w w w . L a w y e r S e r v i c e s . i n



Damodar Valley Corporation, having its office at DVC Towers, Through its Chairman v/s M/s. Gautam Ferro Alloys, a unit of M/s. Bihar Foundary & Casting Ltd., Through its Managing Director Dr. Hari Krishan Budhia & Others

    L.P.A. No. 325 of 2018 with I.A. No. 5388 of 2019

    Decided On, 12 May 2020

    At, High Court of Jharkhand

    By, THE HONOURABLE CHIEF JUSTICE DR. RAVI RANJAN & THE HONOURABLE MR. JUSTICE SUJIT NARAYAN PRASAD

    For the Appellant: Srijit Choudhary, Advocate. For the Respondents: Nitin Kumar Pasari, Advocate.



Judgment Text


CAV

Sujit Narayan Prasad, J.

I.A. No.5388 of 2019:-

1. The instant interlocutory application is under Section 5 of the Limitation Act for condoning the delay of 202 days in preferring the instant appeal.

2. This Court, after taking into consideration the reason assigned in the instant application as also considering the fact that instead of dismissing the appeal on the ground of limitation it would be appropriate in the ends of justice to decide the appeal on its merit, accordingly, the delay in filing the appeal is condoned.

3. In the result, the instant interlocutory application is disposed of.

L.P.A. No.325 of 2018:-

4. The instant intra-court appeal is directed against the order/judgment dated 12.03.2018 passed by the learned Single Judge of this Court in W.P.(C) No.5664 of 2017 whereby and whereunder the writ petition has been allowed by which the order dated 27.12.2016 wherein the decision has been taken by the appellant/respondent authority holding the writ-petitioner/respondent not entitle for remission of the Demand Charge and Guaranteed Energy Charge under Clause 4 of the bilateral agreement for the period from 03.09.2005 to 27.10.2005 as also with a direction upon the respondent authorities holding the writ-petitioner/respondent entitled for interest in pursuance of Clause 10.7.4 of the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2015 on the amount of demand charge and guaranteed energy charge from the date it was paid to the DVC till this amount with interest is actually paid to it.

5. The brief facts as per the pleadings made in the paper-book which require to be enumerated herein for proper adjudication of the lis are :

The writ-petitioner/respondent, namely, M/s Gautam Ferro Alloys, a unit of M/s Bihar Foundary & Casting Ltd. is engaged in manufacture of Silico Maganese and Ferro Alloys. It was granted electric connection for a contract demand of 3000 KVA for which a bilateral agreement was entered between the parties on 25.02.2003. On the allegation of violation of certain statutory provisions, the Jharkhand State Pollution Control Board (hereinafter referred to as the JSPCB) vide its order dated 20.12.2004 directed for closure of the writ-petitioner’s unit, and on 03.09.2005 its factory premises was sealed by JSPCB.

The writ-petitioner approached to this Court by filing writ petition being W.P.(C) No.5033 of 2005 challenging the impugned action of the respondent-JSPCB and by an interim order dated 25.10.2005 the Pollution Control Board was directed to remove its seal from the factory premises of the writ-petitioner’s company within three days, and in compliance of the said order, JSPCB removed its seal on 27.10.2005.

The period between 03.09.2005 to 27.10.2005 became the bone of dispute which led the writ-petitioner to file series of litigation. The appellant had issued an energy bill for the Month of October, 2005 demanding the bill for the period from 03.09.2005 to 27.10.2005. The writ-petitioner came to this Court challenging the demand of bill raised for the period from 03.09.2005 to 27.10.2005 by filing a writ petition being W.P.(C) No.5870 of 2009.

The specific plea raised by the writ-petitioner was that on account of circumstances beyond its control which would attract the Force Majeure clause as incorporated under Clause-4 to the bilateral agreement dated 25.02.2003, it is not liable to pay the Demand Charge and Guaranteed Energy Charge to the respondent-DVC. The writ-petitioner by that time has succeeded before the revisional authority. The Member, Board of Revenue, Jharkhand who by an order dated 05.12.2006 quashed the order passed by the Chairman, Jharkhand State Pollution Control Board holding that the Pollution Control Board had issued impugned order in breach of the second proviso to Section 21(4) of the Air (Prevention and Control of Pollution) Act, 1981.

