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Himachal Pradesh State Electricity Board & Another v/s M/s.Dhruv Hotels & Resorts & Another

    CWP No. 2742 of 2009

    Decided On, 10 May 2016

    At, High Court of Himachal Pradesh

    By, THE HONOURABLE MR. JUSTICE SANDEEP SHARMA

    For the Petitioners: Satyan Vaidya, Senior Advocate, with Vivek Sharma, Advocate. For the Respondents: Rahul Mahajan, Advocate.



Judgment Text

1. By way of present petition the petitioners have prayed for following main relief amongst other:-

'(a) That writ of certiorari may be issued and Annexure P-5 passed by the ld. Appellate authority i.e. respondent No.2 below may kindly be quashed and set aside.'

2. Needless to say that the present petitioner No.1, is a creation of statute under the Electricity Act, 1948 and Electricity Act, 2003 and w.e.f. 15th June, 2009 all assets and liabilities of the Board stand vested in State of Himachal Pradesh in terms of Sections 131 and 133 of the Electricity Act, 2003.

3. Present petition has been filed by the functionaries of Himachal Pradesh State Electricity Board, duly authorized to file and maintain the present writ petition, praying for the issuance of writ of certiorari quashing the impugned order dated 22.5.2009 (Annexure P-5) passed by Appellate Authority i.e. the Divisional Commissioner, Mandi Division, Mandi under the Electricity Act, 2003 (in short `Appellate Authority’), whereby order dated 24.9.2008 passed by the Senior Executive Engineer, Electrical Sub Division, HPSEB, Parwanoo, District Solan, H.P. has been quashed and set aside.

4. It emerges from the pleadings available on the record that respondent No.1, who runs Hotel in the name of M/s.Dhruv Hotels and Resorts, Pinjore Nalagarh Road, NH, 21, Baddi, Sandholi, Tehsil Nalagarh, District Solan, applied for load of 98 KW for running the Industrial Unit of the Company, which was granted by the present petitioners. However, an inspection was carried out by petitioner No.2, Senior Executive Engineer, Electrical Division, HPSEB, Parwanoo, District Solan, H.P. on 11.7.2007 and it transpired that respondent No.1 has indulged in unauthorized use of electricity as he, without any valid permit and prior approval, as required under law, from the electricity authority, extended the load of electricity from 98 KW to 176.24 KW. Accordingly, provisional assessment on account of un-authorized use of electricity was made by the Assessing Officer in accordance with the provisions of Section 126(1) of the Electricity Act, 2003 and a sum of Rs.5,17,184/- was calculated on account of un-authorized use of electricity payable by respondent No.1. Averments contained in the petition suggest that the aforesaid provisional assessment, alongwith calculation sheet, was served upon respondent No.1 vide letter dated 20.6.2008, whereby he was called upon to reply to the show cause notice as to why the aforesaid amount be not realized from him. Though respondent No.1 was under obligation to file reply to the aforesaid show cause notice within a stipulated time but, it appears, that no reply whatsoever was filed to the show cause notice. Apart from this, respondent No.1 was at liberty to file objections against the aforesaid order of provisional assessment conducted by the present petitioners. Since no objections were filed against the aforesaid order of provisional assessment, the same attained finality. It emerges from the record that since no reply was received from respondent No.1, final assessment was drawn by the competent authority and order of the same was served upon respondent No.1 vide letter dated 24.09.2008. Perusal of the show cause notice dated 20.06.2008, Annexure P-1, and order dated 24.09.2008, Annexure P-2, suggest that there were specific allegations against respondent No.1 that he has indulged in unauthorized use of the electricity and is liable to make payment amounting to Rs.6,72,747/-.

5. Respondent No.1, instead of filing reply to the order dated 24.09.2008, passed by petitioner No.2, filed an appeal under Section 127 of the Electricity Act, 2003 before the Appellate Authority. However, the same was finally decided by the Appellate Authority, who was, at the relevant time, having duel charge of Shimla and Mandi Divisions. Present petitioners filed detailed reply to the aforesaid appeal. Respondent No.2, Appellate Authority, vide impugned order dated 22.5.2009 allowed the appeal and set aside the order dated 24.09.2008 passed by the Senior Executive Engineer, Electrical Sub Division, HPSEB, Parwanoo, District Solan, petitioner No.2 herein, whereby respondent No.1 was called upon to deposit an amount of Rs.5,17,184/- within a period of one month.

