IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 5448 of 2002 For Approval and Signature:
HONOURABLE MR.JUSTICE AKIL KURESHI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= POLYLINK POLYMERS (INDIA) LTD - Petitioner(s) Versus STATE OF GUJARAT & 4 - Respondent(s) ========================================================= Appearance :
MR KB PUJARA for Petitioner(s) : 1, GOVERNMENT PLEADER for Respondent(s) : 1, RULE SERVED for Respondent(s) : 2, MR SB VAKIL, SR. ADV. WITH MS LILU K BHAYA for Respondent(s) : 3, SINGHI & CO for Respondent(s) : 4, RULE SERVED BY DS for Respondent(s) : 5, ========================================================= CORAM : HONOURABLE MR.JUSTICE AKIL KURESHI Date : 15/06/2012 CAV JUDGMENT
1. This petition has been filed by one Polylink Polymers (India) Ltd., a company registered under the Companies Act. The petitioner company has challenged the supplementary bills issued by the Electricity Company as also the order dated 6.2.97 passed by the Electrical Inspector as upheld by the Appellate order dated 17.4.2002. Facts may be noted in brief.
2. The petitioner is a consumer of high tension electricity installed by the Gujarat Electricity Board (GEB for short), now succeeded by the Utter Gujarat Vij Company Ltd. Such connection was activated on 7.7.1995. The Gujarat Electricity Board had installed Electronic Trivector Static meter manufactured by L & T Ltd. On 12.7.1996, officers of GEB checked the meter installed at the factory premises of the petitioner Company and found that the meter was running slow by 40.54%. On 16.7.1996, GEB officials once again visited the premises of the petitioner Company and took meter readings. On all three occasions, the meter was found running slow by 32.35, 39.01 and 36.14 respectively. On 1.10.1996, GEB officials installed a new static meter and took the parallel readings of both the meters and found that the original meter was running slow by 40.20%.
2.1 On 1.11.96, GEB issued a supplementary bill of Rs.8,34,690.29 ps. Such bill was raised on the basis of slow running of the mater by 40.54% for the entire period of 15 months from the date of installation, i.e. 7.7.95 to 1.10.96. The petitioner challenged such supplementary bill before the Electrical Inspector by raising dispute about the correctness of the meter under section 26(6) of the Electricity Act, 1910. On 17.12.96, the Electrical Inspector along with the officials of the GEB visited the site and tested the old meter and found it to be running slow by 39.84%.
2.2 The Electrical Inspector vide his order dated 6.2.97 decided the petitioner's dispute with respect to the supplementary bill. The Electricity Inspector held that the meter was running slow by 39.84% but that supplementary bill can be raised only for a period of six months anterior to 12.7.96 i.e. date on which the slow running of the meter was detected. He, therefore, directed the GEB to issue fresh supplementary bill on the basis of slow running of the meter by 39.84% and confining such additional charges for a period between 12.1.96 and 12.7.96.
2.3 Dissatisfied by such order of the Electrical Inspector, the petitioner preferred appeal before the State Government. In the meantime, acting on the order of the Electrical Inspector, GEB issued a revised bill of Rs.5,73,919.96 ps. on 25.2.97. Yet again, GEB authorities issued another supplementary bill for an amount of Rs.5,69,287.68 ps. on 21.5.97 presumably in supercession of the previous supplementary bill. The petitioner had approached this Court more than once at the interim stages. However, it is not necessary to burden this order with the details of such litigation. The appeal of the petitioner came to be dismissed by order dated 17.4.2002. Hence this petition.
3. Learned counsel Shri K.B.Pujara for the petitioner vehemently contended that the GEB committed grave error in issuing supplementary bill. He submitted that there was no accurate information with respect to the slowness of the meter and the period during which such meter would have malfunctioned.
3.1 Counsel submitted that in view of the provisions contained in section 26(6) of the Indian Electricity Act, 1910, it was the duty of the GEB to raise the dispute with respect to the correctness of the meter if it was not satisfied about the same. Such dispute had to be decided by the Electrical Inspector before any supplementary bill could be issued. In the present case, in total disregard of the statutory provisions, supplementary bill was issued without any adjudication on the question of slowness of the meter.
