Paragraph numbers below are the court’s original numbering, recovered from the source text.
20. We have already seen that Section 49 of the Supply Act empowers the Board to prescribe such terms and conditions as it thinks fit for supplying electricity to any person other than a licensee. The section empowers the H A Board also to frame uniform tariffs for such supply. Under Section 79(j) the Board could have made regulation therefore but admittedly no regulation has. so far been made by the Board. The Terms and Conditions of Supply were notified in H.P. Ms. No. 6 90 dated 17. 9.197 5 in exercise of the powers conferred by Section 49 of the Supply Act. They came into effect from 20. I0.1975. They B were made applicable to all consumers availing supply of Electricity from the Board. The section in the Act does not require the Board to enter into a contract with individual consumer. Even in the absence of an individual contract, the Terms and Conditions of Supply notified by the Board will be applicable to the consumer and he will be bound by them. Probably in order c to avoid any possible plea by the consumer that he had no knowledge of the Terms and Conditions of Supply, agreements in writing are entered with each consumer. That will not make the terms purely contractual. The Board in performance of a statutory duty supplied energy on certain specific terms and conditions framed in exercise of a statutory power. Undoubtedly the terms and conditions are statutory in character and they cannot be said to be purely D contractual.
21. In Punjab State Electricity Board v. Bassi Cold Storage, Kharar and Another, [1994] Supp 2 S.C.C. 124, this court held that the conditions of supply are akin to subordinate legislation.
22. In Bihar State Electricity Board and Others v. Parmeshwar Kumar Agarwa/a and Others, (1996). 4 S.C.C. 686, the court held that they are part of statutory terms and conditions. In para 16 of the judgment the court said: "Before we advert to the effect produced by a combined reading of the four clauses, it deserves to be pointed out that the terms and conditions have sacrosanctity, in that Rule 2 7 of the Indian Electricity Rules, 1956, framed by the Central Electricity Board in exercise of power under Section 3 7 of 1910 Act has, read with Annexure VI thereof, provided the model conditions of supply which are required to be adopted by the State Boards. It is on the basis of this statutorily prescribed model, with suitable variations, that energy had been supplied by the Board to the consumers. The model conditions can be said to be akin to the model Standing Orders prescribed by Industrial Employment (Standing Orders) Act, 1947, which, when certified, become part of the statutory terms and conditions of service between the employer and employees and they govern the relationship between HYDERABAD VANASPATHI LTD. v. A.P. STATE ELEC. BOARD (SRINIVASAN, J.J 639 the parties, as held in Workmen v. Firestone 1.'vre & Rubber Co. of A India (P} Ltd., SCC atp. 832, [1973] l S.C.C. 813. We are inclined to think that similar is the effect of terms and conditions, on which a State Board supplies energy to the consumers".
23. Learned counsel for the consumers has referred to Shri Vi dya Ram Misra v. Managing Committee, Shri Jai Narain College, [1972] l SCC 623. B In that case Statute 151 framed under the Lucknow University Act, 1920 provided that the terms and conditions of service of a teacher must be incorporated in the contract to be entered into between the teacher concerned and the college. Hence the court held that the terms and conditions mentioned in Statute 151 had proprio vigore no force of law. That decision has no C relevance here.
24. The ruling in Executive Committee of Vaish Degree College. Shamli and others v. Lakshmi Narain and others, (1976] 2 SCC 58 cited by learned counsel has no applicability as the court found on the facts that the Executive Committee was not a statutory body.
25. We are unable to uphold the view expressed oy the Full Bench in the judgment under appeal that the terms and conditions of supply are purely contractual. In our opinion the Terms and Conditions of Supply are statutory in character. V The Supply Act
26. It is contended that Clause 39 of the Terms and Conditions of Supply falls outside the power conferred on the Board in Sec. 49 of the Supply Act. According to learned counsel the power of the Board to impose such terms and conditions as it thinks fit, is expressly made subject to the other provisions of the Act which means that the Board can impose only such F conditions as may be found in an agreement between other ordinary licensees and consumers. The contention is that the Board can neither define 'malpractices' nor prescribe an adjudicatory machinery for assessing and levying penal damages. Such matters are, according to counsel, essential legislative functions which cannot be delegated to the Board.
