Dismissed

Varinder Kumar,Proprietor of M/Svk Bro v. Pseb and Ors.

Punjab & Haryana HC10 Sept 2010RSA/45/2006

Case brief

AI extract

What is this about?

This judgment disposes of six regular second appeals concerning the legality of clubbing electric connections in the same premises. The High Court upheld the appeal courts finding that two connections in closely situated premises with inadequate partitioning constituted a single unit, allowing the Board to club loads and levy tariffs accordingly.

What did the court decide?

The appeals were dismissed; the impugned judgments and decrees were upheld; the appellant was not entitled to any relief.

Varinder Kumar,Proprietor of M/Svk… — Contract and Commercial Disputes | Punjab & Haryana HC (2010)

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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RSA No.45 of 2006 (O&M) Date of decision: .9.2010

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Varinder Kumar, Proprietor of M/s V.K. Brothers ......Appellant(s) Versus Punjab State Electricity Board and others ......Respondent(s)

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RSA No.46 of 2006 (O&M) Smt. Kailash Wati, Proprietor of M/s Amandeep Rice and General Mills ......Appellant(s) Versus Punjab State Electricity Board and others ......Respondent(s)

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RSA No.47 of 2006 (O&M) M/s Amandeep Rice and General Mills ......Appellant(s) Versus Punjab State Electricity Board and another ......Respondent(s)

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RSA No.48 o M/s Amandeep Rice and General Mills	f 2006 (O&M) ......Appellant(s)
Versus
Punjab State Electricity Board and another	......Respondent(s)

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RSA No.49 of 2006 (O&M) M/s V.K.Brothers ......Appellant(s) Versus Punjab State Electricity Board and another ......Respondent(s)

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RSA No.50 of 2006 (O&M)

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M/s V.K.Brothers

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......Appellant(s)

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Versus

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Punjab State Electricity Board and another

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......Respondent(s)

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CORAM:HON'BLE MR.JUSTICE RAKESH KUMAR GARG

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Present: Mr. S.K. Singla, Advocate for the appellant.

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Mr. S.C. Pathela, Advocate for the respondents.

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Rakesh Kumar Garg, J.

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This judgment shall dispose of six Regular Second Appeals i.e. RSA Nos.45 to 50 of 2006 as a common question of law on similar facts has been raised in all these appeals. However, for the sake of convenience, the facts are being culled out from RSA No.45 of 2006.

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The appellant filed the present suit seeking declaration to the effect that bill of Rs.2,69,104/- for the period from February 1996 to January 1999, which was payable on or before 9.3.1999, pertaining to electric connection No.MS-28 was illegal, void and not binding upon his rights. A further prayer for issuance of permanent injunction was made restraining the respondents from disconnecting the aforesaid electric connection of the appellant permanently and further from recovering the amount in dispute.

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It was averred in the plaint that the appellant is the proprietor of M/s V.K. Brothers. An electric connection No.MS 28 was installed in his premises for the last many years and he was making regular payment of the electricity bills. The aforesaid bill had been issued due to clubbing of the load with another firm M/s Amandeep Rice & General Mills having

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electric connection No.MS-13 whereas both these firms were separate and independent concerns and the appellant-Firm had no concern with the above said firm. Both electric connection No.MS-28 and MS-13 were installed and running in the premises of M/s V.K.Brothers and M/s Amandeep Rice & General Mills respectively. Both the above said firms have their separate gates and separate boundary wall constructed on the spot. Both the firms were having separate set of the proprietors, separate sales tax number, separate licences and separate income status and there was no common member of the appellant-firm with the other firm namely M/s Amandeep Rice & General Mills. The appellant had no concern with M/s Amandeep Rice & General Mills whose proprietor is Smt.Kailashwati. The bill of MS connection of the appellant was converted into LS connection which was against the provisions of the Indian Electricity Act, Regulations and the instructions of the respondent-Board. The aforesaid bill was illegal and not binding. The plaintiff/respondent requested the defendants to admit his claim but to no effect. Hence, the present suit.

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Upon notice, respondent appeared and filed written statement in which various preliminary objections were raised.