6. Aggrieved and dis-satisfied with the aforesaid order passed by the Appellate Authority, petitioners approached this Court by way of present petition.

7. Present petitioners sought quashment of the impugned order passed by the Appellate Authority on the ground that the same is not sustainable in the eye of law as the same is not based upon correct appreciation of the documentary evidence made available on the record by the petitioners-authorities. It has been specifically averred in the grounds of challenge that finding returned by learned Appellate Authority that no reasonable opportunity was given to respondent No.1 before passing the orders, is not correct, rather, contrary to the documents available on the record. It was specifically pleaded that, it stands proved on record that respondent No.1 has indulged in un-authorised use of electricity as he, without any valid permit or prior approval from the electricity authorities, extended the load of electricity from 98 KW to 176.24 KW. Learned Appellate Authority miserably failed to acknowledge that show cause notice was issued to the respondent No.1 specifically calling upon him to file reply, if any, within a period of 15 days from the date of issuance of the notice. Since Authority was not satisfied with the reply filed by respondent No.1 to show cause notice issued by it, which was well in its rights to issue final assessment under Section 126 of the Electricity Act.

8. Respondent No.1, by way of detailed reply filed in this Court, refuted all the submissions/averments made by the petitioners and supported the impugned order dated 22.5.2009 passed by the Appellate Authority setting aside the assessment order dated 24.09.2008 and allegations with regard to unauthorized use of electricity were also specifically denied and submitted that load of 98 KW, originally granted in favour of respondent No.1 by the petitioners, was never extended to 176.24 KW. It is also submitted in the reply that respondent No.1 had replied to the show cause notice dated 20.06.2008, wherein specific plea with regard to additional rooms constructed by him was raised which was not taken into consideration by the petitioners. Respondent also submitted that additional load of 102 KW was applied on December, 2007 and power availability certificate was issued by the Superintending Engineer, Operational Circle, HPSEB vide letter dated 28.2.2008 and they had deposited Rs.30,600/-. However, respondent No.1 submitted that they never indulged in any un-authorized use of electricity and final assessment order dated 24.09.2008 was passed by the petitioners without following the principle of natural justice, as such, same was in complete violation of Section 126(3) of the Electricity Act, 2003. Since no opportunity of being heard was given to respondent No.1, he was compelled to approach the Appellate Authority under the Act.

9. I have heard learned counsel for the parties and have gone through the record of the case.

10. Mr.Satyan Vaidya, learned Senior Counsel appearing on behalf of the petitioners, vehemently argued that the impugned order dated 22.5.2009 passed by the Appellate Authority is not sustainable, at all, in the eyes of law and the same deserves to be quashed and set aside. Mr.Vaidya vehemently argued that there was ample material available on record to suggest that before passing final assessment order opportunities were afforded to the respondent No.1 to file reply/objections, if any. He also invited the attention of this Court to show cause notice dated 20.06.2008, Annexure P-1, whereby respondent was to put caveat that he has indulged in using unauthorized electricity, as a result whereof, assessment of quantum of penalty for the period 4/07 to 3/08 has been proposed to be made, which provisionally works out to Rs.6,72,747/-. Whereas, perusal of Annexure P-1 suggests that 15 days time was granted to respondent No.1 to file reply to the show cause notice, meaning thereby that the respondent No.1 was always at liberty to file objections, if any, to the provisional assessment carried out by the petitioners. Mr.Vaidya further invited the attention of this Court to the final order dated 24.9.2008 to suggest that final assessment under Section 126 of the Act was passed after getting reply, wherein number of documents were enclosed. Hence, the very allegation of respondent No.1 that he was not afforded an opportunity before passing of final order dated 24.9.2008 is not correct, rather, the same is contrary to the documents on record.