27. We are unable to accept the contentions. Section 49 empowers the Board to supply electricity on ·such terms and conditions as it thinks fit'. It may also frame uniform tariffs. We have found that the terms and conditions of supply are statutory in character. They can be invalidated only if they are in conflict with any provision of the Act or the Constitution. Learned counsel H c have not shown to us any provision in the Supply Act with which Clause 39 is in conflict. In so far as the Supply Act is concerned, argument hovers around Section 49 only_ The only limitauon in that Section is that the terms and conditions of ~upply should be subject to the provisions of the Act. Clause 3 9 does not violate any provision in the Supply Act. It is the statutory duty of the Board to arrange for the supply of electricity throughout the State and for transmission and distribution of the same in the most efficient and economical manner.
For that purpose it has necessarily got to prevent unauthorised user, pilferage or malpractices by the consumers. Hence the necessary safeguards have to be provided as part of the conditions of supply so that the consumers will be bound by them. While on the one hand, the Board has to recoup the loss suffered by such pilferage or other malpractices., it has also on the other got to stop immediately the continuation thereof. Hence the terms and conditions of supply have to provide for compensation as well as immediate disconnection. For ascertaining the loss and fixing the compensation, uniform procedure has to be framed and a machinery constituted. Clause 3 9 is only doing that. Every consumer is made fully aware of the said terms and he signs the contract only on that basis. He gives an undertaking in that contract that if he is found indulging in any malpractice etc. he shall pay additional charges as may be levied by the Board and that the Board have the right to disconnect supply of electricity to his premises for such period as may be decided by the Board.
28. Learned counsel for the consumers has drawn our attention to Powell v. May, (1946) All E.R. 444 wherein a bye-law made by the local county council was struck down as ultra vires the powers of the council as it was repugnant to the provisions of certain statutes. The· ruling has no application here.
29. Strong reliance is placed on the decision of the Queen's Bench Division in Commissioners of Customs and Excise v. Cure & Deeley Ltd., ( 1961) 3 All E.R. 641. The Commissioners of Customs and Excise were empowered by Section 33 (I) of Finance Act 1940 to make regulations providing G for any matter for which provision 'appears to them necessary" for the purpose of ''giving effect to" the statutory provisions relating to purchase tax '·and of enabling them to discharge their functions thereunder". The Commissioners made the Purchase Tax Regulations 1945. Regulation 12 provided that if any person failed to furnish a return as required by the H regulation the Commissioners might determine the amount of tax appearing to –,. ,… to HYDERABAD VANASPATHI LTD. v. A.P. STATE ELEC. BOARD [SRJNIVASAN, J.I 641 them to be due and demand payment thereof which shall be deemed to be the A proper tax. The Court held that the said Regulation 12 was ultra vires on three grounds : (i) It was no part of the functions assigned to the Commissioners to take on themselves the powers of a High Court Judge and decide issues of fact and law as between the Crown and the subject; (ii) It renders the subject liable to pay such Wx as the Commissioners believed to be due, B whereas the charging sections impose a liability to pay such tax as in law is due" (iii) It was capable of excluding the subject from access to the courts and of defeating pending proceedings.
30. The ruling does not help the consumers in this cas<f. The impugned Clause 3 9 does not suffer from the vices mentioned above. No doubt, Clause C 39.10.6 provides that the order on appeal shall be final subject to Clause 39.11 and not liable to be questioned in any Court of Law. Similarly, Clause 39.11 makes the order of the Chairman or his nominee final not liable to be questioned in any Court of Law. But learned senior counsel for the Board, Mr. Shanti Bhushan, has fairly conceded that the orders are subject to judicial review D and the jurisdiction of Courts cannot be taken away by that Clause. It is to be noted that the trial court and the High Court have in this case upheld the jurisdiction of the civil court to entertain the suit and consider the validity of the orders passed by he Board against the consumers.
31. Reliance is placed on the decision in Indian Express Newspaper E (Bombay) pvt. Ltd. and others etc. etc. v. Union of India & others etc.etc., [1985] l S.C.C. 641, to support the argument that Clause 39 is in breach of the principle of delegated Legislation. According to learned counsel the terms and conditions of supply may tantamount to a subordinate legislation but it must yield to the plenary legislation and that the Supply Act never intended to confer powers on the Board to frame such terms and conditions of supply. F including the power to adjudicate a dispute between itself and the consumer and assess the damages. We have already adverted to the provisions of Section 49 of the Supply Act and pointed out that the power conferred on the Board is not circumscribed by any limitation other than that it should not contravene the provisions of the Act. We are of the opinion that Section 3 9 G is not violative of any provisions of the enactment.