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On merits, it was submitted that the electric connection No.MS-28 was existing at the spot. The disputed amount was due from the appellant and the earlier payments made by him had been duly adjusted into his account. It was admitted that bill in dispute was issued after clubbing of load with another connection No.MS-13 installed in the name of M/s Amandeep Rice & General Mills. Previously the respondent-Board had issued notice to the appellant to get the electric connection Nos.MS-28 and MS-13 clubbed. The appellant failed to get the connection clubbed in spite of clear instructions of the Board. The premises of both the firms were checked on 28.1.1999 jointly by the competent Authority of the Board in the

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presence of the appellant-Varinder Kumar who had duly signed the checking report. The site plan was prepared at the site as per actual position on the spot. As per inspection report, the separation wall of both the premises of the firm was not of a proper height and there was an interconnected gate also in the separation wall which confirms that both premises were one for the sake of tarrif and hence fit for clubbing. The site plan submitted by the appellant was not according to the spot. The plaintiffappellant knew that there was no physical and electrical separation on the spot and he had concealed the material facts. The plaintiff had no right to avoid the payment of public money. The defendant-Board had issued separate bill to Kailashwati, proprietor of M/s Amandeep Rice & General Mills. It was stated that the bill issued to the appellant was legal and binding. Lastly, dismissal of the suit was prayed.

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Replication was filed in which the pleas taken in the written statement were controverted and that of the plaint reiterated.

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Out of the pleadings the following issues were framed:-

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“1. Whether plaintiff is entitled to declaration, as prayed for? OPP

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Whether plaintiff is entitled to permanent injunction, as prayed for ? OPP

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3.Whether suit is not maintainable in the present form?OPD

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Whether the plaintiff is estopped to file the present suit by his own act and conduct?OPD

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Relief.”

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Parties led evidence in support of their case. After considering

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the evidence on record and hearing the arguments of the learned counsel for the parties, the trial Court came to the conclusion that the respondent-

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Board had sent the disputed bill as per its commercial circulars and instructions and it was proved that both the connections were running in one and same premises and the bill in dispute was issued due to clubbing of load. However, issues No.3 & 4 were decided against the respondents as no evidence was led by them to prove the same. Resultantly, the suit of the appellant was dismissed.

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Feeling aggrieved from the aforesaid judgment and decree of the trial Court, the appellant preferred an appeal before the Lower Appellate Court which was also dismissed.

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While dismissing the appeal, the Lower Appellate Court observed that the Board was competent to prescribe the terms and conditions for supply of electricity and also to frame uniform tarrifs for such supply and clubbing of electric connections in dispute was done as per the circulars and instructions of the Board. A concurrent finding of fact was also recorded that both the connections were running in one premises as defined in the instructions and circulars of the Board and therefore, the appellant was not entitled to any relief.

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Still not satisfied the appellant has approached this Court by filing the instant appeal.

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Challenging the judgment and decree of the Courts below, learned counsel for the appellant has vehemently argued that the findings recorded by the Courts below on issues No.1 & 2 are the result of misreading and misconstruing the evidence which has occasioned from the misinterpretation of the relevant provisions of the Sales Regulations of the respondent-Board and keeping in view the definition of “premises” as provided in Para 167.1 of Sale regulations and the site plan showing premises of both the firms, it cannot be said that both the industrial concerns were located in the same premises. It is evident from the

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evidence that both the premises are appropriately partitioned as admittedly there is a boundary wall in both the premises and both the premises were having separate entry gates and thus, there was no occasion for the Courts below to observe that the electric connections of both the firms are in the same premises. According to the learned counsel for the appellant para 167.4 of the Sales Manual Regulations has been misinterpreted. According to him, to attract the applicability of aforesaid sales manual instructions the work must be being carried on by one concern whereas in the present case neither the work was carried on by the one concern, nor there was any finding to that effect. On the contrary, the appellant proved on record by way of documentary evidence that the work was being carried out by different concerns/proprietors. Moreover, a perusal of the aforesaid Sales Manual Instructions would show that it does not entitle the respondents to club the loads of two connections and the only consequence of not complying the aforesaid provision provided is in the form of non accommodating in future in providing certain other services/facilities.

