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Rajputana Cold Storage and Refrigeration Ltd., Jaipur Vs. Government of Rajasthan and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil;Constitution
CourtRajasthan High Court
Decided On
Case NumberCivil Writ Case No. 154 of 1957
Judge
Reported inAIR1959Raj275
ActsConstitution of India - Articles 19 and 226
AppellantRajputana Cold Storage and Refrigeration Ltd., Jaipur
RespondentGovernment of Rajasthan and anr.
Appellant Advocate Sadhan Gupta and; S.L. Mardia, Advs.
Respondent Advocate C.B. Bhargava, Deputy Govt. Adv.
Cases ReferredMohammad Yasin v. Town Area Committee Jalalabad
Excerpt:
.....september 1947, and that in case of disconnection, perishable articles like fruit, seed and potatoes would perish and the petitioner would suffer irreparable damage and injury. town area committee jalalabad, air 1952 sc 115 on which great reliance has been placed by the learned counsel for the petitioner in support of his contention is clearly distinguishable. it was held that there was a difference between a tax like the income-tax and a license fee for carrying on a business: no encroachment upon such rights should be permitted under the guise of some subterfuge, because an indirect encroachment is as bad as a direct encroachment. these principles are well established; here all that the respondents have done is to make a demand of thearrears due and when the petitioner failed to pay..........under some promise or condition of the order of sanction, the then jaipur government was bound to supply energy to the petitioner at concessional rates and that there was thus no right in the opposite party to make the demand on the basis of excess rates and disconnecting the supply for non-payment thereof.in the replication filed by the petitioner, it raised the plea for the first time that the act ofdisconnecting the petitioner's premises amounted to interfering with the fundamental right of the petitioner to carry on its trade or business. the learned counsel for the petitioner has focussed his arguments on this belated plea in support of the prayer for an appropriate writ.5. the claim in the petition rested on some supposed breach of contract between the parties for supply of.....
Judgment:

Sarjoo Prosad, C. J.

1. This application has been presented by the Rajputana Cold Storage and Refrigeration Ltd., which for the sake of brevity will be hereinaftercalled the petitioner Company. It prays for a writ of certiorari quashing a notice dated 6-9-1957, issued by the Executive Engineer, Electrical Department, Government of Rajasthan and also for a writ of mandamus against the respondents -- the Government of Rajasthan and the said Executive Engineer-- directing them not to realise the amount claimed in the notice and also commanding them to reconnect the premises of the petitioner for supply of electrical energy,

2. The petitioner company was registered in the year 1947 under the Indian Companies Act, 1913. It has been running its business of cold storage ever since, having its registered office located at Cold Storage Building, Jotwara, Jaipur. In the year in question, it appears that sanction was accorded to the Managing Agents of the Company, Messrs. Jath Brothers and Company, for starting the concern in the city of Jaipur on the terms and conditions embodied in the then Jaipur Government Order No. 1115/SC, dated 4-9-1947.

Meters were duly installed in the concern and the petitioners commenced their business. After the formation of the State of Rajasthan, the then Government of Jaipur merged into the State of Rajasthan. In September 1951, the Executive Engineer, Electrical Department, who is the second respondent in this application, issued a letter to the petitioner that the bills supplied to the petitioner for the consumption of electricity were not correctly recorded and that in the said bills, the petitioner had been charged for an abnormally low consumption, due to oversight in reading the meters.

The respondents claimed that the supply of the energy was to be calculated at the normal rate of three annas per unit and since the supply in the petitioner's premises was through current transformers, having a ratio of 100 : 5 amperes, the units shown in the meters had to be multiplied twenty times in order to give the correct reading. The bills sent to the petitioner from time to time were merely at the readings recorded in the meters without taking any notice of the ratio shown by the current transformers.

The Executive Engineer accordingly claimed that the petitioner had to be charged not only for19,053 units during the relevant period, but that he should be charged twenty times those units which were left uncharged and the amount claimed accordingly amounted to the tune of Rs. 67,876/5/-. The case of the petitioner is that there was no mistake of reading; that the consumptions were actually at concessional rates as embodied in Clause (c) of the conditions under which sanction to start the business was accorded by the then Jaipur Government; and that the meters were installed in the premises of the Company by the servants and agents of the opposite party who also presented the bills to the petitioner from time to time during the period of about 21/2 years in due course of business and received payment of the same regularly.

The petitioner therefore submitted that the opposite party was estopped from claiming anything by way of arrears, as suggested in their letter for a period of about three years, when payments had been already made against the bills submitted by the opposite party. The petitioner also alleges to have made a representation to the Government against the demand, when it was given an assurance that the matter would be considered by the Government but pending consideration, the petitioner should make payment, on the faith of which it made some payments, Eventually, on the 6th of September 1957, the opposite party (No. 2) issued notice threatening to disconnect the petitioner Company on its failure to pay the amount claimed, which by then had run up to about Rs. 84,000/-.

The said notice of demand and threat to disconnect electric installation is challenged as illegal and without jurisdiction. The ground taken in the petition firstly is that the said notice is in contravention of the rights and privileges which accrued to the petitioner by the order according sanction on the 4th of September 1947, and that in case of disconnection, perishable articles like fruit, seed and potatoes would perish and the petitioner would suffer irreparable damage and injury.

