enables  the  consumer  to  be
\nrepresented by an advocate. That is sufficient safeguard for
\nthe consumer.\n<\/p>\n
44.  Learned counsel  for the  consumer\t contends  that\t the
\nagreement with the Board is in the standard form and signing
\nof the\tsame by\t the consumer  will  not  prevent  him\tfrom
\nquestioning it.\t He places  reliance on certain observations
\nin Pawan  Alloys &  Casting Pvt.  Ltd., Meerut\tversus\tU.P.
\nState Electricity  Board and Others (1997) 7 S.C.C. 251. The
\nquestion in that case arose on the withdrawal of development
\nrebate to  the new  industries for  a period of three years.
\nThe court  held that  the principle  of promissory  estoppel
\napplied on  the facts  and circumstances  of the case and by
\nentering into  the standard  agreement containing  provision
\nfor revision  of “rate\tschedule” from\ttime  to  time,\t the
\nconsumer had  not given\t up his\t claim for  the rebate for a
\nperiod of  three years\tas per\tthe promise  held out by the
\nBoard. That case has no bearing here.\n<\/p>\n
VIII.  CONCLUSION\n<\/p>\n
45.  In the result, we uphold the judgment and decree of the
\nHigh Court  in\t C.C.C.A.No. 38\t of 1982  and dismiss  Civil
\nAppeal No.  2558 of 1988. We allow Civil Appeal Nos. 7139 to
\n7144 of 1997 and set aside the judgment of the Full Bench of
\nthe High Court. The Writ Petitions and Writ Appeals shall be
\ndisposed by  the High  Court in\t the light of this judgment.
\nThe parties will bear their respective costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S Hyderabad Vanaspathi Limited vs Andhra Pradesh State Electricity … on 1 April, 1998 Author: Srinivasan Bench: S.C. Agrawal, S.Saghir Ahmad, M. Srinivasan PETITIONER: M\/S HYDERABAD VANASPATHI LIMITED Vs. RESPONDENT: ANDHRA PRADESH STATE ELECTRICITY BOARD AND ORS. DATE OF JUDGMENT: 01\/04\/1998 BENCH: S.C. AGRAWAL, S.SAGHIR AHMAD, M. SRINIVASAN ACT: HEADNOTE: JUDGMENT: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-47499","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S Hyderabad Vanaspathi Limited vs Andhra Pradesh State Electricity ... on 1 April, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-hyderabad-vanaspathi-limited-vs-andhra-pradesh-state-electricity-on-1-april-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Hyderabad Vanaspathi Limited vs Andhra Pradesh State Electricity ... on 1 April, 1998 - 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