S.B. Sinha, C.J.
1. Two questions as regard interpretation of the provisions of sub-section (6) of Section 26 of the Indian Electricity Act, 1910 (for short the '1910 Act') vis-a-vis condition Nos.22.1.2 and 22.2.3. in the light of the judgment of the apex Court in Punjab S.E.B. v. Ludhiana Steels Pvt. Ltd, , have been referred to this Bench by a Division Bench (Coram: Bilal Nazki and E. Dharma Rao, JJ.), which are:
1. Whether from the judgment of Supreme Court referred to above (Punjab Stale Electricity Board v. Ludhiana Steels Pvt Ltd. (supra) it can be inferred that the Supreme Court has laid down the law that the words "In the absence of any agreement to the contrary" appearing in subsection (1) of Section 26 control subsection (6) of Section 26 as well?
2. Since the controversy with regard to controlling of sub-section (6) with the words "In the absence of any agreement to the contrary" as found in sub-section (1) of Section 26 was not before the Supreme Court as there was no such agreement between the parties, would the judgment of the Supreme Court be a binding precedent?
2. The petitioner is a public limited company incorporated and registered under the Companies Act, 1956.
3. It is a joint venture company with the A.P. Industrial Development Corporation Limited for manufacturing crockery products. The industry is situate at village Nandigam in the district of Mahabubnagar which is said to be an industrially backward area.
4. The parties have entered into an agreement for supply of high tension electrical energy for a contracted maximum demand of 300 KVA. An inspection was made by the Assistant Divisional Engineer of the respondents on 8-6-1990. Certain defects in the meter were noticed. Based upon the purported findings and recommendations of the said inspecting officer a demand for a sum of Rs.4,12,312.60 ps. was raised by a letter dated 1-8-1990 stating:
As you are aware that the HT meter of service inspected by the Asst. Divisional Engineer/DPE-I/Hyderabad on 8-6-1990 and certain defects were noticed.
Based on the findings and recommendations of said inspecting officer, the following amounts have been assessed for back-billing.
1. Computation of consumption for the period from January, 1989 to June, 1989 @ 2534 units per day. Rs.2,00,895.20
2. Back-billing towards less recording of consumption from 24-6-1989 to 8-6-1990. Rs.2,11,417.40 Total: Rs.4,12,312.60
A bill dated 1-8-1990 for Rs.4,12,312.60 is enclosed herewith. It is requested that arrangements may please be made to pay the bill on or before 16-8-1990 to avoid additional charges besides disconnection of supply.
5. The computation of consumption has been calculated on the following basis :
Energy ought to be billed 4,61,188 units
Energy already billed 2,67,825 units
Energy short billed 1,93,363 units
Demand in KVA ought to
be billed 1770 KVA
Demand already billed 1185 KVA
Demand short billed 585 KVA
6. Percentage of error in the KVH meter is said to have been calculated at 31.8% and as regards the back-billing it is stated:
Energy already billed
from 24-6-1989 to 8-6-90 6,46,770 units
Energy short billed
@ 31.8% 2,05,672 units
Energy assessed to be
billed 8,52,442 units
7. The petitioner contends that an inspection was made behind its back. It denied and disputed the claim of the respondents by a letter dated 14-8-1990 stating:
You have vide your above claimed that the meter was defective and that it is recording less than the actual consumption you have also sent a supplementary bill from Jan., 1989 to June, 1990 asking us to pay Rs.4,12,312.60 towards low recording.
We have verified our records as far as they are available we are enclosing a statement showing the power consumption and the records maintained by us.
You will observe from the statements and the records that your claim is not correct. The power consumption per ton of production after your supposed correction on 8-6-1990 and before that is more or less the same.
Hence, we request you to kindly go through our records and waive the amount charged vide your bill dated 1-8-1990.
8. As the request made in the aforementioned letter by the petitioner was not acceded to, it filed writ petition praying for issuance of an appropriate writ quashing the supplementary bill dated 1-9-1990 from the period January, 1989 to 8-6-1990.
