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Corporation of the City of Nagpur Vs. the Nagpur Electric Light and Power Company Ltd. - Court Judgment

LegalCrystal Citation
SubjectElectricity
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Appln. No. 216 of 1958
Judge
Reported inAIR1958Bom498; (1958)60BOMLR1446; ILR1959Bom592
ActsIndian Electricity Act, 1910 - Sections 24(1) and 52; General Clauses Act, 1897 - Sections 3(39); Constitution of India - Article 226; City of Nagpur Corporation Act - Sections 420(2); Companies Act - Sections 163(1)
AppellantCorporation of the City of Nagpur
RespondentThe Nagpur Electric Light and Power Company Ltd.
Appellant AdvocateN.L. Abhyankar and ;S.M. Hajarnavis, Advs.
Respondent AdvocateM.N. Phadke, ;D.B. Padhye and ;M.W. Puranik, Advs.
Excerpt:
indian electricity act (ix of 1910), sections 24(1), schedule clause xii - general clauses act (x of 1897), section 3(42)--whether local authority a 'person' within section 24(1)--applicability of section 24(1) to local authority--charge due within section 24(1), what is--condition precedent before action taken under section 24(1)--applicability of clause xii of schedule--whether action can be taken under section 24(1) where there is bona fide dispute between parties as to what is payable by consumer to electrical undertaking--notice under section 24(1) whether ineffective where amount stated therein in excess of what is legally due--demand in notice that security to be furnished before reconnection obtained whether can be made--writ of mandamus whether can issue to electrical.....mudholkar, j. 1, this is a petition under article 226 of the constitution for the issue of a writ of mandamus to the nagpur electric light and power company ltd., respondent in this petition, directing it to restore immediately the supply of electrical energy to the public lamps in the city of nagpur.2. the facts which are relevant and are admitted by the parties are briefly these: the respondent company holds a licence under which it used to generate electricity and supply it to the former municipal committee at nagpur and to the public at large. in march 1951, the respondent company shopped generating electricity because the khaperkheda power house which is managed by the state electricity board, started supplying electricity to the respondent company in that year. therefore, as from.....
Judgment:

Mudholkar, J.

1, This is a petition under Article 226 of the Constitution for the issue of a writ of mandamus to the Nagpur Electric Light and Power Company Ltd., respondent in this petition, directing it to restore immediately the supply of electrical energy to the public lamps in the City of Nagpur.

2. The facts which are relevant and are admitted by the parties are briefly these: The respondent Company holds a licence under which it used to generate electricity and supply it to the former Municipal Committee at Nagpur and to the public at large. In March 1951, the respondent Company shopped generating electricity because the Khaperkheda Power House which is managed by the State Electricity Board, started supplying electricity to the respondent Company in that year. Therefore, as from the year 1951 the respondent Company is only distributing electricity within the limits of the City of Nagpur.

3. The first agreement between the Nagpur Municipal Committee and the respondent concerning the supply of electricity by the Company to the Municipality is of the year 1915. It was followed by several other agreements., the fast of which expired on 31-12-1938. After the expiry of that agreement, it would appear that there was a disagreement between the parties as to the terms on which a fresh agreement should be entered into. The dispute was therefore, referred to Mr. W.R. Puranik. He gave his award in the year 1942. That award was retrospective and was in operation from 31-12-1938 to 31-12-1945.

Under that award, the Municipality was to pay Rs. 25/8/- per annum per pole to the respondent Company as charges for the supply of electrical energy and for maintenance of the public lamps. Inspite of the fact that this agreement expired on 31-12-1945, it was continued to be acted upon by the parties till 1-10-1950. From 1-10-1950 to 28-2-1931 Rs. 30/- per annum were paid, by agreement, in respect of each pole. This was apparently a provisional arrangement between the parties between whom negotiations for entering into a fresh agreement were going on at that time.

4. According to the petitioner an agreement was ultimately reached in April ]951 and a draft of the agreement was agreed to between the parties. According to it, the respondent communicated acceptance of the draft by its letter dated 29-5-1951, and subsequently also by a letter dated 11-6-1952.

5. Under a rule framed under Section 420 (2) of the City of Nagpur Corporation Act, the agreement had to be referred to the Electrical Adviser to the Government for his approval and it was accordingly referred to him and his approval was received on 30-11-1954. Thereafter, the petitioner wrote a letter to the respondent on 13-12-1954 requesting the latter to execute an agreement which had already been engrossed on a stamp paper. The petitioner's contention is that the respondent changed its mind and intimated that there was change in the circumstances and that the matter should be discussed afresh. Various reminders were sent in this connection by the petitioner to the respondent but despite those reminders the respondent refused to execute the agreement.

6. The petitioner states that by the letter dated 4-7-1955, the respondent was informed by it that there was a 'huge difference' between the consumption set out in the bills for public lamps submitted by the respondent and the consumption which was actually recorded in the meters. The petitioner therefore requested the respondent to make necessary corrections in its bills. The respondent however refused to do so upon the ground that meter readings were not to be taken into account and that the bills were prepared on a different basis. According to the petitioner, the respondent had installed meters for recording energy consumed by public lamps, that every month meter readings are taken jointly by the petitioner and the respondent and that it was on the basis of these readings that the respondent recovered from the petitioner Electricity Duty for payment to the Government. In view of this it appears to be the case of the petitioner that the true basis for the preparation of the bills should be the consumption of energy as recorded in the meters. Upon this view, the petitioner again addressed a letter to the respondent on 6-10-1955. To this letter the respondent replied on 20-12-1955 alleging that the petitioner had agreed to the computation of the consumption on the basis of wattage and that therefore there was no question of making any corrections in the bills.

