Disposed

K.S.E.B v. Jacob Mathew

Kerala HC18 Feb 2009WA/694/2008

Case brief

AI extract

What is this about?

The High Court of Kerala disposed of an appeal by Kerala State Electricity Board challenging a single judge's order allowing a consumer to credit payments towards principal arrears instead of interest. The court held it was not fair to retrospectively revise the Board's fixed amount, agreeing with the lower court's relief while clarifying its view was not based on interpreting interest liability c

What did the court decide?

Writ appeal disposed of rejecting the Board's challenge to the lower court's directions regarding the crediting of consumer payments towards principal arrears.

K.S.E.B Vs Jacob Mathew — Service and Employment | Kerala HC (2009)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HON'BLE THE ACTING CHIEF JUSTICE MR.J.B.KOSHY & THE HONOURABLE MR. JUSTICE V.GIRI WEDNESDAY, THE 18TH FEBRUARY 2009 / 29TH MAGHA 1930

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WA.No. 694 of 2008 -------------------AGAINST THE JUDGEMENT IN WPC.28653/2007 Dated 24/10/2007

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APPELLANT(S): RESPONDENTS

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KERALA STATE ELECTRICITY BOARD, REPRESENTED BY ITS SECRETARY, VYDHUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM.

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THE SPECIAL OFFICER, REVENUE, KSEB, VYDHUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM.

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BY ADV. SRI.C.K.KARUNAKARAN, SC FOR KSEB

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RESPONDENT(S): PETITIONER

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JACOB MATHEW, MADATHIL PUTHENPURAYIL HOUSE, AYARKUNNAM VILLAGE, KOTTAYAM DISTRICT.

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ADV. SRI.K.M.VARGHESE FOR R1

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 18/02/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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J.B.KOSHY,Ag.C.J. & V.GIRI, J

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W.A.694/2008

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Dated this 18^th day of February, 2009

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JUDGMENT

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Giri, J

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The Electricity Board challenges the judgment of the learned single Judge by which the learned Judge had inter alia interfered with an order passed by the Secretary of the Board affirming that the determination of certain arrears due from the writ petitioner and as noted in earlier communication issued by the Board, is a mistake and that the actual arrears was significantly higher than what was noted as due from the consumer. After quashing Ext.P19, learned Judge issued certain comprehensive directions stipulating the manner in which the amount between the consumer and the Board had to be settled. Board has come up in appeal against the interference with Ext.P19 and a further communication in this regard.

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The dispute between the petitioner and a consumer of electricity arose out of the steps taken by the Board to categorize the petitioner, a low tension consumer, as a

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W.A.694/2008

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high tension consumer, consequent upon the Board deeming the petitioner as a high tension consumer. It seems that the fixed charges for the electricity consumed by the petitioner, upto 31.8.1991 was revised and ultimately by Ext.P5 notice dated 1.8.1995, the Special Officer determined the amount due from the petitioner as 82,006.50/-, considering the same as arrears due upto 31.8.1991. On a request made by the consumer, the amount was permitted to be paid in ten equal instalments.

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Petitioner did pay the amount and he has no dispute regarding his liability to pay the amount as per Ext.P5. The grievance arose out of the subsequent demand made in the year 1999 for penal interest and that too in relation to the arrears upto 31.8.1991 which was the subject matter of Ext.P5. According to the Board, the remittance made by the petitioner earlier was adjusted towards the interest at the rate of 24%, levied thereon. The Board took the stand that remittance

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W.A.694/2008

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made by a consumer towards arrears must go in defray of accrued interest and it can be adjusted against the principal only if the entire liability to interest is discharged. Board therefore, took the stand, that what was noted in Ext.P5 was a mistake. It is this stand which was ultimately affirmed in Ext.P19. The same was challenged by the petitioner.

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Learned single Judge took the view that though the relationship between the consumer and the Electricity Board is that of a debtor and a creditor, in the context of arrears of electricity charges and normally the creditor is entitled to adjust the payments effected against accrued interest, unless there is an agreement to the contrary, there is nothing which prevents the creditor from treating the payment in defray of the principal amount. Learned single Judge took the view that there is no law which prevents the Board from accepting the payments made and treat it as one in defray of the liability towards the principal amount, thereby resulting

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W.A.694/2008

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in the diminution of the interest liability. Finding that the action taken by the Board in disowning Ext.P5 is arbitrary, learned single Judge set aside Ext.P5 and declared that the amount due from the petitioner as arrears upto 31.8.1991, as on 1.8.1995 shall stand fixed at Rs.82,006.50/-. Learned single Judge nevertheless directed that the interest at the rate of 24% shall run on the said amount for the period thereafter. It is this that has been challenged by the Board in this appeal.

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5. We heard learned counsel for the appellants.

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Learned counsel for the appellants contended that clause 32(g) of the conditions of Supply of Electrical energy stipulates that “if the arrears of dues are permitted to be paid in instalments, the interest for the arrears shall be paid in full along with first instalment.” Thus, payment received towards arrears is liable to be adjusted towards interest in the first instance and then only towards the principal amount. We have considered

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W.A.694/2008

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this contention. As a proposition of law and with reference to the manner in which the Conditions of Supply of Electrical energy are to be interpreted, it may be correct to say that once the liability to pay any amount to the Electricity Board as electricity charges is finally determined and the liability is also accepted by the consumer, then the Board is entitled to levy interest on such determined arrears at the rates prescribed in the conditions or in the agreement between the consumer and the Board. If that be so, then facility for instalment given to the consumer at his instance shall not cause prejudice to the interest of the Board and the remittance made towards the instalments shall not result in the Board loosing the benefit of interest on staggered payments.

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But in the present case, we are inclined to agree with the directions of the learned single Judge for the reason that the mistake if any, in Ext.P5 was not the contribution of the consumer. It is not as if the consumer

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had given a calculation, which was mistakenly accepted by the Board and that such mistake was later realized by the Board, nor is it a case where the determination of the dues from the consumers, as noted in Ext.P5, was palpably erroneous. As the learned Judge found, the adjustments made by the Board, towards the principal amount itself cannot be considered as illegal or otherwise in contravention of any statutory provision. If that be so, in the facts and circumstances of the case, it may not be fair to permit the Board to revise the amount stated to be due from the petitioner as on 31.8.1991, with retrospective effect. We also take note of the fact that the learned Judge has taken care of the interests of the Board also by declaring the consumers' liability to interest at 24%, on the amount determined as due by the Board itself as per Ext.P5.

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For all these reasons, we do not find any reason to interfere with the directions issued by the learned single Judge and we are in agreement with the same, in the

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facts and circumstances of the case. But we make it clear that neither the judgment of the learned single Judge nor this judgment need be treated as one resultant upon an interpretation of the Conditions of Supply of Electrical energy in so far as it relates to the liability to interest on accrued arrears, payable by the consumer.

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Writ appeal is disposed of subject to the above direction.

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J.B.KOSHY, Acting Chief Justice

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V.GIRI, Judge

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mrcs

K.S.E.B v. Jacob Mathew

Case brief

What is this about?

What did the court decide?

K.S.E.B v. Jacob Mathew

Case brief

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