9. Before the Division Bench a contention was raised that in a situation of this nature the respondents-Corporation could only take recourse to the provisions of sub-section (6) of Section 26 of the 1910 Act. The respondents contended that the issue is no longer res integra in view of the decision of a single Bench of this Court as also a Division Bench of this Court in Writ Appeal No.1118 of 1994, dated 18-4-1996 wherein the learned Judges upon considering the decision of the Apex Court in Punjab Stale Electricity Board (supra) observed:
As per the facts of this case, the meter was taken by the Electricity Board for two times. When the meter was taken by the Electricity Board for the first time, a notice was issued to the appellant stating that the meter will be checked on 27-10-1993 but the appellant did not attend on that date and the Board got the meter checked and found defective. Similarly, second time the Board got the meter checked in the presence of the appellant and then also the defect was found in the meter. Therefore, demand notice was issued to the appellant. The contention of the appellant is that when the Board finds that the meter is defective or not functioning properly, it has to refer the meter to the Electrical Inspector as per Section 26(6) of the Act and it has no power to get the meter checked and on that basis issue a demand notice. In this connection, it is relevant to extract Section 26(6) of the Act, which reads as follows:
The above provision of the Act provides that where there is any difference or dispute as to whether the meter is correct or not, the meter has to be referred to Electrical Inspector and the matter will be decided on an application by either party. When the Electrical Inspector finds that the meter is ceased to be correct, he has to estimate the amount of the energy supplied to the consumer or the electrical quantity contained in the supply during such time not exceeding six months and then the consumer is liable to pay the said amount. Section 26(1) of the Act lays down the circumstances where Section 26(6) of the Act is not applicable. It is relevant to extract Section 26(1) of the Act and it reads as follows:
A reading of the above provision makes it clear that where there is an agreement between the parties, the provisions of Section 26(6) of the Act do not apply. In the present case, condition No.22.3.3 provides the procedure for arriving at consumption when the meter is defective and under the said condition the Board is empowered to find out whether the meter is defective or not and also estimate the amount of the power supplied which escaped from the meter reading and then make demand for such supply by way of bill. Thus, there is a specific agreement between the parties. Therefore, when there is a specific agreement between the parties, Section 26(6) of the Act will not apply. Our view is fortified with the view expressed by the Supreme Court in Punjab State Electricity Board v. Ludhiana Steels Private Limited....
10. As regards the value of precedent, the Division Bench also referred to a decision of the apex Court in Arnit Das v. State of Bihar, .
11. Mr. B. Adinarayana Rao, the learned Counsel appearing on behalf of the petitioner, submitted that the 'agreement' referred to in sub-section (1) and sub-sections (6) and (7) of Section 26 of the 1910 Act contemplate different situations. The learned Counsel has taken us through the entirety of Section 26 and submitted that the words "In the absence of an agreement to the contrary" have been used in different context in different sub-sections and thus the agreement referred to in sub-section (1) of Section 26 does not control sub-section (6) thereof. The right of the parties, according to the learned Counsel, under sub-section (6) of Section 26 cannot be taken away by reason of any regulation. In support of the said contention reference has been made to MPEB v. Basantibai, , Bihar State Electricity Board v. Parmeshwar Kumar Agarwala, , Belwal Spinning Mills Ltd v. U.P. State Electricity Board, . Terms of supply as specified in B.P. Ms. No.690, dated 17-9-1975, Mr. Adinarayana Rao would contend, cannot override the statutory remedy contained in sub-section (6) of Section 26 of 1910 Act. Our attention has also been drawn to the decision of this Court in M.V. Krishnaiah v. Govt. of A.P., AIR 2000 AP 12 (FB).
12. Mr. N. Subba Reddy, the learned senior Counsel appearing on behalf of the respondents, on the other hand, raised three different and alternative submissions before us. The learned Counsel would firstly contend that the terms and conditions of supply having been laid down in terms of Section 49 of the Electricity (Supply) Act, 1948 (for short 'the 1948 Act') the same would override the provisions of subsection (6) of Section 26 of 1910 Act. The learned Counsel would urge that the provisions of the 1948 Act and the terms and conditions framed thereunder have an overriding effect in terms of Section 70 of the 1948 Act.
13. Installation of a meter provided for under Section 26 of 1910 Act, contends the learned Counsel, would embrace within its fold installation of a defective meter and thus an agreement to the contrary having been provided under the conditions of supply, sub-section (6) of Section 26 of 1910 Act shall have no application. Strong reliance in this connection has been placed on Hyderabad Vanaspathi Ltd v. A.P. State Electricity Board, , decision of a Division Bench of this Court in Writ Appeal No.1118 of 1994, Writ Petition Nos.16104 of 1993 and 13930 of 1998 as also on Punjab SEB (supra). The learned Counsel would also contend that in any event, the petitioner must be held to have waived its right as it has not referred the dispute in terms of proviso appended to sub-section (6) of Section 26 of the 1910 Act. The learned Counsel would lastly contend that the petitioner may even now refer the dispute to the Electrical Inspector in terms of sub-section (6) of Section 26 of the 1910 Act.
Section 26 of the 1910 Act reads thus:
(1) In the absence of an agreement to the contrary, the amount of energy supplied to a consumer or the electrical quantity contained in the supply shall be ascertained by means of a correct meter, and the licensee shall, if required by the consumer, cause the consumer to be supplied with such a meter :
Provided that the licensee may require the consumer to give him security for the price of a meter and enter into an agreement for the hire thereof, unless the consumer elects to purchase a meter.