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On the basis of the aforesaid argument, learned counsel for the appellant has submitted that following substantial questions of law arise in this appeal:

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(i) As to whether a finding recorded by misinterpreting and misreading the relevant paras of the regulations is sustainable in law?

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(ii) As to whether the impugned judgments and decree are the result of ignoring the relevant evidence adduced in the case?

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(iii) As to whether the respondents can club the electric connection of the appellant with the electric connection of the neighbouring firm?

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On the other hand learned counsel appearing on behalf of the respondents has submitted that a concurrent finding of fact has been recorded by the Courts below that both the connection in dispute were found running in one premises and thus, both the connections were clubbed legally and as per circulars which have the statutory force. It was further argued that the officials of the checking team found that there was interconnecting passage between both the premises and the partition wall was not of proper/required height and therefore, it was rightly held that both the connections were running in one premises. Since the appeals are not having any merit, the same are liable to be dismissed.

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I have heard learned counsel for the parties and have perused the record of the case and various circulars and instructions relied upon by the parties.

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Section 49 of the Electricity (Supply) Act 1948 (hereinafter in short referred to as Act of 1948) empowers the Board to prescribe such terms and conditions as it thinks fit for supplying electricity to any person other than a licensee. Section 49 of the aforesaid Act empowers the Board also to frame uniform tariffs for such supply. The terms and conditions of supply have statutory force. I am fortified in my view by an authoritative pronouncement of the Hon'ble Surpeme Court in M/s Hyderabad Vanaspathi Ltd. Vs. Andhra Pradesh State Electricity Board and others AIR 1998 Supreme Court 1715. Therefore, CC No.” 14/97, CC No:45/94, CC No.78/95 relating to running of more than one connection in the same premises, regulation of extension in load by MS/SP/consumers, clubbing of connections and billing at LT supply, circulars containing terms and conditions concerning matter of clubbing of connections and running of two connections in the same premises issued by defendant Board have statutory force.

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In fact with all the fairness, Sh. S.K.Singla, learned counsel for the appellant, has not disputed the aforesaid proposition of law.

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It is not in dispute that at the time of checking, Varinder Kumar-appellant was present and had duly signed the inspection report. Ex.D1, which reads as follows:-

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“Subject:- Joint Inspection-A/c No.MS-13 & MS-28 of Amandeep Ice Factory & V.K.Bros.Rice Sheller under Patto Hira Singh sub-divn.

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The premises were inspected jointly S.E./Op.Circle, Faridkot and Director/Enf. Bathinda. As per facts, the site sketch was prepared at site. The separation wall is not of proper height and there is a gate in the separation wall which confirms that two premises are one for the sake of tariff and hence fit for clubbing to be charged on clubbed tariff separately.

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Sd/Sd/Director Enf. (Er.J.S.Grewal) PSEB, Bhathinda S.E./Op.Circle Faridkot”

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From the perusal of the aforesaid report, there is no dispute that the separation wall of both the premises was not of proper height and there was a gate in the separation wall to interconnect both the premises. There is no evidence on record to challenge the correctness of the aforesaid report. In fact, the correctness of the aforesaid report has not been challenged before this Court by the learned counsel for the appellant while raising the arguments. It is also not in dispute that Kailashwati proprietor of M/s Amandeep Rice & General Mills (MS-13) is the mother of

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the appellant.

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As noticed above, the authority of the respondents to issue terms and conditions for supply of electricity from time to time is not disputed nor there is any dispute that the aforesaid terms and conditions are having statutory force. What has been disputed before this Court is that there is no provision in the terms and conditions/ Circulars of the Board on the basis of which clubbing of electric connection in the case of appellant can be sustained. In fact, the case of the appellant is that if the appellant does not choose to get the two connections running in the same premises got clubbed, the only consequence is in the form of non accommodation in future in providing certain facilities/ service and the same will not entitle the respondent-Board to club the two electric connections on their own and change the tariff from time to time. Moreover, according to the learned counsel for the appellant, both the electric connections were running in separate premises belonging to the separate independent entities having no connection with each other and therefore, even assuming for the sake of arguments that the respondent-Board has the power of clubbing in the present case, the same was not applicable.

