Holding

The writ petition was an abuse of process; the court must not entertain it and should direct the consumer to avail the statutory remedy under the Electricity Act.

Summary

The Calcutta High Court entertained a writ petition filed by a partnership firm and one of its partners seeking a mandamus directing the electricity supplier, CESC Ltd., not to disconnect supply and to refer disputed bills to an arbitrator. The petitioners had not availed the statutory remedy under Sections 26(4) and 26(6) of the Electricity Act, 1948, which require a complaint to the Electrical Inspector for bill disputes. The Supreme Court held that the petition was a gross abuse of process because the court cannot decide the correctness of the bills under its writ jurisdiction and must direct the consumer to the statutory mechanism. It further ruled that the High Court erred in repeatedly granting interim orders that allowed continued supply to a defaulter despite mounting arrears. Consequently, the Supreme Court set aside the High Court's orders, directed the respondent to deposit Rs. 30 lakh towards arrears, referred the dispute to the Chief Electrical Inspector, and ordered attachment of the respondent's properties.

Issues considered

Whether a writ petition is maintainable when a specific statutory remedy under the Electricity Act is available.
Whether the court can direct an electricity supplier to continue supply despite non‑payment of dues.
Whether the court can entertain disputes over the correctness of electricity bills under writ jurisdiction.
Whether the court should have directed the parties to approach the Electrical Inspector as provided by the Electricity Act.

Legislation cited

Electricity Act, 1948s. 24, s. 26(4), s. 26(6)

Subjects

abuse of processwrit jurisdictionelectricity supplystatutory remedySection 24 Electricity ActSection 26 Electricity Actinterim reliefarbitrationconsumer rights

Judgment

- CALCUTTA ELECTRIC SUPPLY CORPORATION LTD.
v.
SH. N.M. BANKA AND ANR.
A

NOVEMBER 21, 1996

[B.P. JEEVAN REDDY AND S.C. SEN, JJ.) B

Constitution of India, 1950 :

,.. - Article 226-Writ petition-Filed without availing statutory
remedy-Maintainability-Partnership finn being defaulter in payment of C
electJicity charges-Supply of electricity disconnected-One of the partner
individually applying for separate meter for the same premises-Corporation
on coming to know the mischief infonned the individual member that supply
of electJicity to him has been kept in abeyance--Partnership [inn and the
member filing writ petition for direction to Corporation not to disconnect
supply of electricity as also to refer disputed Bills to arbitrator-Held, this is D
a case of gross abuse of process of cou~Writ petitioners did not avail of
statutory remedy provided under sub-sections(4) and (6) of s.26 of Electricity
Act but approached the Court for interim relief and by this process managed
to continue to get supply of electJicity even though there was a huge mounting
default-Under writ jurisdiction Court could not have decided about the
co"ectness or otherwise of the bills-If the consumer was aggrieved he should E
have approached the Electric Inspectoi-Court should have declined to inter-
vene in the matter and should have directed I.he consumer to avail of
statutory remedy-High Court should not have allowed the question of dis-
puted bills to linger on for more than five years without disposing of the case
on merits-!t was also not proper for the Court to direct CESC to supply F
electJicity to defaulter [um by interim orders from time to time-Specific
statutory remedy to the consumer should not have been allowed to be
bypassed:ElectJicity Act,19J()-S26(4) and (6).

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14421 of
1996. (j

From the Judgment and Order dated 11.2.92 of the Calcutta High
Court in Appeal No. Nil/91.

P.P. Rao, Raj Kumar Gupta, H.P. Sharma and Rajesh for the Ap-
pellant. H
23
24 SUPREME COURT REPORTS (1996] SUPP. 9 S.C.R.

A Dr. Shankar Ghosh and S.B. Sanyal, A.N. Dawn, Tapash Banerjee,
S. Dutta and B.K. Satija for the Respondents.

The following Order of the Court was delivered :
. '(

-
The following order in this case was passed by us on 6th November, -
B 1996:
"While we propose to give reasons for our Order later, the following
is the operative and final Order in the Special Leave Petition :

Leave granted. - -.
c
The appeal is allowed with the following directions:

(1) Within one month from today, Respondent No.1 - consumer
shall deposit a sum of Rupees thirty lakhs towards the demand of
arrears by the appellant-company against him.
D
(2) On such deposit being made, the dispute between the parties
involved in the Transferred case No. 42 of 1996 shall stand referred
to the Chief Electrical Inspector, Calcutta who shall decide the
same within two months from the date the dispute is referred to
him.
E
(3) If the amount specified in Direction No.1 is not deposited, it
shall be open to the appellant-company to recover the arrears due
to it according to law.

(4) Pending further orders in the matter, all the properties of the
F
respondent are attached herewith.

(5) Respondent No. 1 shall pay the costs of the appellant which
are estimated at Rupees fifty thousand only.