32. InJiyajeerao Cotton A1ills Ltd & Am:, v. Madhya Pradesh Electricity Board & Another, [1989] Supp. 2 S.C.C. 52 the Court held that the Board has powers under Section 49(1) and (3) to levy higher charges for excess consumption of electricity and it is not essential for the Board to make H A regulations ;ndicating the basis for such levy before making the demand.
33. Our attention has been drawn to Agricultural Market Committee v. Shalimar Chemicals Works Ud.. [1997] 5 Supp. S.C.C. 516 in which it has been held that a delegate while making subsidiary rules or regulations cannot widen or restrict the scope or the Act or the policy or principle. The proposition has no application in the present case as we have found that the Board has not in any way violated any of the provisions of the Act by framing the terms and conditions of supply including Clause 39. Hence we reject the contention that Clause 39 is ultra vires the provisions of the Supply Act. C VI. The Electricity Act. 34. lt is vehemently argued that provisions in Clause 39 run counter to the relevant provisions of t11e Electricity Act. In particular, it is said that Clause 39.1 covers the same field as that of ss.21 (4) and 26 (6)(b) and Clause VI(3) oftlle Schedule in the said Act. According to learned counsel malpractice D and pilferage defined in Cl.39 would be covered by the aforesaid provisious of that Act and the autllority to decide the same is the Electrical Inspector appointed by the Government and not the officers of the Board.
It is also argued tllat Clause 39.2 and 39.3 are contrary to Sec.20 of the Act and Clause 3 9. 4 is contrary to Sec. 3 6 of the Act read with Rules 4 to 6 of the Indian E Electricity Rules. According to learned counsel, the entire clause 3 9 is violative of the provisions of Clause VI(I) in the Schedule to the Electricity Act as the latter enjoins on the Board to continue the supply of electricity 'save in so far as prevented by cyclone, floods, storms and other occurrences beyond its control. In short, the contention of the learned counsel for the consumers F is that the procedure prescribed in the Electricity Act and the Rules would apply to all situations arising between the Board and the consumer and the same should be followed. According to him Clause 3 9 is invalid and unenforceable in as much as it deviates from the provisions of tile Electricity Act and the Rules.
35. We are unable to accept any of the aforesaid contentions. We have carefully perused the provisons of the Electricity Act and we find that those provisons provide for· a different situation. Clause 39 will come into play whenever there is malpractice or pilferage on the part of the consumer or a fraud played by the consumer. The Electrical Inspector has no jurisdiction to H deal with those matters. He can be approached only when there is a defective HYDERABAD VANASPAfHl LTD. v. A.P. STATE ELH'. BU.\RD !SRINIVASAN. J.J 643 meter or any defect in wires. fittings. works or apparatus. As regards. Cl. (VI) A of the Schedule lo the Electricity Act. it is not applicable unless distribution mains have been laid down under the provisions of Clause (IV) or Clause (V) and the supply of energy through those mains or any of them has commenced. The provisions of Section 26 of the Supply Act exclude the applicability of Clauses (I) to (V) of the schedule to the Board.
Hence Cl. (VI) of the schedule B cannot by itself apply and that is why the second proviso to Section 26. clarifies the position that the provisions of Clause (VI) of the Schedule shall apply to the Board in respect of that area only where distribution mains have been laid by the B0ard and the supply of energy through any of them has commenced. The records before us do not disclose any pleading on the part c of the consumers that the requirement of the second proviso to Section 26 have been satisfied. No question has been raised in that regard before the trial court. No doubt. the Full Bench of the High Court has placed reliance on Clause (VI) of the Schedule and the grounds raised in the Special Leave Petition filed by the Board do not refer to the same. But in the absence of a specific pleading to that effect it cannot be presumed that Clause (VI) of D the Schedule would apply. Even assuming that clause applies, it will not alter the situation.
The difference or dispute rderred to in sub-cl.(3) of CL(VI) will not cover fraudulent malpractice or pilferage. A perusal of the said sub-clause makes it evident that the matter shall be referred to an Electrical Inspector only in cases of defects mentioned therein and not otherwise. We have no E hesitation to reject the contention of learned counsel for the consumers and hold that the provisions in clause 3 9 do not contravene the provisions of the Electricity Act.