7. The petitioner's contention is that the respondent having failed to correct its bills or to charge for the supply of energy on the basis of the actual meter readings, it was entitled to withhold further payment. It was for this reason that, according to the petitioner, only token payments were made till 18-10-1957 and that thereafter by virtue of a resolution passed by the petitioner on 28-10-1957 further payments were stopped. The resolution, we may mention, also provided for taking steps to refer all points in dispute between the petitioner and the respondent to an arbitrator to be appointed by the State Government under Section 52 of the Indian Electricity Act.

8. On 26-11-1957, the petitioner passed another resolution to the effect that no further payments in respect of 'excessive claims' of the respondent in its bills for the energy supplied to the public lamps should be made until the excess payment already made is adjusted.

9. On 27-11-1957, the petitioner addressed a letter to the State Government of Bombay enclosing a copy of the resolution dated 28-10-1957 and requesting the Government to take action on the various points set out in the resolution including the appointment of an arbitrator. The Government, however, did not appoint an arbitrator but sent a reply on 28-12-1957 which, in so far as it relates to this matter, is to the following effect:

'It is understood that the dispute regarding street lights is being settled amicably between the Corporation and the supply Company.'

The petitioner denies that any offer was made by the respondent for the settlement of the dispute amicably. It is suggested by the petitioner that the Government must have ascertained from the respondent its attitude to the appointment of an arbitrator and that the respondent must have intimated to the Government that the matter would be settled amicably between the petitioner and the respondent.

10. According to the petitioner since the respondent had not offered to settle the dispute amicably, it was the duty of the respondent to move in the matter of having an arbitrator appointed, The petitioner states that but for the communication received by it from the Government it would have taken further steps to move the Government in the matter and have the dispute referred to an arbitrator under Clause XII of the Schedule of the Indian Electricity Act.

11. Subsequent to the passing of the resolution dated 26-11-1957, the matters in dispute between the parties came to a head. The respondent went on sending monthly bills to the petitioner and the petitioner did not pay those bills. The last bill which was submitted was on 9-6-1958. That bill was for Rs. 3,28,000 and odd. At the top of that bill it is stated that the payment should be made within 30 days from the receipt of the bill. Before however the period stated in the bill expired, the respondent gave a notice to the petitioner under Section 24(1) of the Electricity Act intimating that the respondent had decided to discontinue the supply of energy to the public lamps on the ground that the Company's bill for street lighting totalling Rs. 3,28,536-2-6 till 31-5-1958 including interest had not been paid. This notice was given on 26-6-1958. Under this notice, payment was demanded within seven days of the receipt of the notice. The notice further stated that upon failure of the petitioner to pay the bill the respondent company would disconnect the supply of electrical energy to the public lamps as from 4-7-1958. The petitioner did not make any payments with the result that just after the mid-night of 3-7-1958 the respondent disconnected the supply of electricity to the public lamps in the City of Nagpur.

12. The respondent admits that it did cut off the supply of electricity to the public lamps as from 4-7-1958 and its contention is that it had power to disconnect the supply under Section 24(1) of the Act because the bill due from the petitioner remained unpaid despite notice. The respondent contested the petitioner's contentions that the computation of energy made by the respondent was not correct, and that the bill was exorbitant. According to the respondent, in the draft agreement an option was given to it to compute energy either on the basis of meter readings or on the basis of wattage of street lamps and the total number of hours of their burning. Further according to the respondent, the petitioner had actually accepted this option and bad been making payments right upto October, 1957 on the aforesaid basis. The respondent's contention is that the action of the petitioner in refusing to pay the bill is wholly mala fide and is actuated by ulterior motives. It is suggested that the petitioner wants the licence in favour of the respondent to be cancelled and to be granted to the petitioner and that in order to create public opinion in its favour the petitioner is resorting to these tactics. The respondent further contends that even assuming that it could not take any action under Section 24(1) of the Act this is not a case where a writ of mandamus should issue. Shri Phadke who appears for the respondent gave various reasons for saying that a writ of mandamus should not issue in this case. We shall deal with them at the proper place.

13. The first question which we have to consider is whether under Section 24(1) of the Act it was Open to the respondent company to serve a notice of the kind which was served here. Shri Abhyankar, who appears for the petitioner, says in the first place, that a local authority such as the Corporation of the City of Nagpur is not a 'person' within the meaning of Section 24(1) of the Electricity Act and that therefore the respondent company had no power to issue a notice to it under that section. It will be useful to reproduce the provisions of Section 24(1) here. They are :

'Where any person neglects to pay any charge for energy or any sum other than a charge for energy, due from him to a licensee in respect of the supply of energy to him, the licensee may, after giving not less than seven clear days' notice in writing to such person and without prejudice to his right to recover such charge or other sum by suit, cut off the supply and for that purpose cut or disconnect any electric supply-line or other works, being the property of the licensee, through which energy may be supplied, and may discontinue the supply until such charge or other sum, together with any expenses incurred by him in cutting off and reconnecting the supply, are paid, but no longer.'