The order passed by the Member, Board of Revenue is the major defence raised by the writ-petitioner before the Writ Court in W.P.(C) No.5870 of 2009 raising the plea that when the writ-petitioner’s unit has been closed for the period from 03.09.2005 to 27.10.2005, the same being in the nature of Force Majeure as per the condition incorporated under Clause 4 to the Bilateral Agreement dated 25.02.2003 and as such the Demand Charge and Guaranteed Energy Charge for the aforesaid period are not sustainable.

6. The learned Single Judge had accepted the plea and vide order dated 29.03.2011 remanded the matter to the appellant-DVC to decide the claim of the writ-petitioner/respondent regarding adjustment of the energy bill for the period between 03.09.2005 to 27.10.2005 vis-a-viS Clause 4 of the bilateral agreement.

7. The order passed by the writ court was assailed in appeal by the DVC in intra-court appeal being L.P.A. No.283 of 2011. The Letters Patent Appeal was confined only to the finding recorded by the writ court in its order dated 29.03.2011 by which the Single Bench of this Court had held that the question of closure of writ-petitioner’s unit on account of Force Majeure has already been decided by the Member, Board of Revenue. The said part of the order passed by the writ court was interfered with by the Division Bench of this Court in L.P.A. No.283 of 2011 by disposing of the said appeal vide order dated 12.03.2012 in the aforesaid terms.

The claim of the writ-petitioner, on remand, was rejected by the Deputy Chief Engineer (Commercial) by a cryptic order dated 18.03.2013, being aggrieved with the aforesaid order the writ-petitioner again approached to this Court by filing a writ petition being W.P.(C) No.2408 of 2013, which was allowed vide order dated 10.09.2015 by which the impugned order dated 18.03.2013 was quashed by the writ court and the matter was remanded before the Deputy Chief Engineer (Commercial) to pass a fresh order, in pursuance to the same, the order dated 27.12.2016 was passed, which has been quashed and set aside by the learned Single Judge and directed for making payment of interest for the aforesaid period which is under challenge, subject matter of the present intra-court appeal.

8. Mr. Srijit Choudhary, learned counsel for the appellant/respondent has assailed the aforesaid order inter alia on the ground that the learned Single Judge has failed to consider that the dispute by and between the parties is related to the terms of agreement entered into by and between the parties which can either be decided by a competent civil court or by arbitrator in accordance with the agreement.

The further ground has been agitated that the learned Single Judge erred in holding that the writ-petitioner was not liable to pay Demand Charge and Guaranteed Energy Charge from the period in between 03.09.2005 to 27.10.2005 and therefore, exempt the writ-petitioner of the above charges which is not in consonance with the terms of Clause 11.10.3, new Clause 10.7.4.

9. The ground has been taken in assailing the impugned order whereby and whereunder the learned Single Judge has held the writ-petitioner liable for interest in terms of Clause 10.7.4 of the 2015 Regulations.

The learned counsel for the appellant, on the ground mentioned hereinabove, has submitted that the impugned order is not sustainable in the eye of law and accordingly, the same is fit to be quashed and set aside.

10. Per contra, Mr. Nitin Kumar Pasari, learned counsel for the writ-petitioner/respondent has advanced his argument by taking aid of the condition of agreement pertaining to shortage of power supply to the extent that such failure or shortage is due to the Force Majeure on account of the events such as strike, lock-out, fire, accident, cyclone or any other act of God beyond the control of any party or due to any restraint or regulation of the State Government or Central Government or any other statutory authority, according to him, the learned Single Judge by taking into consideration the fact about closure of the unit by an order passed by the JSPCB which is a statutory authority and therefore, bringing the case of the writ-petitioner under the fold of the agreement as contained under Clause 4, has passed an order quashing the demand raised by the respondent-DVC for the period from 03.09.2005 to 27.10.2005 and as such, according to him, since the bilateral agreement contains a specific provision about the consequence of closure of the unit due to Force Majeure, no demand can be raised and if by taking into consideration the aforesaid condition the order has been passed by the learned Single Judge, it cannot be said to suffer from any infirmity.