36. In State of UP. and others v. Hindustan Aluminium Corpn. and others, [1979] 3 S.C.C. 229, the Court considered the expression .. regulating" F in Section 22 (b) of the Electricity Act and observed that the word ·'regulate·· does not include prohibition. The ruling has no relevance whatever in the present case. In Andhra Pradesh Carbides Ltd. and another v. Andhra Pradesh State Electricity Board, Ilyderahad and others AIR J 9'S6 Andhra Pradesh 3 7 a Single Judge of the Andhra Pradesh High Court held that · regulations made under the Supply Act shall not be covered by Section 70 G thereof and that Section 49 read with Section 70 of the said Act does not empower the board to make a regulation inconsistent with the provisions of Section 24 of the Electricity Act. The ruling has no bearing in the present case as we have found that Clause 39 of the Terms and Conditions of Supply do not contravene the provisions of either Act 37. In !11.P.E.B. and others v. S111t. Basantihai, [ i 988] (1) S.C.R 890 this Court held that a dispute regarding the commission of fraud in tampering with the meter and breaking the body-seal is one outside the ambit of Section 26(6) of the Electricity Act and an Electrical Inspector has no jurisdiction to decide such cases of fraud. This Court has clearly pointed out that under Section B 26(6) if the dispute is as to whether the meter is or is not correct, it is to be decided by the Electrical Inspector. We arc entirely in agreement with that judgment.
38. In Municipal Corporation of Delhi v. Ajanta iron & Steel Company (Pvt.) Ltd., (1990] 2 S.C.C. 659, this court found that there was a provision C in the agreement between he Delhi Electric Supply Undertaking and the consumer for service of notice as a pre-requisite for disconnection. Hence this Court upheld the decree for mandatory injunction directing restoration of supply of electricity discontinued during the pendency of the suit. without issue of such notice.
39. In MP Electricizv Board, Jabalpur and others f!i?rsus Harsh Wood D Products and Another, (1996] 4 S.C.C. 522, the Court held that Section 24 of the Electricity Act would apply to a case of regular supply made and prior demand of payment of electricity charges and it does not apply to demand on detection of pilferage. The court upheld the validity of similar conditions of supply of electricity and held that on a prima facie conclusion of power- E theft reached by the authorities, it was not necessary to give further hearing to the consumer and the action taken by the Board disconnecting the supply was not violative of Article 20 (I) and 14 of the Constitution and the principles of natural justice. We are in agreement with the view expressed therein.
40. In Belwal Spinning Mills & Ors, v. U.P State Electricify Board and F another, (1997] 6 S.C.C. 740, the Court dealt with the provisions of Sections 26(6) and 26(7) of the Electricity Act alongwith Section 20 thereof. A perusal of the judgment shows that the Bench was of the view that the provisions of Section 26 would apply only when the dispute related to the correctness of the meter. That ruling also supports the contention of the Board in this G case. VII. Article 14, Constitution of India.
41. What remains to be considered is whether Clause 39 is violative of Article 14 of the Constitution of India. Under this head, the argument of learned counsel for consumers is that the provisions in the clause are wholly H unreasonable and against the principles of Natural Justice. According to HYDERABAD VANASPATHI LTD. I'. AP. STATE ELEC. BOARD jSRINIVASAN_ J.j 645 them, the clause enables the officers to disconnect the sen-ice on a suspicion A of malpractice and the consumer has to pay 50% of the provisional assessment amount before gelling it restored. It is also contended that the officials of the Board are enabled to judge its own cause and the doctrine of bias will apply. In support of these contentions, our attention is drawn to : I. J. Mohapatra and Co. and Another v. State of Orissa and .4nothe1; (1984) 4 S.C.C. 103. 2. State of Karnataka v. Shree Rameshwara Rice Mills, Thirthahalli, (1987) 2 S.C.C. 160. 3. Krishna Bus Service Pvt. Ltd. v. State of Haryana and Others, (1985) 3 S.C.C. 711. 4. Rattan Lal Sharma v. Managing Committee, D1'. Hari Ram (Co- education) Higher Secondary School and Others, [1993) 4 S.C.C 10. 5. LIC of India and Another v_ Consumer Education & Research Centre and Others, (1995) 5 S.C.C. 482 None of the ruling will apply in this case. We have already referred to c the judgment of this court in MP Electricity Board, Jabalpur and others v. E Harshwood Products Case II, [1993) 4 S.C.C. 522, wherein it was held that when power theft was found by the officials, immediate disconnection of the supply was not violative of Article 14 of the Constitution and principles of Natural Justice would not apply.