The word 'person' is defined thus in Section 3(39) of the General Clauses Act:

' 'person' shall include any company or association or body of individuals whether incorporated Or not :'

This definition has been interpreted in Pallonjee Eduljee and Sons v. Lonavala Municipality AIR 1937 Bom 417 . There a Division Bench of this Court has held that the definition of the word 'person' in Section 3(39) General Clauses Act, includes a Municipality, which is a body of persons incorporated. The learned Judges have pointed out that the expression 'person under the General Clauses Act, Section 3(39), includes 'any company or association or body of individuals, whether incorporated or not, and that since a municipality is a body of persons incorporated it must be deemed to be included in the term 'person'. In the Electricity Act there are some special provisions regarding local authorities and it is therefore contended that in the circumstances the definition, given in the General Clauses Act, as interpreted by this Court, cannot be brought in aid. It is true that a reference is made to local authorities as such in certain provisions of the Electricity Act but it does not appear to us that by doing so the Legislature intended to give a restricted meaning to the word 'person' as used in Section 24(1) of the Electricity Act. If one were to accept the interpretation sought to be placed by Shri Abhyankar the position would be that sin electrical undertaking will not be entitled in any circumstances to resort to the provisions of the section as. against a local authority. It would seem that the Electricity Act, 1910 is based upon the English Electricity Act of 1882. There Section 21 makes a cleat provision to the effect that the provisions thereof which are more or less the same as those of Section 24(1) hero would apply even to local authorities. We do not think that the Legislature intended to treat the local bodies in India in a more favourable way than was done in England, It is true that the Legislature has not copied the language used in the English Statute and has contended itself by using only the word 'person' in Section 24(1). But that evidently was in view of the definition of this word, in Section 3(39) of the General Clauses Act which is wide enough to include a local authority. We cannot, therefore, accept Shri Abhyankar's argument that Section 24(1) was not intended to apply to local bodies or authorities.

14. Shri Abhyankar then contended that before this provision could be availed of the electrical undertaking had to establish that some charges for the energy must be due from the licensee and that here there being no agreement between the parties as to the mode of computation of electrical energy it cannot be said that any charge was due from the petitioner. According to him, a charge cannot be said to be due within the meaning of the expression in section 24(1) of the Act unless there is an agreement by reference to which a charge can be said to be due and the charge is correctly calculated. Shri Abhyankar admits that the word 'charge' has not been defined anywhere in the Act, but according to him it means the price to be charged by the licensee and to be paid to him for the energy supplied. This he gets from Clause XII of the Schedule to the Electricity Act which is in the following terms:

'The price to be charged by the licensee and to be paid to him for energy supplied to the public lamps, and the mode in which those charges are to be ascertained, shall be settled by agreement between the licensee and the State Government or the local authority, as the case may be, and, where any difference or dispute arises, the matter shall be determined by arbitration.'

15. Section 24(1) is a general section and the word 'charge' used there would apply not only to what is due from a local authority but also from a private consumer. Of course, here, we are concerned with a local authority and the point is as to what that authority is required to pay for the energy consumed to the distributor. For that purpose a reference to Clause XII is certainly necessary. According to this Clause, both the price to be charged and the mode for ascertaining the charge have to be settled by an agreement between the licensee and the local authority. That being so, Shri Abhyankar is quite right in saying that before anything can be said to be duo from the petitioner to the respondent, it must be established that the aforesaid two matters which are referred to in Clause XII had been settled by an agreement between the parties.

16. Now, on the question as to whether there is an agreement between the parties as to these two matters there is no legal document. No doubt, we have on record a draft agreement prepared in the year 1951 which subsequently received the approval of the Electrical Adviser to Government but that draft was not signed by either the petitioner or the respondent. Now, this draft was accepted by the petitioner and was actually forwarded by it to the respondent in the year 1954 after the Electrical Adviser had approved of the proposed agreement, It would however appear from the memo dated 14-12-1954 sent by the Chairman and Managing Director of the respondent Company to the petitioner that the respondent was not prepared to sign the agreement. That letter is to the following effect:

'With reference to the City Engineer's letter No. 1374/EII of the 10th instant, we have to state that in the light of the recent developments it would be in the interest of all concerned if a meeting is convened suitable to the undersigned and yourself to discuss the matter threadbare.' The letter of the City Engineer to which reference was made by the respondent's Managing Director is to the following effect:

'As regards the last para of your letter under reference, I have to state that an agreement has already been reached in respect of the street lighting but the formalities may not have yet been observed. I have also sent you a copy of the agreement which has been approved by the Electrical Adviser to Government, Madhya Pradesh under this office letter No. 218/L, dated 30-11-54. One such copy was personally delivered by my Lighting Superintendent to the Manager of your Company at the informal meeting which was held in your office on 5-10-1954.

I will, therefore, request you to make the necessary arrangements for completing the formalities of a proper agreement, at an early date.'

17. From the letter of the Managing Director of the respondent Company it would, according to Shri Abhyankar, be legitimate to conclude that the respondent Company did not want to complete the agreement. However, the stand taken before us by Shri Phadke on behalf of the respondent is that there was a concluded agreement between the parties. The stand taken by the petitioner throughout in its correspondence with the respondent Company was that an agreement had been reached as would be clear from the last letter of the City Engineer. But here the position taken by counsel is the reverse of that taken in the correspondence. Shri Abhyankar says, in the first place, that there was no agreement whereas Shri Phadke says that there was an agreement. We do not think that in a case of this kind it would be right for us to give a finding as to whether there was actually an agreement between the parties or not. In a case of this type the matter has to be decided by an arbitrator as provided for in Clause XII of the Schedule.

18. Shri Abhyankar, however, argues in the alternative, that even assuming that the draft agreement represented a concluded contract between the parties it does not permit the respondent to commits the consumption of energy upon the basis adopted by it. In this connection he draws our attention to the following clause in the draft. That is a proviso to Clause 3 (B) and runs thus:

'Provided that the energy supplied to the street lamps shall be metered by meter or meters, or it may be computed on the wattage of street lamps, number of hours of their burning and the number of lamps in use.'

Shri Abhyankar also brings to our notice the fact that in the minutes of the meeting dated 12-4-1951 it was recorded:

'The consumption of energy may be measured either on the meter system or on the calculation based on the fixed wattage and fixed number of burning hours'

arid that the word 'may' was altered upon the insistence of the petitioner to 'shall'. Shri Abhyankar also refers us to the letter dated 23-4-1951 which was addressed by the respondent Company to the Administrator, Municipal Corporation, Nagpur. In that letter, among other things, it is stated:

'The consumption will be computed on the fixed wattage and fixed number of burning hours viz. 4015 hours per annum and will not be meter-ed.'