11. The contention about direction pertaining to interest is that since there is no fault lying on the part of the writ-petitioner in closure of the factory, therefore, if the order of interest has been directed to be paid in favour of the writ-petitioner considering the closure to be illegal since the same has been set aside by the order passed by the Member, Board of Revenue and as such the writ-petitioner since has suffered financial loss due to illegal closure of the unit, hence, is entitle-D for interest for the aforesaid period due to loss sustained by the writ-petitioner.

12. He, on the basis of the aforesaid submission, has submitted with emphasis that the learned Single Judge while passing such order in the facts and circumstances of the instant case, has not committed any error, therefore, the order impugned may not be interfered with.

13. This Court, having heard the learned counsel for the parties and after going across the material available on record as well as finding recorded in the impugned order has found some admitted fact which require to be referred herein.

The writ-petitioner has been granted with electric connection for a contract demand of 3000 KVA. As a condition precedent, a bilateral agreement was entered in between the parties on 25.02.2003. The aforesaid bilateral agreement contains a provision as under Clause 4 wherein it has been provided :

“Both the parties shall ensure compliance with the terms of this agreement. However, no party shall be liable for any claim for any loss, damage or compensation whatsoever arising out of the failure to carry out the terms of this agreement or shortage of power supply to the extent that such failure or shortage is due the Force-Majeure on account of the events such as strike, lock-out, fire, accident, cyclone or any other act of God beyond the control of any party or due to any restraint or regulation of the State Govt. or Central Govt. or any other statutory authority. But any party claiming the benefit under this clause shall satisfy the other party of the existence of such a Force-Majeure and shall make the best endeavour to perform its normal obligations as per terms of this Agreement as soon as possible after the cessation of such Force-Majeure. If at any time the consumer is prevented from receiving or using the electrical energy to be supplied under this agreement either in whole or in part or if the Corporation is prevented from supplying or unable to supply such electrical energy owing to any one of the aforesaid reasons, then the Demand Charge and the Guaranteed Energy Charge as set out in Schedule-II annexed hereto payable by the consumer shall be reduced in proportion to the ability of the consumer to take or the Corporation to supply such power.

Provided that the failure of the consumer to use the electrical energy under this agreement either in whole or in part due to planned shut-down and/or breakdown of machinery or plant in course of normal operation or shutdown of machinery or plant due to non-availability of raw materials or similar other reasons shall not be ground for the aforesaid reduction in Demand Charge and the Guaranteed Energy Charge.”

It is evident from the aforesaid condition which speaks about Force Majeure on account of the events such as strike, lock-out, fire, accident, cyclone or any other act of God beyond the control of any party or due to any restraint or regulation of the State Government or Central Government or any other statutory authority.

It appears from the aforesaid condition that the party if claiming benefit under the aforesaid clause, shall satisfy the other party of the existence of such a Force-Majeure and shall make the best endeavour to perform its normal obligations as per terms of this Agreement as soon as possible after the cessation of such Force-Majeure.

It further appears that if at any time the consumer is prevented from receiving or using the electrical energy to be supplied under this agreement either in whole or in part or if the Corporation is prevented from supplying or unable to supply such electrical energy owing to any one of the aforesaid reasons, then the Demand Charge and the Guaranteed Energy Charge as set out in Schedule-II annexed thereto payable by the consumer shall be reduced in proportion to the ability of the consumer to take or the Corporation to supply such power subject to the condition that failure of the consumer to use the electrical energy under this agreement either in whole or in part due to planned shut down and/or breakdown of machinery or plant in course of normal operation or shutdown of machinery or plant due to non-availability of raw materials or similar other reasons shall not be granted for the aforesaid reduction in Demand Charge and Guaranteed Energy Charge.