11. Mr.Vaidya strenuously argued that even the bare perusal of the impugned order passed by the Appellate Authority, under Section 127 of the Electricity Act, 2003, itself suggests that the Appellate Authority while passing final order has failed to take into consideration the material made available on record by the petitioners. Mr.Vaidya forcefully contended that though material available on record clearly establish the guilt of respondent No.1, i.e. unauthorized use of electricity, and the findings returned by the Appellate Authority are bereft of any plausible reasoning. Mr.Vaidya pointed out that while returning the findings, learned Appellate Authority has observed that 'petitioner No.2 has placed the demand without verifying the actual position and just issued the show cause notice' acceded its jurisdiction. Show cause notice was issued to the respondent on the basis of physical inspection report submitted by Superintending Engineer (Operation). Moreover, findings of the Appellate Authority that respondent had applied to Himachal Pradesh Tourism Development Corporation to give permission for constructing additional rooms, sanction thereof was still awaited, could not be any ground justifying illegal and unauthorized use of the electricity. He invited the attention of this Court to reply filed by the respondent where he himself stated that since additional rooms were made operational, additional load of 102 KW was applied in December, 2007, but fact remains that the same was never issued by the petitioners authorities. Lastly, Mr.Vaidya contended that findings returned by the Appellate Authority that no opportunity of being heard was given to the respondent is also contrary to the record, especially, in view of the fact that proper show cause notice, indicating therein the purpose and assessment, was sent to the respondent specifically calling his reply within a period of 15 days. Rather, respondent had filed reply to the writ petition, annexing therewith documents, with a view to rebut the allegations of unauthorized use of electricity by him. Mr.Vaidya prayed for quashing of the impugned order passed by the Appellate Authority solely on the ground that if at all learned Appellate Authority was of the view that, while passing of order dated 24.09.2008 by Sr.Executive Engineer, HPSEB, principles of natural justice were not complied with and respondent was not afforded opportunity of being heard, proper course was to remand the case back to the petitioners-authorities for doing the needful. But in the instant case Appellate Authority has fallen in grave error, while quashing and setting aside the order dated 24.9.2008, meaning thereby that the entire demand raised by the petitioners has been set aside solely on the ground that no opportunity of being heard was given to respondent, which is also contrary to the documents on record.

12. Mr.Rahul Mahajan, learned counsel appearing on behalf the respondent, supported the judgment passed by the Appellate Authority and stated that no opportunity of being heard was ever afforded to the respondent by the petitioners before issuing final order dated 24.09.2008. He specifically argued that the reply, which was filed by respondent No.1 to the show cause notice, wherein specific plea with regard to the permission of additional rooms, as applied for by the respondent to the Himachal Pradesh Tourism Development Corporation and sanction whereof was still awaited, was never taken into consideration by the petitioners. It was also brought to the notice of the petitioners that on December, 2007, they had already applied for additional load of 102 KW for which power availability certificate was issued by the Superintending Engineer, Operational Circle, HPSEB vide letter dated 28.2.2008 and they had deposited Rs.30,600/- on 3.3.2008. He has specifically refuted the allegation of Mr.Vaidya that he indulged in illegal and unauthorized use of electricity.

13. Mr.Rahul Mahajan, learned counsel, has placed reliance on the decisions of various High Courts in D. Shanthi vs. The Superintending Engineer Tamil Nadu & Another, 2015 SCC OnLine Mad 12224, M/s.Mithila Autos vs. The State of Bihar & Ors., 2015 Supreme(Pat) 318, M/s.Assotech C.P. Infrastructure Pvt.Ltd. vs. M.P. Madhya Kshetra Vidhyut Vitran Co. Ltd. & Another, 2014 SCC OnLine MP 2807, Mool Chand Saini vs. State of U.P. and Others, 2013 Supreme(All) 233, Sri S.G. Parameshwaraiah vs. The State of Karnataka & Others, 2012 SCC OnLine Kar 3836 and Sri.M.P. Sreenath Gupta S/o Sri M.Prabhakar Gupta vs. The Asst.Executive Engineer (EI) Bangalore Electricity Supply Co TRD W3 Sub Division & Another, 2008 Supreme(Kar) 247, and prayed that in these cases demand raised by the Electricity Authorities, under Electricity Act, for illegal and unauthorized use of electricity, was quashed and set aside by the Appellate Authority on the ground that the parties were not afforded opportunity of being heard, but perusal of judgment relied upon by the respondent depicts that though impugned order was quashed but liberty was given to the Electricity Authorities for initiating fresh proceedings, after affording an opportunity of being heard, to pass fresh order. Hence, judgments relied upon by Shri Mahajan is of no help to the respondent.