To this letter, a reply was sent by the Administrator on 21-5-1951, in which, among other things, it is stated:

'The energy consumed for the street light lamps of all the wattage will be measured either on the meter system or on the basis of fixed wattage and fixed number of burning hours as mentioned in para No. 3 of the proceedings of the meeting dated 12-4-1951 and the street, lights will burn whole of night,'

In the light of this letter, the draft was changed and the word 'shall' was introduced therein instead of 'may'. After the draft agreement was submitted to the respondent Company the latter replied en 29-3-1951 to the following effect :

'We have to acknowledge receipt of your letter No. 240P of the 21st instant and confirm the street lighting rate agreement mentioned in your letter under reference. We shall send you a draft agreement embodying these terms and conditions for a period of 7 years, in due course.'

In pursuance of this letter, the respondent Company sent the draft agreement to the petitioner. That draft contains .1 number of alterations or corrections but the proviso to Clause 3 is the same as that in the draft agreement engrossed on a stamp paper, which was sent to the Electrical Adviser to Government; that is to say, it contains the words 'shall be metered by meter' instead of the words 'may be metered by meter'.

19. The question then is whether the word 'shall' indicates that there was no option with the Company in the matter of computing the consumption of energy and that it was bound to make computation on the basis of the readings recorded in the meters. Shri Phadke says that the word 'shall' is followed by the word 'may' and that the proviso taken as a whole would seem to suggest that there was an option either to make computation on the basis of the meter readings or on the basis of wattage and that such option mast necessarily remain with the respondent Company. Shri Abhyankar says that there was really no option at all so far as the Company is concerned and that option if any was with the petitioner. That again is a matter of interpretation of the agreement and we think that it properly lies within the jurisdiction of the arbitrator to be appointed under Clause XII of the Schedule. It would not therefore be right for us to express any opinion on the point as to whether the interpretation placed by Shri Abhyankar is correct or that placed by Shri Phadke is correct.

20. At the same time we agree with Shri Abhyankar that before any action can be taken under Section 24(1) of the Electricity Act it must be found that charges are due from the consumer against whom action is sought to be taken under Section 24(1). Under Clause XII, where there is a dispute or a difference between the parties as to whether the charges claimed by the electrical undertaking are in fact due or not, the matter must go to the arbitrator. Shri Phadke however refers us to a decision of a Division Bench of the Lahore High Court in Panipat Electric Supply Co. Ltd. v. Panipat Municipality AIR 1944 Lah 441, in which it was held that Clause 12 of the Schedule has no application whatsoever to a dispute arising as to what is due for any particular year under an agreement between the parties. In that case, there was, thus, an agreement between the parties and what the learned Judges had to consider was whether the dispute as to computation which arose between the parties could be determined by a civil Court or not. According to the learned Judges it could be so determined and that Clause 32 did not apply to a case of that kind. The learned Judges do not appear to have taken into account two important expressions which occur in Clause 12. They are 'energy supplied' and 'dispute arises'. Now the words 'energy supplied' would clearly show that the clause would apply even after an agreement had been arrived at between the parties regarding the supply of energy. Similarly the words 'dispute arises' used in the Clause clearly indicate the state of affairs after an agreement has been arrived at between the parties, We cannot conceive of a 'dispute' arising between the parties prior to an agreement though a 'difference' may arise even prior to an agreement. In the circumstances, therefore, we hold that Clause XII would apply also to a case where there is a dispute between the parties regarding the charges payable by that party or due from a local authority under an agreement, Where, as here, the charges are claimed from a local authority and there is a dispute between the local authority and the electrical undertaking as to the amount of charges the matter must under Clause XII be first determined by an arbitrator. That would be so even though there may be no agreement between the parties about rate of charge and mode of computation of charges. It is only after an arbitrator gives his award and determines what the charges due are that it would be open to the electrical undertaking to avail itself of the provisions of Section 24(1) of the Act. Till this is done, the electrical undertaking cannot have resort to that section. In the instant case, there is, as already stated, a dispute between the parties as to the amount due in respect of electrical energy consumed by the petitioner. Therefore, before resorting to Section 24(1) of the Act, it was necessary for the respondent Company to have that dispute settled by an arbitrator as contemplated in Clause XII.

21. Further, on the basis of the argument advanced before us by Shri Phadke on behalf of the respondent Company a dispute of this kind must, under Clause 13 of the 'concluded contract' (the terms of which are embodied in the draft agreement engrossed on a stamp paper) go to an arbitrator. No doubt, Section 24(1) confers certain statutory powers upon the respondent Company but by agreeing under clause 13 of the draft agreement to refer the dispute to an arbitrator the respondent must be deemed to have circumscribed its rights under Section 24(1) by attaching a condition precedent to their exercise. So, looking the matter either way, we think that it was not open to the respondent to exercise its powers under Section 24(1) of the Act at the present stage of the dispute between it and the petitioner.