14. The writ-petitioner/respondent has started running the business after the energy being supplied in pursuance to the agreement dated 25.02.2003 but the JSPCB has passed an order on 20.12.2004 for closure of the unit and in pursuance to the aforesaid order, the factory premises was sealed by JSPCB on 03.09.2005. The writ-petitioner came to this Court by filing a writ petition being W.P.(C) No.5033 of 2005 challenging the order dated 20.12.2004 passed by JSPCB wherein vide interim order dated 25.10.2005, the Pollution Control Board was directed to remove its seal from the factory premises of the writ-petitioner’s unit within three days, and in compliance of the said order, JSPCB removed its seal on 27.10.2005.

15. The appellant/respondent came out with energy bill for the period from 03.09.2005 to 27.10.2005, the writ-petitioner being aggrieved with the aforesaid demand has approached again to this Court by filing a writ petition being W.P.(C) No.5870 of 2009 challenging the action of the appellant/respondent in raising such demand which according to the writ-petitioner was contrary to the clause 4 to the bilateral agreement dated 25.02.2003.

The writ court quashed and set aside the order raising demand for the period from 03.09.2005 to 27.10.2005 by remanding the matter before the authority concerned by taking the plea about Force Majeure as provided under Clause 4 to the agreement as referred above.

16. This Court accepting the plea of the writ-petitioner and taking into consideration the order passed on 20.12.2004 by the JSPCB as also the same having been quashed by the Member, Board of Revenue vide order dated 05.12.2006 has remanded the matter before the DVC, to decide the claim of the writ-petitioner regarding the adjustment of the energy bill for the period from 03.09.2005 to 27.10.2005.

The writ-petitioner has preferred an appeal being L.P.A. No.283 of 2011 but the part of the order has been interfered with by the Division Bench while disposing of the L.P.A. vide order dated 12.03.2012 holding therein that since the closure of the writ-petitioner’s unit on account of Force Majeure has already been decided by the Member, Board of Revenue, therefore, the part of the order by which the demand has been raised for the period from 03.09.2005 to 27.10.2005 has been interfered with by remanding the matter before the authority, in pursuance thereto, the order has been passed on 18.03.2013 which has again been challenged by filing writ petition being W.P.(C) No.2408 of 2013 which was allowed vide order dated 10.09.2015 by which the impugned order dated 18.03.2003 was quashed by the writ court and again the matter was remanded to the Deputy Chief Engineer (Commercial) to pass a fresh order, in pursuance thereto, a fresh order was passed on 27.12.2016. It has been challenged before this Court in W.P.(C) No.5664 of 2017 which has been allowed, which is the subject matter of the present intra-court appeal.

17. This Court, after going through the finding recorded in the impugned order, has found therefrom that two folds directions have been passed, first pertains to the demand for the period from 03.09.2005 to 27.10.2005 and second pertains to interest on the payment made against the demand.

18. So far as the grievance pertaining to demand for the period from 03.09.2005 to 27.10.2005 is concerned, the admitted position herein is that JSPCB by an order passed on 20.12.2004 sealed the writ-petitioner’s unit WHICH remained under seal for the period from 03.09.2005 to 27.10.2005. The order of closure was challenged by the writ-petitioner before the Member, Board of Revenue. The Member, Board of Revenue quashed and set aside the order raising the demand. The writ-petitioner being aggrieved with the demand for the period from 03.09.2005 to 27.10.2005, the period for which the demand has been raised along with the guaranteed charge, the contention which has been raised and has been considered by the learned Single Judge pertaining to the provision of Clause 4 of the agreement which contains a clause for Force Majeure. Admittedly, herein the period of closure of the unit is due to an order passed by the JSPCB. The order of closure has been set aside by the Member, Board of Revenue.

It cannot be disputed that the JSPCB is a statutory body incorporated and enacted by virtue of force of law. The condition as contained under Clause 4 to the bilateral agreement contains a provision of Force Majeure and if the operation of the unit due to the Force Majeure will be stopped, no demand can be raised.

19. This Court has proceeded to examine the fact about the condition of closure of the writ-petitioner’s unit which can be said to come under the fold of Force Majeure entitling the unit to take advantage of Clause 4 of the agreement dated 25.03.2005. As has been stated hereinabove, JSPCB is a statutory authority, as would appear from the condition stipulated under Clause 4 of the bilateral agreement that the closure of the factory unit due to order passed by the statutory authority/body, will come under the fold of Force Majeure. The admitted fact herein is that the JSPCB has passed an order OF the closure/sealing of the writ-petitioner’s unit which has subsequently been quashed and set aside by the Member, Board of Revenue.