14. A bare perusal of the facts and circumstances narrated herein above as well as arguments having been made by the counsel representing the parties depicts that show cause notice dated 20.06.2008 was issued by the petitioner pointing therein that respondent has indulged in using unauthorized electricity as a result, whereof petitioner has made provisional assessment of quantum of penalty for the period from 4/07 to 3/08, amounting to Rs.6,72,747/-. He was also given time of 15 days to file reply to the show cause notice. Rather, perusal of order dated 24.09.2008 i.e. final assessment made under Section 126, whereby the respondent was called upon to deposit Rs.5,17,184/- also suggests that pursuant to the issuance of show cause notice, as referred above, respondent filed a representation annexing therewith contractor’s bill, supplier’s bill pertaining to December, 2007 & January, 2008 and certificate from Tourism Department pertaining to 28.5.2007 regarding fixing of room rent for additional seven rooms.

15. From the aforesaid facts it emerges that show cause notice was issued to the respondent which was duly replied by him. However, facts remains that, 'whether the reply filed by the respondent was taken into consideration at the time of passing of final order dated 24.09.2008' was required to be looked into by the Appellate Authority envisaged under the Act. Though it appears from the pleadings of the petitioners that they had taken into consideration the reply filed by the respondent regarding issuance of order dated 24.09.2008 but admittedly there is no record with regard to personal hearing, if any, given to the respondent at the time of passing of order dated 24.09.2008. Question with regard to 'whether the fact with regard to the additional seven rooms constructed by the respondents was required to be considered by the Authority at the time of final assessment dated 24.09.2008, especially in view of the fact that though respondent applied for additional load of 102 KW, is being left open by the Court for adjudication, if any, by Authority constituted under the Act. However, this Court, while dealing with the aspect of noncompliance of principle of natural justice, leaving this question open to be decided by the Authority concerned. However, the impugned order dated 22.5.2009 passed by the Appellate Authority invoking powers under Section 127 of the Act does not appear to be correct or valid on one account that if the Appellate Authority had come to the conclusion that the respondent was not afforded opportunity of being heard before issuance of final order dated 24.9.2008, proper course was to remand the case back to the Authority with the direction to decide the same afresh by affording due opportunity of being heard to the respondent. But in the present case, admittedly, Appellate Authority has quashed final order dated

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24.09.2009 passed by Sr.Executive Engineer, Electrical Division, HPSEB, Parwanoo, meaning thereby that the entire demand raised by the petitioners has been declared as null and void. True it is that before passing of order dated 24.09.2008, petitioners were bound to comply with the principle of natural justice, whereby they were under obligation to afford an opportunity of being heard to respondent before passing any final assessment order as has been observed above. Though show cause notice was issued to the respondent and reply was also filed but certainly there is nothing on record which could suggest that at the time of passing of order dated 24.09.2008, parties were heard and some discussions were made on file to reach final decision as has been appended with the order dated 24.09.2008. 16. In view of above, I am in total agreement with the contention raised by Mr.Satyan Vaidya that the order of Appellate Authority dated 22.5.2009 is not correct inasmuch it has quashed the order dated 24.09.2008, passed by Sr.Executive Engineer, whereby demand was raised by way of final assessment calling upon the respondent to deposit an amount of Rs.5,17,184/-. 17. Consequently, in view of the aforesaid discussion and observations made, impugned order dated 22.5.2009, passed by the Appellate Authority under Section 127 of the Electricity Act, is quashed and set aside, but, with a view to avoid multiplicity of litigation, this Court deems it proper, at this stage, to direct the petitioners to comply with the principle of natural justice and afford an opportunity of being heard to the respondent before passing final assessment order and thereafter petitioners may raise afresh demand, if required, in accordance with law. Accordingly, the writ petition is disposed of. All the interim orders are vacated. All the miscellaneous applications are disposed of.
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