22. Shri Abhyankar then stated that apart from this, the powers under Section 24(1) of the Act could be availed of by an electrical undertaking only where there is a neglect to pay the dues and not where there is merely a failure to pay what is demanded. In support of his proposition Shri Abhyankar relied upon certain decisions. The first of these decisions is In re, London and Paris Banking Corporation (1875) 19 Eq 444 . That was a case under the Companies Act. There also the expression 'negligence to pay' had to be considered. Jessel M.R. who delivered the judgment of the Court observed:

'Negligence is a term which is well known to the law. Negligence in paying a debt on demand, as I understand it, is omitting to pay without reasonable excuse. Mere omission by itself does not amount to negligence. Therefore I should hold, upon the words of the statute, that where a debt is bona fide disputed by the debtor, and the debtor alleges, for example, that the demand for goods sold and delivered is excessive and says that he, the debtor, is willing to pay such sum as he is either advised by competent valuers to pay, or as he himself considers a fair sum for the goods, then in that case he has not neglected to pay, and is not within the wording of the statute.'

23. Next he referred to the decision of the Assam High Court in' British India Banking Corporation Ltd. v. Sylhet Commercial Bank, Ltd. AIR 1949 Assam 45 , which was a case under the Companies Act. There Lodge C. J., relying upon a decision of this Court in Tulsidas Lallubhai v. Bharat Khand Cotton Mill Co. Ltd. : AIR1914Bom251 , held that when a debtor company believed even wrongly that it is justified in law to refuse to pay such a refusal cannot be regarded as neglect to pay as contemplated by Section 163(1) of the Companies Act. In : AIR1914Bom251 , a Division Bench of this Court held that the principle upon which a Company can be wound up on a creditor's application is simply its inability to pay its just debts that the inability is indicated by its neglect to pay after proper demand was made and that such neglect must be judged by reference to the facts of each particular case. The learned Judges also held that where the defence is that the debt is disputed, the Court has first to see whether that dispute is on the face of it genuine or merely a cloak of the Company's real inability to pay just debts.

24. The last case relied upon is Joseph v. East Ham Corporation (1936) 1 KB 367 . In that case also it was held that in a bona fide dispute between a consumer and a local authority, running an electrical undertaking, to what was payable by the former to the latter, the latter was not justified in cutting off the consumer's supply of electricity.

25. Now, from all these decisions it is clear that if there is a bona fide dispute between the parties as to what was payable action under Section 24(1) cannot be taken by an electrical undertaking. It is urged by Shri Phadke that here the dispute is not bona fide at all and that it is for some ulterior reasons the petitioner has not paid its dues to the respondent Company. Shri Phadke referred us to a resolution passed by the petitioner sometime towards the end of the year 1957 in which, among other things, the petitioner wanted that the licence in favour of the respondent should not be renewed and that if it was already renewed it ought to be cancelled and that the licence should be granted to the petitioner. Shri Phadke says that the petitioner after having been informed by the Government that licence in favour of the respondent had been renewed wanted to create public opinion in its favour by taking up a stand like this and also wanted to create prejudice against the respondent Company and has therefore adopted this curious stand. In our opinion, it would not be right to draw an inference of this kind from the mere passing of a resolution to the effect that the licence in favour of the respondent should not be renewed. It has to he borne in mind that the petitioner has been protesting right from the year 1955 against the method of computing electrical energy and it would not be correct to say that altogether a new dispute was raised by the petitioner after it learned that the licence in favour of the respondent had been renewed. In this connection we may refer first to the letter of 4-7-1955 addressed by the Lighting Superintendent, Nagpur Corporation, to the Manager, N. E. L. and Power Co. There he has stated:

'This is to bring to your notice that there is huge difference between the consumption charged in the street lights bills by the Company and the consumption recorded on the meters of street lights.

You are, therefore, requested kindly to make necessarily corrections in the bills and submit your amended bills .....'

Shri Phadke says that this is not a letter written by anyone who could act on behalf of the petitioner and that it cannot be regarded as a protest by the petitioner. It is sufficient to say that the person who addressed that letter is the head of the Lighting Department and therefore it, was competent for him to make a protest of this kind. Moreover, unless the contrary is shown, it must be presumed that he was acting under the directions of the Chief Executive Officer to whom he is subordinate. In fact, notice of this letter was taken by the respondent Company which sent a reply on 6th/7th July 1955. No doubt in that letter the Manager of the respondent Company has reiterated the stand that computation should be made on proper basis; but that is another matter. Then there is a second protest which is in the letter dated 6-10-1955, addressed again by the Lighting Superintendent, Nagpur Corporation, to the Manager of the respondent Company. This was evidently a reply to the manager's letter dated 6th/7th July 1955. There the Lighting Superintendent has stated:

'With reference to the above cited memo, I have to state that the N. E. L. and Power Co-Ltd. Nagpur, has already agreed the measuring of electric energy consumption on the meter system, vide this office letter No. 240P, dated 21-5-1951, and there is a term under Clause 3 (b) of our draft agreement that the energy supplied to the street lights shall be metered by the meter or meters, which has already been approved by you and to this effect the Company has fixed the meters to measure the electric energy consumption of the street lights. Moreover, I have to point out that officials of the Company have given the understanding about the measurement of the electric energy of street light whenever the question of low voltage and improper illumination of street lights was brought to the notice of officials of the N. E. L. and Power Co.'

Notice was taken of this letter also by the Manager of the respondent Company who in his letter dated 20th/21st December 1955 has stated as follows:

'The draft agreement you refer to provides either for metering or for computation on the basis of wattage, burning hours, etc. It is wrong to say that we agreed at any time to measure the electric energy consumption on the metering system and to bill you on the basis of it.....

...... We do not therefore propose to change the practice in force so far, inasmuch as it has not been suggested by the Chief Executive Officer of the Corporation ......'

26. Now, Shri Phadke relying upon the last portion quoted from this letter points out that no letter was sent by the Chief Executive Officer of the Corporation after this and urges that we should hold that there is nothing to show that the 'petitioner' had lodged a protest. As we have already stated, a protest was made by a person who was competent to act on behalf of the petitioner and it is immaterial that the Chief Executive Officer did not send a letter under his own signature conveying a protest in it.