3.2 Counsel further submitted that the meter was checked and certified before installation. Slowness in recording consumption, therefore, had to be established with reference to the point of time when such meter would have started malfunctioning. In the present case, neither GEB nor the Electrical Inspector had estimated the period during which prior to 12.7.96, the meter would have developed such defect.
3.3 With respect to the degree of slowness in recording the consumption also, the counsel submitted that there were divergent readings on record. Each time the meter was checked, slowness varied. He, therefore, submitted that the Electrical Inspector grossly erred in adopting the figure of 39.84% of slow running of the meter. He pointed out that even while the officials of GEB had carried joint inspection on 16.7.96, the meter was found running slow in the range of 32.35% to 39.01%.
3.4 Counsel relied on a decision of the Apex Court in the case of Belwal Spinning Mills Ltd v.
Electricity Act, 1910 as amended from time to time came up for consideration. In the said decision, the Apex Court was pleased to hold that the words “during such time” used in section 26(6) of the said Act means the time during which the dispute is raised for reference and therefore, the estimate of supply of energy by the Inspector is to be made for a period not exceeding six months prior to the date of raising the dispute.
3.5 Counsel also relied on a decision of the Apex Court in the case of Bombay Electricity Suppply & Transport Undertaking v. Laffans (India) (P) Ltd., (2005) 4 SCC 327 wherein it was held that the dispute as to correctness of meter under section 26(6) of the Electricity Act, 1910 can be raised by either party for decision by the Electrical Inspector, but where no such dispute is referred, reading recorded by the meter binds the parties.
4. On the other hand, learned Senior Counsel Shri S.B.Vakil appearing for the Electricity Company with Ms.Bhaya opposed the petition contending that the Electrical Inspector as well as the Appellate Authority have correctly decided the issues. It was submitted that from the outset, the electric meter supplied by L & T Company was defective. There was sufficient material to establish such fact. The Electrical Inspector recorded that the meter was running slow by 39.84%. In terms of the provisions contained in section 26(6) of the Electricity Act, his decision to raise the bill for a period of six months at such percentage of error was perfectly legal.
4.1 Relying on the statutory provisions as well as the affidavit in reply filed, counsel submitted that revised supplementary bills issued by the Electricity Company in terms of the decision of the Electrical Inspector, therefore, called for no interference.
5. Having thus heard the learned counsel for the parties and having perused the documents on record, what emerges is that while sanctioning high tension electric connection in favour of the petitioner company, meter was installed on 7.7.95. Such meter was certified by the manufacturer as accurate. Subsequently, however on inspection held on 12.7.96, it was found that the meter was running slow. On such day, it was recorded to be running slow by 40.54%. On 16.7.96, GEB Officials took three readings of the meter and found that the meter was running slow in the range of 32.35% to 39.01%.
Supplementary bill was issued by the Electricity Company for the entire period of consumption from the date of installation till detection considering the error of 40.54%.
6. Upon a dispute raised by the consumer, the Electricity Inspector carried out his own inspection and recorded slow running of meter by 39.84%. In the order which the Electrical Inspector passed, he held that the meter was manufactured and supplied by L & T Ltd. It was certified to be accurate by such supplier. As per the existing rules and regulations of the Electricity Company, such meter was required to be tested in its laboratory and only thereafter the meter was to be installed at the site of the consumer. Even after such installation, the officials had to test its accuracy. Electrical Inspector held that in the present case, these procedures were not carried out. The meter was neither tested in the laboratory of the Electricity Board nor at the site of the consumer after installation. He, therefore, observed that had such tests been carried out, certification of the manufacturer about the accuracy of the meter could have been tested and the dispute could have been avoided. He further observed that the GEB officials erred in concluding that the meter was running slow by 40.56% due to the manufacturing defect without opening or testing the meter. He also held that the certificate issued by the L & T Engineer on 3.12.96 that the meter was running slow from the time of its installation is not logical or legal and therefore, cannot be accepted. He categorically held that from the M.R.I. reading of the disputed meter and the electricity generation by the company through its diesel generating set, it is not possible to ascertain the period from which the meter might have started running slow. He, however, rejected the petitioner's contention that in any case such supplementary bill can cover a maximum period of three months and no more. Placing reliance on the statutory provisions of section 26(6) of the Electricity Act, he held that supplementary bill can cover a period of six months. He accordingly relied on his own findings of the slow running of the meter by 39.84% and permitted the GEB to raise supplementary bill for a period of six months.