Now the question is that WHETHER the closure due to the order passed by the JSPCB will come under the fold of Force Majeure or not ? The same is required to be examined herein.

20. The order passed by the JSPCB pertaining to sealing of the factory led the closure of the writ-petitioner’s unit from 03.09.2005 to 27.10.2005, however, finally the order passed by the JSPCB has been quashed and set aside by the Member, Board of Revenue. It is therefore, evident that the writ-petitioner’s unit was closed due to the order passed by the JSPCB which is a statutory body and if any order has been passed by the statutory authority/body it cannot be said that the closure of the unit will go out of the purview of Clause 4 of the bilateral agreement dated 25.03.2005.

21. This Court, therefore, is of the view that since the closure is by the JSPCB which is a statutory authority/body coming under the fold of condition underlying to cover the case under Force Majeure, will be attracted herein, and if the factory has been closed due to Force Majeure, the appellant/respondent will be prevented from raising any Demand Charge and Guaranteed Energy Charge in view of the condition stipulated under Clause 4 of the bilateral agreement.

22. The learned Single Judge after taking into consideration these aspects of the matter had rightly quashed and set aside the impugned decision taken by the authority raising the Demand Charge and Guaranteed Energy Charge for the period from 03.09.2005 to 27.10.2005, therefore, we consider no reason to interfere with the same.

23. So far as the direction pertaining to interest for the said period is concerned, in pursuance to the provision of regulation 11.10.3 of the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2005 contains a condition for payment of interest on the excess payment made by the writ-petitioner @ DPS charged by the respondent-DVC.

24. The writ-petitioner is making such claim on account of illegal closure of writ-petitioner’s unit and even though the bill has been raised and the same has been paid, therefore, the interest is required to be paid by the appellant.

25. Mr. Srijit Choudhary, learned counsel for the DVC has questioned the aforesaid direction inter alia on the ground that however the closure of the writ-petitioner’s unit is not in dispute but neither the closure of the unit has been informed nor the appellant-DVC has been impleaded party to the proceeding before the Member, Board of Revenue questioning the demand raised for the period from 03.09.2005 to 27.10.2005.

26. In order to examine the issue raised in this regard, we have travelled to the provision of Clause 11.10.3 of the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2005 which is pari materia to Clause 10.7.4 of the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2015 which reads hereunder as:

“If the consumer has paid any excess amount, it shall be refunded to the consumer within 15 days or, if consumer opts, be adjusted within two subsequent bills. The Distribution Licensee shall pay to the consumer interest charges at the rate equivalent to the delay payment surcharge as per tariff on the excess amount outstanding on account of such wrong billing from the date of payment till the date of refund or adjustment in subsequent bills.”

It is evident from the aforesaid provision that if the consumer has paid any excess amount, it shall be refunded to the consumer within 15 days or, if consumer opts, be adjusted within two subsequent bills. The Distribution Licensee shall pay to the consumer interest charges at the rate equivalent to the delay payment surcharge as per tariff on the excess amount outstanding on account of such wrong billing from the date of payment till the date of refund or adjustment in subsequent bills. The admitted case herein is that the writ-petitioner’s unit was closed by an order passed by the JSPCB which was questioned by the writ-petitioner before the Member, Board of Revenue but admittedly the appellant-DVC was not impleaded party to the proceeding before the Member, Board of Revenue.

Demand has been raised for the period of closure of the writ-petitioner’s unit i.e., 03.09.2005 to 27.10.2005, however, the bill for the aforesaid period has been paid. The payment of interest since is covered under Clause 10.7.4 of the Jharkhand State Electricity Regulatory Commission (Electricity Supply Code) Regulations, 2015 which contains a provision to make payment of interest to the consumer if the consumer has paid any excess amount, it shall be refunded to the consumer within 15 days along with the interest.