27. We would next refer to the letter dated 12-11-1955 which was addressed by the Lighting Superintendent to the Manager of the Company in which he has stated as follows:

'In connection with the bill under reference I have to state that you have charged 1,12,715 units consumption when the actual consumption metered comes to 1,07,084 units and hence token payment of Rs. 19,750/- has been recommended against Rs. 36,273/8/8 which include the arrears of Rs. 15,650/3/8 not paid due to difference between the consumption charged by you.'

It would be clear from this letter that the petitioner carried its protest a little further this time and actually withheld part of the amount on the ground that the computation of energy made by, the respondent was not correct.

28. Finally we would refer to tie letter dated 23-1-1956 sent by the City Engineer, Nagpur Corporation, to the Manager of the Respondent Company. In that letter the City Engineer has observed as follows:

'In connection with the bill under reference I have to state that you have charged 1,14,513 units consumption when the actual consumption metered comes to 1,06,754 units and hence token payment of Rs. 19,600/- has been recommended against Rs. 37,210/15/10 which includes the arrears of Rs. 16,523/8/8 not paid due to difference between the consumption charged by you.'

Shri Phadke is not in a position to say whether these letters were actually received by the respondent Company. However, Shri Abhyankar states that from a perusal of the Dak Book it is clear that these letters were received by someone on behalf of the respondent Company. This Dak Book was shown by Shri Abhyankar to Shri Phadke and Shri Phadke, who also appears for the respondent, and they had no comments to make. In the circumstances we would be justified in concluding that both these letters were actually received by the respondent.

29. Shri Phadke however states that after this letter of 23-1-1956 there was no protest by the petitioner till 12-3-1958. It seems to us that there was no need for the petitioner to go on protesting any further. However, we find that there is a further protest in the letter dated 16-10-1957 addressed by Shri Deshraj, the then Mayor of the Corporation, to the Chairman and Managing Director of the respondent Company. Then again, there is a resolution of 28-10-1957, passed by the petitioner to the effect that steps be taken to refer all points of dispute to an arbitrator to be appointed by the Government. Though the resolution does not contain a protest it docs reiterate the fact that a dispute did exist between the respondent and the petitioner. In these circumstances it would not be correct to say that the petitioner took altogether a new stand in the year 1958 to the effect that there was a dispute between it and the respondent Company over the question of computation of electrical energy.

30. Then Shri Phadke says that even if the basis contended for by the petitioner be accepted the liability of the petitioner may at the most be reduced by 5 per cent, and since the petitioner at no time showed its willingness to pay the balance of the amount the dispute cannot be regarded as bona fide. Here, again we have to bear in mind that the disputes which the petitioner has with the respondent Company are numerous and again what the petitioner wants is adjustment of the payments made in the past, i.e., right from the year 1951. Whether the petitioner is entitled to this under law is a different matter. But the petitioner has made a claim of that kind and merely because such claim has been made recently it cannot be rejected as wanting in bona fides. We might as well mention here another argument of Shri Phadke and that is that even if we accept the letter of the Lighting Superintendent as being a protest by the petitioner itself there was no protest whatsoever from or on behalf of the petitioner till 1955. To that the answer of Shri Abhyankar is that whatever payments were made in between were made without prejudice to the ultimate agreement that may be entered into between the parties. Actually no agreement had been signed and the draft agreement was itself awaiting the sanction of the Electrical Adviser. That being the position, the petitioner went on making payments towards the dues without any protest to the respondent because it did not want to take the risk of any precipitate action being taken by the respondent in the matter such as cutting off of the electrical supply altogether. Now, the explanation of Shri Abhyankar is not a far-fetched one and we are not prepared to reject it. In these circumstances, we think that there is, in fact, a bona fide dispute between the parties and that the failure of the petitioner to pay (he dues does not amount to a neglect to pay within the meaning of the expression occurring in subsection (1) of Section 24 of the Electricity Act.

31. Then Shri Abhyankar stated that the demand which was made by the respondent Company admittedly included certain amounts, which even on its own showing it could not claim. One such amount was the payment of interest amounting to Rs. 10,000/-. A demand for this amount was contained in a bill submitted in the month of March. We had asked Shri Phadke to show what the basis of this amount is and how this amount was arrived at. Shri Phadke stated that for the first time the bill for the month of January 1958 which was received by the petitioner on 21-2-1958 contained a demand to the effect that if the amount was not paid within 30 days of the presentation of the bill, the petitioner would be liable to pay interest at 1/-per cent., per month. By virtue of this demand, the petitioner would be liable to pay interest only from 21-3-1958 and yet we find that in the bill presented on 1-3-1958 there is a demand for Rs. 18,948/- by way of interest. Clearly therefore this amount could not be included.

32. Then there is another fact and that is that even assuming that there was a concluded contract between the parties that contract came into force on 1-3-1951 and came to an end on 28-2-1958. Therefore so far as the months, March, April and May 1958 are concerned, the computation of energy could not be made upon the basis contended for by the respondent, that is the draft agreement which had expired. Now, Shri Phadke says that there is a condition in the draft agreement that unless a party to the agreement gave one year's notice in writing before the agreement expired that agreement would continue to be in force and that the petitioner not having given such notice, the agreement must be still deemed to be subsisting. Now, here, we find that the respondent Company had itself given notice on 11-11-1957 to the effect that as and from 1-3-1958 a different tariff would apply. Then again on 28-2-1958, the Chairman and Managing Director of the respondent Company wrote a letter to the petitioner saying, among other things, that pending final agreement regarding the street lighting terms and tariffs the Company should continue the supply as it is doing at present from 1-3-1958 and the rates and conditions as may be agreed upon will come into force from 1-3-1958. From both these letters it would appear that the respondent itself did not want the renewal of the old agreement of 1951 in the form in which that agreement existed.