7. I am of the opinion that on the very findings of the Electrical Inspector recorded in his order, demand for additional electricity consumption cannot be sustained.
8. Section 26(6) of the Electricity Act reads as under:
"26. (6) Where any difference or dispute arises as to whether any meter referred to in sub- section (1) is or is not correct, the matter shall be decided, upon the application of either party, by an Electrical Inspector, and where the meter has, in the opinion of such Inspector ceased to be correct, such Inspector shall estimate the amount of the energy supplied to the consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct, but save as aforesaid, the register of the meter shall, in the absence of fraud, be conclusive proof of such amount or quantity:
Provided that before either a licensee or a consumer applies to the Electrical Inspector under this sub-section, he shall give to the other party not less than seven days' notice of his intention so to do.”
Such provisions came to be considered by the Apex Court in the case of Belwal Spinning Mills Ltd. (supra). The Apex Court held that in view of the amended provisions of section 26(6), the duty of the Electrical Inspector is to ascertain the dispute with respect to the correctness of the meter if such dispute is raised by either parties. It was held that in any case, such dispute can only be for a period of six months anterior to the date the same is raised and for any period prior thereto recording by the meter would be final and conclusive and binding between the parties. It was held that the Electrical Inspector has a statutory duty to estimate the supply of energy for a limited period referred to in sub- section (6) of section 26, viz. during such time not exceeding six months. It was further observed that in a given case, it may so happen that the Electrical Inspector may come to the finding that the meter ceased to be correct from a particular date which is not upto six months earlier to the date of raising of dispute for a reference. In such a case, estimate to be prepared by the Electrical Inspector may not go upto six months prior to the date of raising the dispute for reference but such estimate will only cover the period prior to raising the dispute during which, according to the Electrical Inspector the meter had ceased to be correct. The Apex Court observed as under:
“39. The expression 'check meter' has no special significance or legal incidence for which there is a bar that check meter cannot be treated as an altered meter if the licensee intends to replace the defective meter by the check meter. It will be open to the Electrical Inspector to ascertain the correctness of the check meter along with the disputed meter when dispute is referred for adjudication by the Electrical Inspector and the licensee founds its case with reference to check meter. Prior to the amendment of Section 26(6) Electricity Act, the Electrical Inspector or the competent person specially appointed by the State Government in this behalf, had a statutory duty to first determine whether the meter in question was defective and thereafter to estimate the quantity of the electricity consumed during such time as the meter in the opinion of the Electrical Inspector or the competent person 'shall not have been correct'. After the amendment of sub-section (6) of Section 26, the Electrical Inspector is the only statutory authority to decide the dispute about the correctness of the meter, if such dispute is raised by either of the parties. If the Electrical Inspector on a reference comes to the finding that the meter has ceased to be correct, the said Inspector has a statutory duty to estimate the amount of energy supplied to the consumer or electrical energy contained in the supply during such time not exceeding six months as the meter shall not, in the opinion of such Inspector, have been correct.'
(Emphasis added)
40. From the legislative change effected in sub- section (6) of Section 26, it is evident that prior to the amendment of sub-section (6), upon a determination that the meter in question was defective, the Electrical Inspector or the competent person had a statutory duty to also estimate the amount of energy supplied for the entire period during which in the opinion of the said Inspector or the competent person, the installed meter 'shall not have been correct'. But after the amendment, on a finding that the meter in question has ceased to be correct, the Electrical Inspector has been relieved of the statutory duty to estimate the total quantity of energy supplied to the consumer for the entire period during which the meter in the opinion of the Inspector shall not have been correct. But the Inspector has the statutory duty to estimate the supply of energy for a limited period referred to under sub-section (6), namely, 'during such time not exceeding six months'.
