M/S Seagull Laboratories Pvt. Ltd. Vs Hpsebl and Others

Taking into consideration the grievance raised in this writ petition, nature of the order impugned herein and the order being passed hereinafter, reply to the writ petition is not required from the respondents. The matter has accordingly been heard at this stage.

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1 Whether reporters of print and electronic media may be allowed to see the order? Yes.

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2. An assessment order was issued on 13.07.2010

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against the petitioner under Section 126 of the Indian Electricity Act, (hereinafter referred to as the Act) by respondent No.3. Petitioner availed statutory remedy against the said order by filing an appeal under Section 127 of the Act before the Divisional Commissioner, Dharamshala, District Kangra. The Appellate Authority, vide order dated 30.06.2012, stayed the operation of the assessment orders dated 13.07.2010 and 14.05.2012. While granting interim relief to the petitioner, the Appellate Authority observed in the order that the balance of convenience was in favour of the petitioner and that, in case the interim injunction was not granted, the petitioner would suffer loss.

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The case record shows that the matter thereafter remained pending before the Appellate Authority. On 25.10.2024, petitioner’s appeal was dismissed in default. The copy of the order-sheet of the day placed on record reflects that no appearance had been caused in the appeal either for the petitioner or for the respondent–State Electricity Board. On 18.12.2025, respondent No.3 issued

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notice to the petitioner for depositing an amount of Rs.14,24,409/- along with interest of Rs.12,82,855/-. The notice was issued factoring dismissal of petitioner’s appeal

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by the Appellate Authority on 30.10.2024. The petitioner was also directed to deposit the amount within 15 days, failing which disconnection of its electricity was to follow.

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On receipt of the aforesaid notice, the petitioner became aware of the dismissal of its appeal in default (as contended by learned Senior Counsel for the petitioner) and on 15.01.2026 moved an application under Order 9 Rule 9 read with Section 151 of the Code of Civil Procedure for its restoration. Application was also moved for condonation of delay in seeking restoration of appeal. While the application for restoration was pending, the respondents taking note of petitioner’s having not deposited the amount in question, ordered disconnection of its electricity. Application of petitioner was taken up by the Appellate Authority i.e. Divisional Commissioner, Kangra Division at Dharamshala and following order was passed in the matter on 25.02.2026: -

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“Case taken up for hearing. Ld. vice counsel Pragati Kumari to Ld. Counsel Sh. Munish Sharma alongwith Sh. Naresh Chouhan, present for appellant.

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Present appeal is not admitted as appellant has not deposited half of the assessed amount with HPSEBL. No evidentiary proof regarding deposition is there with appeal.”

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In the aforesaid circumstances, the petitioner

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has instituted this writ petition.

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3. Heard learned counsel on both sides and

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considered the case file.

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4. The Appellate Authority refused to entertain petitioner’s application for restoration of the appeal on the ground that the appeal had not been admitted and that the petitioner had not furnished any documentary proof for deposit of half of the assessed amount with HPSEBL.

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No doubt, Section 127(2) of the Electricity Act, 2003 provides that an appeal against an order of assessment shall not be entertained unless an amount equal to half of the assessed amount is deposited. Nonetheless, it remains a fact that despite petitioner’s nondepositing the half of the assessment amount, its appeal had not just been entertained by the Appellate Authority but following interim order was also passed therein on 30.06.2012: -

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“Shimla, Dated: 30^th June, 2012.

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The appeal under section 127 of Electricity Act 2003 has been preferred by the appellant counsel, Shri Y.K. Pathak and prayed on behalf of the appellant that the operation of annexure C-6 and C-7 dated 13.7.2010 and 14.5.2012 respectively be stayed till further orders and in case the said relief is not granted the appellant would suffer irreparable loss.

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I have gone through the averments and pleadings of the appeal and application and after going through the same and in view of the urgency, I am of the opinion that the balance of convenience is in favour of the appellant and in case the interim injunction is not granted the appellant would suffer loss as the balance of convenience lies in favour of the appellant. In view of

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the above the operation of annexure C-6 and C-7 is hereby stayed till further orders.”

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It is quite evident, there was no direction in the

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interim order requiring the petitioner to deposit the assessed amount in terms of Section 127(2). Learned Senior Counsel for the petitioner submitted that the petitioner on its own had deposited Rs.77,770/- as part of the assessed amount on 27.06.2012 before respondent No.3.

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Liability to deposit half of the assessed amount

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in order to maintain an appeal before the Appellate Authority is statutory, despite this petitioner’s appeal had been entertained by the Appellate Authority in the year 2012 without insisting upon deposit of 50% assessed amount and an interim order was passed therein on 30.06.2012, which continued to remain in force for about 13 years. In the given facts & circumstances, the Appellate Authority ought to have granted some reasonable time to the petitioner to deposit the balance assessed amount due from it as per Section 127(2) of the Act. The appeal, which remained pending for adjudication for about 13 years, was dismissed for default on a day when neither of the parties remained present. The application for restoration of appeal was not allowed on the ground of petitioner’s having not deposited half of the assessed amount with HPSEBL on the

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date of filing the appeal. Considering that petitioner’s appeal had already been entertained and interim order passed therein had not been made subject to compliance of Section 127(2) of the Act, such recourse as adopted by the Appellate Authority cannot be approved in the given facts. However, looking to the fact that the aforesaid compliance is mandatory in terms of the scheme of the Act, it is deemed appropriate to provide some reasonable time to the petitioner for depositing 50% of the assessed amount before respondent No.3 in terms of Annexure P-2.

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At this stage, learned Senior Counsel for the respondents submitted that since the petitioner had been enjoying the electricity connection without depositing the assessed amount and the appeal had remained pending before the competent authority for about 13 years without deposit of the mandatory 50% of the assessed amount, the petitioner should be directed to deposit the balance of 50% assessed amount along with interest. This is a fair proposal put forth for the respondents. Hence, this writ petition is disposed of with following directions:-

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The petitioner shall be at liberty to deposit the balance assessed amount in terms of Annexure P-2 and as per requirement of Section 127(2) of the Electricity Act with the respondents-HPSEBL within three weeks from today.

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The aforesaid amount shall be deposited along with interest at the rate of 6% per annum from due date. On such deposit, petitioner’s appeal pending before the Divisional Commissioner shall stand revived. The petitioner shall move a formal application in this regard before the Appellate Authority immediately after depositing the amount. It shall be open to the petitioner to seek restoration of its electricity connection before the Appellate Authority.

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In case the petitioner avails the liberty as granted to him under this order, then looking to the fact that the appeal was initially filed before the Appellate Authority in the year 2012, the said authority shall make an endeavour to dispose of the same as expeditiously as possible, preferably within four months from today.

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The writ petition stands disposed of in the above terms, so also the pending miscellaneous application(s), if any.

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Jyotsna Rewal Dua Judge

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April 02, 2026 Mukesh

M/S Seagull Laboratories Pvt. Ltd. v. Hpsebl and Others

Case brief

What is this about?

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M/S Seagull Laboratories Pvt. Ltd. v. Hpsebl and Others

Case brief

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What the court decided

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