33. Then we would refer to the letter dated 3-4-1958 sent by the Manager of the respondent Company to the Chief. Executive Officer of the Corporation in answer to the letter of the Chief Executive Officer of 12-3-1958. In that latter the manager has observed:

'The question whether the Corporation is liable to pay for the consumption according to meter readings or computation is a matter of interpretation which has to be decided from the correspondence, that has taken place between the Company and the Corporation. This is the first time by your above letter that you have asked the Company to meter the consumption of energy ......

Now that you desire for the first time that the bills far street lights be made out according to meter readings and not according to computation, as we have been doing so far, we are writing to the Electric Inspector to Government, Nagpur Division Nagpur, requesting him to put up check meters on the existing meters installed by the Company as these meters have neither been calibrated nor chocked for a very long time in view of a practice of submitting hills from 1951 on the computed consumption based on wattage and the total number of burning hours.'

34. Now, in view of this letter it would follow that the old basis could not have been adopted in preparing bills for the months of March, April and May 1958. The amount of Rs. 3,28,000 and odd which is referred to in the notice under Section 24(1) includes bills for these three months. So under the notice the petitioner was required to pay something over and above what the petitioner was legally bound to pay and for the failure to pay that amount the penalty was the cutting off of the electrical supply. We are clear that the amount stated in the notice under Section 24(1), must be accurate and if it is in excess of what is legally due then the notice given under Section 24(1) would be ineffective. The powers conferred on an electrical undertaking by Section 24(1) arc very drastic and therefore we must expect strict compliance with the provisions of that section.

35. There is also another defect in the notice. In that notice the respondent wants that security should be furnished by the petitioner before it can obtain reconnection. Such a demand is not contemplated by Section 24(1) and could not properly be made in the notice. It may be that under the rules and regulations made by the respondent Company it has power to demand security but that is entirety a different matter. We may mention that Shri Abhyankar challenges the validity of the rule but we do not think that upon the view we take of the provisions of Section 24(1) it is necessary for us to consider whether the rule requiring payment of security made by the Company is a valid one.

36. There is one more defect in the notice under Section 24(1) and it is this. The last hill which was sent by the respondent to the petitioner was, as already stated, dated 9-6-1958. That bill was received by the petitioner on 11-6-1958. It is stated on the top of the bill that the petitioner was entitled to time for 30 days to pay the bills, that is to say, the petitioner could pay the hill on or before 10-7-1958. Since the petitioner had time to pay the bill till that date, that time could not be curtailed by the notice dated 2G-6-1958. The notice however purports to curtail that time by saying that the bill must be paid within seven days of 26-6-1958. Shri Phadke says that this period of 30 days given is one of grace and it was open to the respondent to curtail that period. Whether it is open to the respondent to do that or not need not be considered here because the respondent has not stated in the notice under Section 24(1) that the period of grace which was given by the respondent to the petitioner was curtailed by it.

37. We may mention that the four defects in the notice with which we have dealt were not raised by the petitioner in its petition and Shri Phadke contended that since they were not so raised, we are not entitled to consider them. Ordinarily, we do not allow parties to travel beyond what they have said in the petition or return, as the case may be, but where, as here, all the facts are clear on the record we think that a party can raise a contention which is based on facts which are already on record though that contention is not expressly set up in the petition or return. Moreover, we gave Shri Phadke full time to meet those points. Actually they were raised day before yesterday and he had almost two days time to answer them.

38. For all these reasons, we have no doubt that the notice under Section 24(1) of the Electricity Act which was served by the respondent on the petitioner was bad in law. Accordingly, we quash it and treat it as of no legal effect.

39. The question then is whether we should issue a writ of mandamus against the respondent requiring it to continue to supply electrical energy to the petitioner. The first ground taken by Shri Phadke for asking us to refuse a writ to the petitioner is that in the resolution of 26-11-1957, the only charge made against the respondent Company was that it was charging at an exorbitant rate of -/2/3 for the period 1946 to 1957 (which was also not an entirely correct statement); whereas the ground now taken is that the basis of computation of consumption of energy is wrong. It is true that the resolution does not bring out the points on which the petition is founded but it is not as if the ground taken in the petition is a new one. As already stated, this ground was urged long ago and in any case was never given up by the petitioner. Indeed, the letter addressed by the Chief Executive Officer on 12-3-1958 refers to this ground.

40. The second ground taken by Shri Phadke is that no protests were made from 1951-1955 and that therefore writ ought not to issue against the respondent. We have dealt with this matter earlier and shown that there was some reason for not making any protest till 1955. Therefore, it is also not a good ground for refusing a writ.

41. Then Shri Phadke contended that no attempt was made by the petitioner to pay up what was admittedly due to the respondent. Now, here, as we have already pointed out, the petitioner also has a counter-claim which it wants to be considered. That the petitioner has some kind of claim is, as already stated, admitted even by the Managing Director of the Respondent Company, in his letter dated 28-2-1958, which has been filed by the respondent to-day, In these circumstances, we do not think that it would be right to hold that there is an unreasonable with-holding of payment of money admittedly due by the petitioner.

42. Then Shri Phadke stated that the charge made by the petitioner that the respondent had fixed unauthorised lamps is false and that therefore we should not grant a writ. This is not a matter which we can go into ourselves. Whether the respondent acted in an unauthorised manner or under authority cannot be determined without going into evidence. In the circumstances, we cannot take that point into consideration at all.