41. The point of time with reference to which the electricity consumed by the consumer is to be estimated by the Electrical Inspector for such period 'not exceeding six months' has not been specifically indicated in sub-section (6) of Section 26. The expression 'during such time' appearing in sub-section (6) of Section 26 is capable of different construction, namely, period between
i) date of dispute and date of reference
ii) date of dispute and date of inspection
iii) date of reference and date of adjudication
iv) date of dispute and date of adjudication.
42. It does not require any imagination to hold that the dispute when raised either by the consumer or by the licensee and reference to Electrical Inspector is made, the Inspector is expected to consume some time for entering the reference of dispute, making inspection of the meter in question and after taking such technical test as may be necessary to finally adjudicate the dispute as to the correctness of the meter. Unless the adjudication as to the proper functioning of the meter is made, the question of estimating the supply of electricity for the statutory period during which such meter shall not have been correct, will not arise. In our view, taking into consideration the time lag inherent between raising of dispute and adjudication of such dispute, the expression 'during such time' in sub-section (6) of Section 26 only means the time during which the dispute is raised for reference and the dispute is finally adjudicated. Hence, the estimate of supply of energy by the Inspector is to be made for a period not exceeding six months prior to the date of raising the dispute for reference to the Electrical Inspector. The expression 'not exceeding six months' indicates that the Electrical Inspector even when comes to the finding that the meter in question has ceased to be correct, is not required in all cases to make estimate of consumption of electricity for a period upto six months prior to the raising of the dispute for reference to the Electrical Inspector. In a given case, it may so happen that the Electrical Inspector may come to the finding that the meter ceased to be correct from a particular date which is not upto six months earlier to the date of raising the dispute for reference. In such case, the estimate to be prepared by the Electrical Inspector may not go upto six months prior to the date of raising the dispute for reference but such estimate will only cover the period prior to raising the dispute during which, according to the Electrical Inspector, the meter had ceased to be correct.”
9. It can thus be seen that the duty of the Electrical Inspector was not only to judge the accuracy of the meter in recording consumption, but also to ascertain as to for which period upto a maximum of six months, the meter would have malfunctioned. This in nutshell was the scope of the inquiry in a dispute raised with respect to the correctness of the meter to be judged by the Electrical Inspector under section 26(6) of the Electricity Act. It may be possible to take a view that the Electricity Company disputing the correctness of the meter had to approach the Electrical Inspector by raising such dispute and could not have unilaterally raised supplementary bill which it did in the present case on 1.11.96. Such a view may get support from the decision of the Apex Court in the case of Bombay Electricity Supply & Transport Undertaking (supra). In the said decision, the Apex Court observed as under:
“13. For the period for which, according to the appellant, the meter was not correct, none of the parties has referred the dispute to the Electrical Inspector. The meter though it is alleged by the appellant to have remained not correct, readings have been regularly recorded, bills raised and also paid by the consumer- respondent No. 1. According to Section 26(6), the readings would bind the appellant and respondent No. 1 both. It has never been the case of the appellant at any stage that the meter was not correctly recording the consumption of electricity on account of being non-functional due to any fraud committed or device or trick adopted by the consumer-respondent No. 1 or that the body seal of the meter was found broken or tampered with. The respondent No. 1 was accepting and honouring the demands raised by the appellant and, therefore, respondent No. 1 cannot be expected to have raised a dispute and sought for a reference for determination by Electrical Inspector. The appellant could not have, therefore, revised the demand for such period based on average consumption during the previous year. There is yet another reason why the entitlement of the appellant to recover charges from the respondent No. 1 may have to be denied. According to the proviso appended to sub-section (4) of Section 26, the licensee cannot take off or remove any such meter as to which difference or dispute of the nature described in sub-section (6) has arisen until the matter has been determined by the Electrical Inspector. The purpose is to preserve the evidence. The dispute shall be expeditiously disposed of by the Electrical Inspector by applying scientific method of investigation to find out if the meter was incorrect and if so then what was the extent of error. In the present case, the meters said to be incorrect have been removed and replaced by the appellant. Admittedly, no dispute has been raised and referred to the Electrical Inspector. The most material evidence being the meter itself has been lost by the act of the appellant in removing the incorrect meter. The appellant cannot be permitted to take advantage of its own act and omission - the act of removing the meter and the omission to make a reference to the Electrical Inspector.”