42. In Patel Parshottamdas Vanmalidas, v. Gujarat Electricity Board p and another, AIR (1987) Gujarat 188, a Division Bench of Gujarat High Court considered similar conditions and upheld their validity. The Bench said : "Thus, it is clear that the Beard has formulated such a condition in order to safeguard its interest. Such a condition is there for the purpose of checking, apart from other things, the theft of electricity. G It is not a case of any defective meter, but it is a case of theft of electricity by the consumer concerned. As a matter of fact, in this case it is alleged that the petitioner, by inserting a plastic strip, was able to stop the running of the meter and thereby, committed theft of electricity. The condition clearly states as to the procedure that has H SUPREME C01JRT REPORTS to be adopted for the purpose of questioning the departmental action in levying penal charges. It has also been made clear in the condition as to the limit to ll'hich the Department can go for the purpose of assessing the theft of electricity. In no case the Department can go beyond a period of six 111ont11s, according to this condition. Jn condition c No. 3+. we are able to see that manner of assessment also has been specified. If all these steps are taken by the Department, the condition itself states that the consumer has a remedy by filing an appeal to the appropriate authority within a specified time. Thus, a conjoint reading of this Condition and the purpose for which it is intended, clearly makes out that such a cond;tion is not arbitrary or unreasonable, but within the powers of the Board and, in our opinion, it does not offend any of the Articles of the Constitution. The argument as if the imposition of penal assessment before filing an appeal is harsh and makes the appeal illusory cannot be appreciated. The penal assessment, as we have stated already, is restricted to a limited period. Such an assessment was made after the Department itself was satisfied with regard to the theft or electricity committed by the consumer concerned. Hence, it cannot be said that the appeal provided under Condition No. 34 is an illusory one". We agree with the above opinion.
43. The principle "Nerno Judex in Cause Sua' will not apply in this case as the officers have no personal !is with the consumers. As pointed out by learned senior counsel for the Board, they are similar to Income Tax or Sales Tax Officials. There is nothing wrong in their adjudicating the matter especially F when the consumers may be represented by an advocate and the formula for making provisional assessment is fixed in the clause itself. As argument has been advanced that the Board has recently deleted the provision enabling the consumer to be represented by a power of attorney agent. It is contended that the consumer is thereby deprived of the assistance of an expert which may G be required in technical matters. We do not agree. When the consumer is represented by a lawyer, he can certainly get such assistance as may be needed from a technical expert. It is stated by the Board's learned counsel that the provision was deleted as there was frequent misuse of the same. Whatever may be the reason for deleting the provision, the existing part of the clause enables the consumer to be represented by an advocate. That is sufficient H safeguard for the consumer. HYDERABADVANASPATHILTD. v. AP. STATEELEC. BOARD[SR!N!VASAN, J.] 647
44. Learned counsel for the consumer contends that the agreement with A the Board is in the standard form and signing of the same by the consumer will not prevent him from questioning it. He places reliance on certain observations in Pawan Alloys & Casting Pvt. Ltd., Meerut versus U.P. State Electricity Board and Others, [1997] 7 S.C.C. 251. The qµestion in that case arose on the withdrawal of development rebate to the new industries for a B period of three years. The court held that the principle of promissory estoppel applied on the facts and circumstances of the case and by entering into the standard agreement containing provision for revision of "rate schedule" from time to time, the consumer had not given up his claim for the rebate for a period of three years as per the promise held out by the Board. That case has c no bearing here. VIll. CONCLUSION 45. In the result, we uphold the judgment and decree of the High Court in C.C.C.A.No. 38of1982 and dismiss Civil Appeal No. 2558of1988. We allow D Civil Appeal Nos. 7139 to 7144 of 1997 and set aside the judgment of the Full Bench of the High Court. The Writ Petitions and Writ Appeals shall be disposed of by the High Court in the light of this judgment. The parties will bear their respective costs. M.P. C.A. No. 2558/88 dismissed. C.A. No. 7139-44/97 allowed. E