(2) Where the consumer so enters into an agreement for the hire of a meter, the licensee shall keep the meter correct, and, in default of his doing so, the consumer shall, for so long as the default continues, cease to be liable to pay for the hire of the meter.
(3) Where the meter is the property of the consumer, he shall keep the meter correct, and, in default of his doing so, the licensee may, after giving him seven day's notice, for so long as the default continues, cease to supply energy through the meter.
(4) The licensee or any person duly authorised by the licensee shall, at any reasonable time and on informing the consumer of his intention, have access to, and be at liberty to inspect and test, and for that purpose, if he thinks fit, take off and remove, any meter referred to in sub-section (1); and, except where the meter is so hired as aforesaid, all reasonable expenses of, and incidental to, such inspecting, testing, taking off and removing shall, if the meter is found to be otherwise than correct, be recovered from the consumer; and, where any difference or dispute arises as to the amount of such reasonable expenses, the matter shall be referred to an Electrical Inspector, and the decision of such Inspector shall be final :
Provided that the licensee shall not be at liberty to take off or remove any such meter if any difference or dispute of the nature described in sub-section (6) has arisen until the matter has been determined as therein provided.
(5) A consumer shall not connect any meter referred to in sub-section (1) with any electric supply-line through which energy is supplied by a licensee, or disconnect the same from any such electric supply-line, but he may by giving not less than forty-eight hours' notice in writing to the licensee require the licensee to connect or disconnect such meter and on receipt of any such requisition the licensee shall comply with it within the period of the notice.
(6) Where any difference or dispute arises as to whether any meter referred to in sub-section (1) is or is not correct, the matter shall be decided, upon the application of either party, by an Electrical Inspector; and where the meter has, in the opinion of such Inspector ceased to be correct, such Inspector shall estimate the amount of the energy supplied to the consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct; but save as aforesaid, the register of the meter shall, in the absence of fraud, be conclusive proof of such amount or quantity:
Provided that before either a licensee or a consumer applies to the Electrical Inspector under this sub-section, he shall give to the other party not less than seven days' notice of his intention so to do.
(7) In addition to any meter which may be placed upon the premises of a consumer in pursuance of the provisions of sub-section (1) the licensee may place upon such premises such meter, maximum demand indicator or other apparatus as he may think fit for the purpose of ascertaining or regulating either the amount of energy supplied to the consumer, of the number of hours during which the supply is given, or the rate per unit of time at which energy is supplied to the consumer, or any other quantity or time connected with the supply:
Provided that the meter, indicator or apparatus shall not, in the absence of an agreement to the contrary, be placed otherwise than between the distributing mains of the licensee and any meter referred to in sub-section (1);
Provided, also, that where the charges for the supply of energy depend wholly or partly upon the reading or indication of any such meter, indicator or apparatus as aforesaid, the licensee shall, in the absence of an agreement to the contrary, keep the meter, indicator or apparatus correct; and the provisions of sub-sections (4), (5) and (6) shall in that case apply as though the meter, indicator or apparatus where a meter referred to in sub-section (1).
Explanation :--A meter shall be deemed to be "correct" if it registers the amount of energy supplied, or the electrical quantity contained in the supply, within the prescribed limits of error," and a maximum demand indicator or other apparatus referred to in sub-section (7) shall be deemed to be "correct" if it complies with such conditions as may be prescribed in the case of any such indicator or other apparatus.
14. Sub-sections (5) and (6) have been amended by Amending Act of 1959 the original provisions whereof were in the following terms:
(5) A consumer shall not connect any meter referred to in sub-section (1) with any electric supply line through which energy is supplied by a licensee, or disconnect the same from any such electric supply line, without giving to the licensee not less than forty eight hours' notice in writing of his intention.
(6) Where any difference or disputes arises as to whether any meter referred to in sub-section (1) is or is not correct, the matter shall be decided upon the application of either party, by an Electrical Inspector, or a competent person specially appointed by the State Government in this behalf; and, where the meter has, in the opinion of such Inspector or person, ceased to be correct, such Inspector or person shall estimate the amount of the energy supplied to the consumer or the electrical quantity contained in the supply, during such time as the meter shall not, in the opinion of such Inspector or person, have been correct; and where the matter has been decided by any person other than the Electrical inspector, an appeal shall lie to the Inspector, whose decision shall in every case be final; but save as aforesaid, the register of the meter shall, in the absence of fraud, be conclusive proof of such amount or quantity.
15. Section 26 provides for the measurement of the amount of energy supplied by the licensee to the consumer. Such measurement is necessary for levying charges under any of the methods provided for by sub-section (3) of Section 23 of the 1910 Act.