However, in the present case, the consumer which approached the Electrical Inspector against the supplementary bill raised by the Electricity Board styled his petition as one raising dispute with respect to the correctness of the meter under section 26(6) of the Electricity Act. Such application at the instance of the petitioner-consumer was decided by the Electrical Inspector. For the purpose of the present petition, therefore, I am prepared to proceed on the basis that what the Electrical Inspector decided by the impugned order dated 6.2.97 was a reference under section 26(6) of the Electricity Act.
10. Reverting back to the question of correctness of conclusion of the Electrical Inspector, one finds that in his own order, the Electrical Inspector discarded the certificate issued by the Engineer of L & T Company, supplier of the meter that such meter was defective from the inception. He also recorded that GEB officials therefore erred in raising supplementary bill for the entire period of installation of the meter. He categorically held that in the present case, GEB authorities relied solely on the certificate issued by the manufacturer that the meter was accurate. The authorities did not follow the procedure established under the Rules of checking such meter in the laboratory before installation and at the site of the consumer after it was installed. More significantly, the Electrical Inspector concluded that it was not possible to ascertain during which period of time, the meter could have malfunctioned.
11. Inquiry under section 26(6) of the Electricity Act that the Electrical Inspector was required to carry out included two significant aspects. One is with respect to the degree of slowness of the meter if at all and second is the period not exceeding six months during which such meter might have malfunctioned. In the present case, there were differing results of the inspection by GEB officials themselves and also the Electrical Inspector regarding the degree of slowness of the meter which ranged from 32.35% to a maximum of 40.54%. More importantly, the Electrical Inspector did not ascertain the period anterior to 12.7.96 (when the slowness was detected) when such meter would have developed such defect. If the Electrical Inspector had discarded the certificate issued by the Engineer of the L & T Company that the meter was defective from the inception, it was his duty thereafter to ascertain, with whatever scientific data possible to collect, the period during which such meter might have malfunctioned. By his own account, in the present case, it was not possible to do so. I am of the view that the Electrical Inspector correctly did not place any reliance on the certificate of the Engineer of L & T. Firstly such certificate was unilaterally collected by the GEB officials from the supplier without any opportunity of rebuttal to the petitioner. Secondly, such certificate did not contain any basis for the conclusion that the meter was defective from the inception. If the meter was actually defective from the beginning, one fails to understand why and on what basis the manufacturer- supplier certified that the meter was accurate. There was no explanation by the manufacturer for this discrepancy. As noted, the GEB officials failed to carry out the statutory tests of such meter on their own.
12. Sum total of the above observations is that, in my opinion, the Electrical Inspector gravely erred in permitting the GEB officials to raise supplementary bill for a period of six months on the basis of his finding of slow running of the meter. Even if one fully accepts his conclusion that the meter was running slow by 39.84%, the period during which immediately prior to 12.7.96 such defect would have developed has never come on record. The Electrical Inspector himself concluded that it was not possible to ascertain the period. Section 26(6) of the Electricity Act required the Electrical Inspector to judge not only the degree of slowness, but also the period not exceeding six months when such recording would have prevailed. The consumer cannot be saddled with additional charges without concrete material on record particularly when the Electrical Inspector held that the accuracy of the meter was not checked by GEB before installation though required under the rules.
13. In the result, the petition is allowed. The impugned orders passed by the Electrical Inspector as upheld by the Appellate Authority are quashed and set aside. Resultantly, the supplementary bills issued by GEB are set aside. Whatever amount that the petitioner might have deposited with the Electricity Company shall be given credit for the future bills, if the petitioner still continues to consume electricity. If not, the same shall be refunded with simple interest at the rate of 8% from the date of deposit till return. Rule is made absolute accordingly.
(Akil Kureshi J.) (vjn)