43. Shri Phadke says that the petitioner wants that the bills should be reopened and that is also another ground for refusing a writ. The petitioner does want the bills to be reopened, but that is a matter for the arbitrator to consider, and can certainly not be a ground for refusing a writ. It may be that the arbitrator would not allow bills to be reopened after the lapse of several years but upon such a hypothetical ground we cannot say that the petitioner ought not to get the relief which it has sought from us.

44. Further according to Shri Phadke the action of the petitioner in not paying up the bills and in filing this petition is not bona fide because it has resorted to this course having failed to secure a licence in its own favour for distributing electrical energy in the City of Nagpur. We have dealt with this aspect of the case earlier and we have said that there is no basis for the conclusion that the petition has been filed because the petitioner has failed to get a license. In fact the petition is the direct consequence of the action taken by the Respondent by cutting off electricity from public lamps, and is not even remotely connected with the resolution aforementioned.

45. Shri Phadke then asked 'Is it reasonable to pay a large sum and ask for readjustment of bills paid years ago?' We have dealt with this aspect of the case earlier and said that there was some reason why the petitioner went on paying bills for 1951 and onwards as and when they were presented and the mere fact that it paid these bills would not justify the conclusion that it accepted as correct the basis on which those bills were made. Therefore, that is also not a good ground for refusing a writ. We may also add that, as Shri Phadke concedes, a relief of this kind could have been sought by any tax-payer, the sins of commission and omission, if any, of the Corporation cannot be valid ground for refusing a writ-- the harmful consequences of refusing which will fall, not on the petitioner so much as on the public of Nagpur.

46. Finally, Shri Phadke says that the respondent is not a public authority and that no writ can issue against it. He referred in this connection to the decision of the Supreme Court in Sohan Lal v. Union of India, (S) : [1957]1SCR738 , and 11 Halsbury's Laws of England Vol. II (Third Edition) page 85, para 159. In the Supreme Court case it is held that normally, a writ of mandamus does not issue to or an order in the nature of mandamus is not made against a private individual. Such an order is made against a person directing him to do some particular thing, specified in the order, which appertains to his office and is in the nature of a public duty. The statutory duty, devolving upon a public utility concern is a public duty. Therefore it cannot be said that a public utility concern like the respondent is in the same position as a private party.

47. As pointed out in 73 Corpus Juris Secundum 998-

'As a general rule, a public utility has the duty to give the public reasonable and adequate service at reasonable rates and without delay.

A public utility has the duty to supply a commodity or to furnish service to the public. This duty exists independently of statutes regulating the manner in which it shall do business or of ton tracts with municipalities or individuals, and is imposed because the utility is organized to do business affected a public interest and holds itself out to the public as being willing to serve all members thereof. Broadly speaking, the primary duty of a public utility is to give reasonable and adequate service at reasonable rates and without delay.'

Such being the position, a writ can issue at the instance of any consumer to a public utility concern for its failure to perform its duty under the Electricity Act or under its licence. Similarly, a writ can issue to it restraining it from abusing its powers under any of the provisions of the Act or under its licence.

48. Now, in II Halsbury's Laws of England, page 84, paragraph 159, it is stated:

'The order of mandamus is an order of a most extensive remedial nature, and is, in form, a command issuing from the High Court of Justice, directed to any person, corporation, or inferior tribunal, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duty.'

This statement of law instead of helping the respondent directly goes against it. As pointed out in Corpus Juris Secundum the duty to supply electrical energy resting upon an electrical undertaking is a public duty and therefore a writ can issue to it requiring it to perform that duty. We would also refer to the following at page 91 of the same volume:

'A mandamus will issue to an official of a society to compel him to carry out the terms of the statute by which the society is controlled.' This statement of the law goes even further than that in Corpus Juris Secundum. We have therefore no doubt that a writ can issue to the respondent Company.

49. Finally, we have to consider whether we should make the writ conditional. Now Shri Phadke says that in a case of this kind we should make the writ conditional and require the petitioner to pay the amount which would be due to the respondent upon the basis contended for by the petitioner. According to him, the petitioner would be. bound to pay to the respondent Rs. 2,76,000 on the basis or the pleadings of the petitioner and therefore the respondent asked us that the petitioner should be required to deposit this amount as a condition precedent to the issue of a writ against the respondent. We have already stated that the petitioner has also some claims against the respondent. Therefore, it would not be right for us to direct that the petitioner should make a payment of this amount to the respondent even though Shri Phadke suggests that the payment would be without prejudice to the right of the petitioner to have necessary adjustments made. In our opinion, it will be enough if the condition regarding security which we have already imposed upon the petitioner is continued so that the petitioner will not be in any way prejudiced. We may add that though some delay may be occasioned in the recovery of the amount due to the respondent, the respondent would be adequately compensated by the interest which, according to the respondent itself 'it is entitled to claim. We do not. however, say that the respondent is entitled to claim interest in law as the petitioner is disputing the right.

50. Accordingly, we order as follows: That a writ of mandamus absolute shall issue against the respondent requiring it to continue the supply of electrical energy to the petitioner for the purpose of public lights. The guarantee given by the Allahabad Bank in respect of the amount legally due from the petitioner to the respondent in respect of the energy consumed upto 31-5-1938 shall continue till the respondent is fully paid its due. The guarantee shall be renewed every three months. In case of breach of this Order either party will be at liberty to apply. As regards the payment for the consumption of energy and maintenance charges from 7-7-1958 the petitioner shall be liable to pay to the respondent Rs. 25,000/-per month for the energy consumed from 7-7-1958 onwards till the adjudication of their dispute by the arbitrator, without prejudice to their respective rights as to the correct amount to be paid or received. Till the dispute between the parties on the question of the rate of payment and mode of computation is settled the respondent will not be bound to carry out any further lighting programme.

51. The petitioner will be entitled to costs.

52. Petition allowed.


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