27. It is admitted position herein that the writ-petitioner/respondent was the consumer having contract load of 3000KVA in pursuance to the agreement entered on 25.02.2003. It is not in dispute that once a consumer enters into an agreement for a contract demand for supply of certain quantity of energy, it is expected that the licencee will incur revenue but on any reason whatsoever if the supply would be interrupted the licencee would be put to loss. Admittedly, herein the writ-petitioner’s unit was closed from 03.09.2005 to 27.10.2005 due to the order passed by the JSPCB on 20.12.2004.

28. The contract demand means demand in Kilowatt/Kilovolt, mutually agreed between the distribution licencee and the consumer or other written communication. The agreement for the aforesaid purpose also contains a condition about Demand Charge and the Guaranteed Energy Charge.

The demand charges are additional fees that utilities charge non-residential or commercial customers for maintaining constant supply of electricity.

These fees usually amount to a substantial sum of money that businesses must pay on monthly electric bills. Guaranteed energy charge payable by the consumer shall be reduced in proportion to ability of the consumer to consume or the corporation to supply such power.

Provided that the failure of the consumer to use any additional power during the period of allotment shall not be a ground for aforesaid proportionate calculation of demand charge, meaning thereby, in pursuance to the contract, the licensee is expected to incur revenue from the supply of the energy which is by way of demand charge and the guaranteed energy charge.

29. Admittedly herein energy has been supplied during the period from 03.09.2005 to 27.10.2005, however, the same has not been consumed due to the closure of the unit on account of Force Majeure as has been decided hereinabove, therefore, making any demand for the period of closure of the unit with respect to the power supply, the same will be said to be unjustified in view of the specific provision as contained under condition No.4 to the agreement dated 25.02.2003 but so far as the interest is concerned, admittedly, due to the closure of the writ-petitioner’s unit, the appellant/respondent has incurred loss in revenue due to the contract demand as because the said supply could not have been converted and diver

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ted towards other consumer in view of the subsistence of the bilateral agreement. Now in such a situation can the writ-petitioner will be held to be entitled to get the interest ? 30. We, on examination of the factual aspect, are of the view that the writ-petitioner’s unit since has not consumed the electricity, therefore, he has been held not liable to make payment of the bill pertaining to the period for which the unit was closed. Admittedly due to the closure, the electricity has not been consumed for the said period and hence, DVC-respondent has sustained revenue loss for no fault of his own. However, the provision is there to make payment of the excess amount along with interest but in the facts and circumstances revolving round herein, the question of applicability of the aforesaid regulation which provides provision to make payment of interest will be applicable or not as because if a direction with respect to the payment of interest is passed, the same will lead to excess burden upon the State Exchequer and therefore, it is the position of law that while directing for making payment of interest, the Court is to be conscious on the basis of the fact that if any laches lies on the part of the authorities, the payment of interest can be directed to be paid. 31. This Court has examined the aforesaid grievance along with the finding recorded by the learned Single Judge pertaining to the direction for payment of interest and is of the view that admittedly the licensee, DVC, has not incurred any revenue due to non-consumption of electricity, however, the payment has been raised which has also been paid by the writ-petitioner but herein it is the admitted position that closure of the unit was not due to any laches or fault committed on the part of the DVC and if there is no laches on the part of the licensee and if there would be a direction for making payment of interest, it will be nothing but putting the licensee in loss in two fronts, first, loss in not incurring the revenue and second by making payment of interest. 32. In view of the facts and circumstances and considering the reason mentioned hereinabove, this Court is of the view that the learned Single Judge ought to have taken into consideration these aspects of the matter before passing such direction. 33. In view of the aforesaid reason, we are not in agreement with the finding/direction of the learned Single Judge pertaining to payment of interest, therefore, the same is held to be not sustainable in the eye of law, accordingly, quashed and set aside. 34. In the result, the appeal is allowed in part. 35. In consequence thereof, the relief pertaining to demand for the period from 03.09.2005 to 27.10.2005 is allowed and pertaining to issuance of direction for payment of interest, stands dismissed. I agree Dr. Ravi Ranjan, C.J.
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