It was, therefore, prayed that in the circumstances, it was essential for the Court to protect the rights of the petitioner which entitled it to the supply of electric energy at concessional rate from the opposite party. It was further stated that the opposite party had been supplying electric energy to various factories at concessional rates and their attempt to meet out a different treatment to the petitioner was discriminatory and against Article 14 of the Constitution.

3. It would thus appear from the recitals in the body of the petition that the only case on which the petitioner founded its claim for a writ was that the action taken by the Government authorities was allegedly in violation of the terms embodied in the sanction accorded to the petitioner for starting the business in question, and that in demanding a higher rate for the supply of electrical energy and not at concessional rate claimed by the petitioner, the Government had done something discriminatory and) infringed Article 14 of the Constitution.

How the case was presented in the bodv of the petition itself is important in view of the complexion which has been given to it during the course of arguments. Subsequently it appears that on 22-12-1957 while the application was pending, the opposite party disconnected the premises of the petitioner. The. petitioner then sought permission and was allowed to amend the original application. This time it raised the plea that the action of the opposite party in disconnecting the premises of the petitioner was against law and the rules and regulations for the supply of electrical energy published under notification dated 17-4-1956.

The petitioner contended that the provisions of the Indian Electricity Act, 1910 and the rules made thereunder had been infringed by the opposite party and the disconnection of the petitioner's premises was therefore illegal and arbitrary. It is not necessary to refer to the various sections of the Electricity Act which are said to have been contravened by the opposite party either in making a demand of arrears or in disconnecting the petitioner's premises; because in the course of arguments before us, this aspect of the case was completely abandoned and it was conceded that the Electricity Act had no application. It was also alleged in the amended petition that the act of the opposite party was against the principles of natural justice and it was prayed that a writ of certiorari might be issued quashing the notice of demand and a writ of mandamus directing the respondent to withdraw the said notice and reconnect the premises of the petitioner.

4. The grounds on which the writ application was founded either originally or even after its amendment have been given up by the petitoner, except for the plea that under some promise or condition of the order of sanction, the then Jaipur Government was bound to supply energy to the petitioner at concessional rates and that there was thus no right in the opposite party to make the demand on the basis of excess rates and disconnecting the supply for non-payment thereof.

In the replication filed by the petitioner, it raised the plea for the first time that the act ofdisconnecting the petitioner's premises amounted to interfering with the fundamental right of the petitioner to carry on its trade or business. The learned counsel for the petitioner has focussed his arguments on this belated plea in support of the prayer for an appropriate writ.

5. The claim in the petition rested on some supposed breach of contract between the parties for supply of electrical energy at concessional rates or on the ground that the action taken by the Government was in violation of the provisions of the Electricity Act. In support of the alleged contract itself, at least for the purpose of disposing of this application, we have nothing else except the condition embodied in the sanction which was accorded to the petitioner by the Jaipur Government in 1947. Therein the clause on which stress has beenlaid by the petitioner is Clause (c) which runs thus:

'Power may be given at concessional rates ifavailable.'

The petitioner conceded that there was no other specific order passed by the Government directing supply of electrical energy at concessional rate, but it tries to link up this condition in the order of sanction with, the fact that for a period of about two and a half years electrical energy was supplied to the petitioner in respect of much smaller units for which it continued to make payment from time to time.

It has been vehemently argued before us that the transformer was installed in the premises of the petitioner mainly with the object of supplying energy at concessional rates; in other words, energy was to be supplied on the ratio of the transformer at one twentieth of the normal rate of supply, which means one-twentieth of three annas per unit. The contention is that accordingly, there was nothing wrong in the calculation made by the Government in the bills supplied to the petitioner. The position has been seriously controverted on behalf of the State. It is denied in the counter-affidavit filed by the State that there was any such contract for supply of energy at the rate claimed by the petitioner.

The annexures to the various affidavits filed by the parties go to show that the petitioner made representations to Government for payment of the amount claimed in easy instalments; that the Government in order to facilitate matters granted instalments and from time to time reduced the amount from Rs. 5,000/- per mensem to Rs. 2,000/- and even to Rs. 1,500/- per mensem, and the petitioner Company also made some payment of those instalments. The petitioner claims that it made payment of instalments under protest on account of the impending threat of. disconnection; but the opposite party disputes this position and alleges that the petitioner did not even pay the minimum instalments regularly which they had fixed at Rs. 1,500/- per mensem in order to enable the petitioner to clear off the arrears due.

In this state of affairs, it is difficult for us to decide at this stage about the respective claims of the parties. On the record as it is there seems to be no doubt that ever since the demand the petitioner had paid certain instalments towards the dues claimed and that with a view to accommodate the petitioner the Government had not only reduced the rate of instalment, but also directed to charge the concern provisionally at the rate of two annas per unit from the date of reconnection, when the premises were disconnected on an earlier occasion, presumably on account of default in payment.