G The reasons for passing the aforesaid order are as under :

This is a case of gross abuse of process of court. One N.M. Banka
had applied to CESC Limited which carries on business of generation,
supply and distribution of electricity in Calcutta and its suburbs for a
connection of electricity to premises No.11, U.N. Mukherjee Road, Calcut-
H ta. After completion of inspection, the CESC agreed to supply electricity
C.E.S.CORPN.LID.v.NM.BANKA 25
to N.M. Banka by letter dated 5th February,1988 subject to compliance of A
usual conditions. Some time later, it came to the knowledge of CESC that
N.M. Banka was a partner of the firm M/s. Rajkumar Dyeing & Printing
Works which was carrying on business at the same premises. The partner-
ship firm was an existing registered consumer from whom a very substantial
sum of money was lying due. Moreover, the partnership firm was found
B
drawing electricity far in excess of the sanctioned load 50 H.P. On coming
to know that N.M. Banka was a partner of Rajkumar Dyeing & Printing
Works, which was a defaulter in payment of electricity charges, the CESC
Limited by letter dated 22 September, 1988 informed Banka that supply of
electricity to him has been kept in abeyance. Apart form the huge liability
of Rajkumar Dyeing & Printing Works, there was also a technical difficulty C
in giving a separate electric connection to Banka because it was not
possible to give two separate electric connections to one particular
premises. Existence of two services in the same premises would hazardous.

On 22nd July, 1988, a writ petition was moved by Rajkumar Dyeing D
& Printing Works, the partnership firm and also Shri Banka, the partner
for a direction in the nature of mandamus commanding CESC and their
officers from disconnecting the electricity line of the factory situated at No.
11, U.N. Mukherjee Road, Calcutta. A prayer was also made to refer the
disputed bills to the arbitrator as provided in the Indian Electricity Act for
adjudication. The allegation was that CESC had issued an inflated bill for E
the month of June, 1988 and were threatening disconnection of electricity
to the appellants if they failed to pay the said bill by 20th July, 1988. It was
further prayed that if the electricity line was disconnected, the factory will
have to be closed down and about 90 workers will have to be laid off
without any fault of the .pppellants. The writ petition was moved ex-parte F
and a direction was given that the electricity supply will not be discon-
nected 'till Wednesday next'. On 28th July, 1988, the matter was once again
heard ex-parte and the interim order not to disconnect the supply was
further continued. The matter, thereafter, has come up for he.iring from
time to time and the interim order has been continued with occasional
directions to deposit some money. By this process, this writ petition was G
kept pending for more than five years. The appellant who was a defaulter
. when the writ petition was filed continued to get supply of electricity by
making occasional payments pursuant to the direction of the Court. The
Writ petitioner did not pay the bills submitted in usual course, the arrears
kept mounting up and the CESC ultimately disconnected the line. By an ·. H ·
26 SUPREME COURT REPORTS (1996) SUPP. 9 S.C.R.
A order dated 16th February, 1993, the Court directed the line to be restored
and the writ petition was directed to remain heard in part.
'( ...
It is difficult to understand how this writ petition was allowed to

B
linger on for five years. The court did not and could not possibly come to
a finding on the disputed questions of fact. According to CESC, the bills
were prepared properly. The appellants did not pay the bills. The total
I
amount of arrears due to the CESC had mounted up to Rs.67,40,948.10
after giving due credit to the payments made by the appellants pursuant to
the interim orders passed by the Court from time to time. On behalf of the
CESC, very serious allegations have been made about theft of electricity
C and overloading as a result of which the meter was burnt out several times
and non-payment of bills. Section 24 of the Electricity Act gives the right
to the supplier to disconnect any electric supply line after giving seven days'
notice, if a consumer neglects to pay the charge for energy due from him
in respect of supply of energy. In case of dispute or difference about the
D meter or the correctness of the bill, the consumer may apply to the
Electrical Inspector. The Inspector in such a case shall estimate the amount
of energy supplied to the consumer. The supplier shall not be at liberty to
take off or remove any meter until the dispute has been determined by
Electrical Inspector. The writ petitioners did not avail of the statutory
remedy provided by sub-sections (4) and (6) of Section 26 but approached
E the Court for interim relief and by this process, managed to continue to
get supply of electricity even though there was a huge mounting default. It
is difficult to understand how the Court allowed the question of these
disputed bills to linger on for more than five years \vithout disposing of the
case on merits. It was also not proper for the Court to direct CESC to
F supply electricity to a defaulter indefinitely by interim orders passed from
time to time. Specific statutory remedy provided by the Indian Electricity
Act to the Consumer should not have been allowed to be bypassed.

It has been contended on behalf of the consumer that the second
prayer in the writ petition was for referring the matter for arbitration. We
G fail to see the sense of this prayer. If the consumer was aggrieved by the
bills, he should have approached the Electric Inspector straight away.
When the Consumer approached the Court, the court should have declined
to intervene in the matter and should have directed the consumer to avail
of the statutory remedy. In any event, under the writ jurisdiction, the Court
H could not have decided about the correctness or otherwise of the bills.
C.E.S. CORPN.LTD. v. N.M. BANKA 27
Serious allegations were made by CESC about the consumption of A
electricity beyond the sanctioned load and also of non-payment of valid
bills. The allegation is al'o that when the electricity supply to Rajkumar
Dyeing & Printing Works was stopped, a partner, Banka, wanted to get a
service line in his own name at the same place to run the printing works.
This was obviously a fradulent move and the CESC rightly refused to grant B
the second line.

R.P. Appeal disposed of.

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