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The “premises” has been defined in para 167.1 of Sales Regulation for supply of electricity to consumers which reads as under:-

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“Premises is the unit of building complex which has separate entry, and is appropriately partitioned from the neighbouring premises in a manner that electric connection running in the said premises cannot be used in the neighbouring premises and vice-versa.”

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From the aforesaid provisions, it is crystal clear that the premises is a unit which has a separate entry and is appropriately

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partitioned from the neighbouring premises in a manner that the electric connection running in the said premises cannot be used in the neighboring premises and vice versa. In the present case, admittedly the partition wall is not of required height and there is an interconnected gate between the two premises and, therefore, it can not be said that both the premises i.e of appellant and of M/s Amandeep Rice and General Mills were appropriately partitioned in a manner that the electric connection running in one premises cannot be used in the neighbouring premises, meaning thereby both the premises where MS connection-28 and MS connection-13 were running, have to be taken as one premises.

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Now it is useful to refer to various relevant Sales Manual

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Instructions which read as follows:

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“167. RUNNING OF MORE THAN ONE CONNECTION IN THE SAME PREMISES:-

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Some consumers take more than one connections in the same premises, in the same or different names resulting into loss by way of application of wrong schedule of tariffs. Similarly, there are consumers who manage to get connection in the defaulting premises tactfully in the name of a near relative or a partner of the firm so as to get rid of the outstanding amount against them/such consumer. Release of a new connection or more than one connection in the same premises should be regulated as under:

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167.1 Premises is the unit of building complex, which has separate entry and is appropriately partitioned from the neighbouring premises in a manner that electric connection running in the said premises can not

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be used in the neighbouring premises and vice-versa.

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167.2 Whenever an existing consumer applies for a new connection in the same premises (independent construction/unit having separate identity) in his name, it should not be allowed and the consumer should be asked to apply for extension in existing load. Whenever a new connection is applied by the same consumer in a new premises by carving out from the existing one or by purchasing adjoining land/premises, it should be treated as extension in load.

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167.2.1 Where any person whether or not a member of the family, partner director etc. of an existing consumer applies for a new connection in the same premises or in a contiguous premises by carving out from existing one or by purchasing an adjoining land/premises in his own individual name or in the name of a new firm/company this should be allowed only if(a) there is a physical separation and (b) also where the premises in question are legally transferred sold or leased to a new unit and appropriate entry exists in the municipal record regarding such transfer. This implies that there should be a registered deed for lease or for sale and informal agreement for family partition/lease etc. would not be acceptable.

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167.2.2 Where Punjab Govt. has allowed the registration of more than one unit/renting out of the premises for setting up the industrial units in industrial plots/sheds in the focal points depending upon the size

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of the plot and subject to fulfillment of some conditions laid down for the purpose, in such cases the new connection may be allowed provided such units are in the name of different persons and parts of such sheds/plots being used by different industrialists are properly demarcated and separated from each other by making suitable partition so that it is not possible to use electricity from one unit to another and in case of one connection having been disconnected due to defaulting amount etc. the same can not be run from other connection(s) in the adjoining industrial units by trapping some supply points.

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167.3 Whenever an existing consumer applies for clubbing of 2 or more connections running in his name at the same premises, clubbing of all such connections may be allowed by the officers competent to sanction the total load after clubbing.

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167.4 If more than one industrial connection is running in the same premises in different names and work is carried out by one concern/proprietor, such consumers should be prevailed upon to get the loads clubbed after getting it changed in one name. In case they do not agree, their request for any extension, splitting or transfer of existing load shall not be accommodated.

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167.5 If in the event of clubbing of existing industrial connections of the same consumer getting supply of 400 volts, the total load exceeds 100 KW, the clubbing in such cases may be allowed at 11000 volts

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only. If after clubbing the load the contract demand exceeds 2500 KVA for general industry and Power Intensive Industry ( Induction Furnace) the clubbing will be allowed at EHT i.e. 33/66 KV and above. Supply at 11 KV can be allowed for contract demand up to 4000 KVA as per provisions of Sales Regulation No.4.2.