Even assuming that this is a case of breach of contract on the part of the respondents who have refused to supply the energy required and have disconnected the premises, the petitioner Company has its remedy by way of suit. In this petition under Article 226 of the Constitution, it is impossible for us to decide about the rights of the parties and in that view of the matter it is quite unnecessary tor us to discuss the various English and Indian decisions cited on the point. We have no desire at this stage to prejudice any litigation that may appropriately arise between the parties in future.

6. The argument of the petitioner which was for the first time set out in its replication that the disconnection amounted to interference with Ms fundamental right to carry on his trade or vocation is not at all convincing. The State Electricity Department which is a commercial concern was not bound to supply energy to the petitioner who is one of its consumers, if the consumer was not prepared to pay for the electricity or had defaulted in payment of its previous dues; and if on that account it disconnects the premises of the petitioner, it cannot be asserted that the disconnection amounts to interference with its fundamental right to carry on trade or business. If that were so, any consumer of electrical energy, whose premises are disconnected, would be entitled to make such an assertion and apply to this Court for a writ of mandamus directing the Electrical Department to reconnect his premises.

7. There is no fundamental right or any right whatever to get supply of electrical energy even from an electrical concern run by the State. The supply is dependent upon various factors and in appropriate circumstances it may be open to the electrical concern to refuse supply to any party. The electrical concern may also refuse supply where a consumer is not willing to pay the requisite charges or has made default in payment.

It all depends upon the terms of the contract, between the consumer and the electrical concern and in the absence of any definite legal right which though asserted in this case is seriously disputed by the State, it is not possible for us to issue any writ directing the petitioner's premises to be reconnected or quashing the claim put forward by the State by virtue of the notices of demand served on the petitioner. The learned Gov-eminent Advocate rightly points out that it is al-ways open to the petitioner under the Electricity Act to obtain its own licence, if it so chooses; for the supply of electrical energy in order to run its cold storage. There is nothing in the law to prevent the petitioner from doing so.

The law has not created any monopoly in the State Government so as to force the petitioner to take energy from the State Electrical Department on the unavoidable terms of the latter in order to run its business. Therefore the disconnection of the electrical energy by the respondent had nothing directly or indirectly to do with the exercise of any fundamental right guaranteed by the Constitution. The decision of the Supreme Court in Mohammad Yasin v. Town Area Committee Jalalabad, AIR 1952 SC 115 on which great reliance has been placed by the learned counsel for the petitioner in support of his contention is clearly distinguishable. That was a case of an illegal impost levied by certain Municipal bye-laws which had the effect of bringing about a total prohibition of the business of the wholesale dealers in a commercial sense. It was held that there was a difference between a tax like the income-tax and a license fee for carrying on a business:

'A license fee on a business not only takes away the property of the licensee but also operates as a restriction on his right to carry on his business, for without payment of such fee the business cannot be carried on at all.'

In that context the Supreme Court further observed;

'If, therefore, the license fee cannot be justified on the basis of any valid law no question or its reasonableness can arise, for, an illegal impost must at all times be an unreasonable restrictionand will necessarily infringe the right of the citizen to carry on his occupation, trade or businessunder Article 19(l)(g) and such infringement can properly be made the subject matter of a challenge under Article 32 of the Constitution.'

Similar was the case in the decision of the Supreme Court in connection with the Kerala Education Bill in re Kerala Education Bill. 1957, Special Ref. No. 1 of 1958: (AIR 1958 SC 956) where some of the objectionable features of the Bill had the effect of depriving certain religious organisations of managing their educational institutions in a manner most suitable to their religious sentiments which under the law they were otherwise entitled to do. No one can doubt the proposition that the fundamental rights enshrined in the Constitution have to be liberally construed and where they do exist must be strictly protected.

No encroachment upon such rights should be permitted under the guise of some subterfuge, because an indirect encroachment is as bad as a direct encroachment. These principles are well established; but all this is not the same thing as saying that such a right should be assumed when in fact no such right exists. Here all that the respondents have done is to make a demand of thearrears due and when the petitioner failed to pay the arrears in spite of all the accommodation of instalments granted to facilitate payment, the respondents disconnected the premises.

It further appears from the record that on 6-1-1958 an order was passed by the Court with the consent of parties under which the respondents were directed to stay their hands on condition that the petitioner offered security and it was only when the security was not furnished that the stay order was recalled on 21-1-1958 and the respondents disconnected the premises. The petitioner thereforecannot now be heard to complain in this application for writ that its premises should not have been disconnected and that the conduct of the respondents was illegal.

We realise that if there is a fundamental right, there cannot be any estoppel against it nevertheless, even if the party who suffers may have acted in ignorance or that right at some earlier stage; but as we have shown there is no such fundamental right here. We therefore regret that we cannot see our way to issue any writ in the circumstances disclosed in the petition, and we further consider it expedient not to express our opinion on some of the other points raised by the parties lestit might prejudicially affect their interest in future.It is of course for Government to considerwhether they would be prepared to show any concession to the industry of the petitioner in orderto help it survive the crisis that has undoubtedlyovertaken it; but we are unable to find any groundfor our interference in the matter in this application for writ. We accordingly discharge the rulewith costs: hearing fee Rs. 150/-.


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