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167.6 Clubbing at consumer's Request:.......”

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The aforesaid provision clearly bars a new connection in the same premises where an electric connection is already existing. Further, these instructions make it clear that a new connection can be allowed only if there is a physical separation from the existing consumer. Instruction 167.4 provides that if more than one industrial connection is running in the same premises in different names and the work is carried out by one concern/proprietor, such consumers should be prevailed upon to get the load clubbed after getting it changed in one name and in case they do not agree, their request for any extension, splitting or transfer of existing load shall not be accommodated, meaning that two separate connections cannot run in the same premises. Not only this, instruction 167.2 also provides that whenever the existing consumer applies for a new connection in the same premises, it should not be allowed and consumer should be asked to apply for extension in existing load.

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Thus, from a careful perusal of Sales Manual Instructions, it is clearly established that running of two connections in one premises cannot be allowed and they are to be clubbed and the load of both these connections is to be treated as one and thereafter, the total load of the aforesaid connections is to be considered for applying the relevant tariff.

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It is also relevant to refer to Sales Manual Instruction No.268 at this point:

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“Similarly, Commercial Circular No.78/95 was issued vide Memo No.91860/92610/SMI-268 dated 15.9.95 which reads as under:-

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Sub- Running of more than one connection in the same premises-SMI-268. It has been observed and experienced that existing instructions contained in SMI-268 are not being meticulously followed and new connections in the same premises are being given. Such violations of the instructions are being pointed-out repeatedly by Accounts Audit as well as Technical Audit. Avoidance of higher voltage legal supply has been pointed out by the audit as a result of giving more than one connection in the same premises. Instances have also been noticed where more than one connection has been given in the same premises to avoid higher tariff. Also instructions issued vide CC No.32/90 dated 12.6.90 for avoiding circumvention of the instructions have not been very useful in curbing the tendency for getting a new connection in a premises carved-out of the existing one or by purchasing an adjoining land. In order to make the provision of clubbing and new connection in the same premises more error proof , it has been decided as under:(i) Where any person whether or not a member of the family, partner, director etc. applies for a new connection in the same premises, this should be allowed only if

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(a) there is a physical separation, and also where the premises in question are legally transferred, sold or lease to the new unit and appropriate entry exists in the municipal record regarding such transfer. This implies that there should be a registered deed for lease or sale informal agreement of family partition/lease etc.

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should not be accepted.

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(ii) The cost of clubbing shall be borne by the Board when after clubbing of different connections, the voltage level of the total clubbed load remains the same. Where after clubbing off loads the consumer is required to get supply on the next higher voltage he should bear the expenditure required for laying higher voltage lines and nottingup of his own sub-station etc.”

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The aforesaid Sales Manual Instructions has been inserted to safeguard the interest of the Board in certain cases. In certain cases, the consumers take more than one connection in the same premises in different names creating different identity thereby resulting into loss of higher rental, by way of application of different tariff, to the Board. Similarly, many consumers also manage to get connection in the defaulting premises tactfully in the name of relative or partner of the firm so as to payment of defaulting amount outstanding against them. To avoid such a situation, the Board has been authorized to club such connections running in one premises and treat the total sanction load as extension in load and apply the relevant tariff.

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In view of the aforesaid discussion, the argument of the learned counsel for the appellant cannot be accepted. As per the Sales Manual Instructions, as referred to above, the Board is competent to club the load of two electric connections found running in the same premises and apply a different tariff as applicable. It is not in dispute here that in this case, treating both the connections as one and taking the load of both the connections together the bill in dispute was issued under the LS tariff correctly. A finding of fact has been recorded by the Courts below that the partition wall between the two premises in question was not of a proper height and there was an interconnecting gate and therefore, it cannot be

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said that there was no possibility of using the electricity of one connection for running the neighbouring connection or vice versa therefore, no fault

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can be found with the findings recorded by the Courts below.

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No substantial question of law arises.

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Dismissed.

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September , 2010 (RAKESH KUMAR GARG) ps JUDGE

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RSA No.46 of 2006 (O&M) Smt. Kailash Wati, Proprietor of M/s Amandeep Rice and General Mills ......Appellant(s)

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Versus