16. Sub-section (1) of Section 26 lays down that where there is no agreement to the contrary the amount of energy supplied by licensee to the consumer shall be measured by means of a correct meter. The said sub-section puts liability on the licensee not only to supply a meter but a correct meter. The expression "In the absence of an agreement to the contrary" refers to the mode of charging otherwise than by measurement of units of energy supplied.
17. The scheme of Section 26 is that if the meter supplied by the agency or caused to be supplied by it not only shall be a correct meter but also shall be kept correct by the licensee. The explanation appended to sub-section (7) creates a legal fiction as regards correctness of a meter if it registers the amount of energy supplied over the electrical quantity contained in the supply.
18. In this connection it is relevant to note Rule 57 of the Indian Electricity Rules, 1956 which reads thus:
Meters, maximum demand indicators and other apparatus on consumer's premises :--(1) Any meter or maximum demand indicator or other apparatus placed upon a consumer's premises in accordance with Section 26 shall be of appropriate capacity and shall be deemed to be correct if its limits of error are within the limits specified in the relevant Indian Standard Specification and where no such specification exists, the limits of error do not exceed 3 per cent above or below absolute accuracy at all loads in excess of one-tenth of full load and up to full load,
(2) No meter shall register at no load.
(3) Every supplier shall provide and maintain in proper condition such suitable apparatus as may be prescribed or approved by the Inspector for the examination, testing and regulation of meters used or intended to because in connection with the supply of energy :
Provided that the supplier may with the approval of the Inspector and shall, if required by the Inspector, enter into a joint arrangement with any other supplier for the purpose aforesaid.
(4) Every supplier shall examine, test and regulate all meters, maximum demand indicators and other apparatus for ascertaining the amount of energy supplied before their first installation at the consumer's premises and at such other intervals as may be directed by the State Government in this behalf.
(5) Every supplier shall maintain a register of meters showing the date of the last test, the error recorded that the time of the test, the limit of accuracy after adjustment and final test, the date of installation, withdrawal, reinstallation, etc., for the examination of the Inspector or his authorised representative.
(6) Where the supplier has failed to examine, test and regulate the meters and keep records thereof as aforesaid, the Inspector may cause such meters to be tested and sealed at the cost of the owner of the meters in case it is found defective.
19. The rule prescribes the efficiency required of measuring instrument and lays down that all such instruments supplied by the licensee shall have such efficiency and be maintained at the required efficiency by initial tests and tests carried out from time to time. It also contemplates maintenance of a register wherein the result of periodical tests shall be noted for inspection of the Inspector. The meter may be hired by the consumer or sold to him. Sub-section (2) of Section 26 of the 1910 Act requires that the licensee shall keep the meter correct. If it does not do so, the consumer would not be bound to pay the meter rent. 'Meter rent' is also 'dues' within the meaning of Section 24 of the 1910 Act.
20. For the purpose of maintenance of meter and/for faking the readings as regards consumers of electrical energy registered therein in terms of sub-section (4) a licensee or any person duly authorised is empowered to enter at any reasonable time and upon informing the consumer of his inspection, the premises for the purpose of testing and inspecting the meter and is also empowered to take it out for the said purpose. In this case we are not concerned with the rights and obligations of the consumer when the meter was installed by him.
21. The liability of the licensee thus is to maintain, test and inspect meter when if is his property or otherwise. In the event the meter does not belong to the licensee the expenses for such inspection, testing, etc., would be borne by the consumer. Normally, an inspection of meter should be a joint inspection as has been held by the Karnataka High Court in Sri Krishnarajendra Mills Ltd. v. Chairman, Karnataka Electricity Board, . Reference to the Inspector is provided for both under sub-sections (4) and (6) of the 1910 Act.
22. The Apex Court in MPEB v. Basantibai (supra) had the occasion to consider the decisions of the High Court in Gadag Betgiri v. Govt. of Mysore, AIR 1962 Mys. 209, M.P. Electricity Board, Jabalpur v. Chhaganlal, and held:
It is evident from the provisions of this section that a dispute as to whether any meter referred to in sub-section (1) is or is not correct has to be decided by the Electrical Inspector upon application made by either of the parties. It is for the Inspector to determine whether the meter is correct or not and in case the Inspector is of the opinion that the meter is not correct he shall estimate the amount of energy supplied to the consumer or the electrical quantity contained in the supply during a period not exceeding six months and direct the consumer to pay the same. If there is an allegation of fraud committed by the consumer in tampering with the meter or manipulating the supply line or breaking the body seal of the meter resulting in not registering the amount of energy supplied to the consumer or the electrical quantity contained in the supply, such a dispute does not fall within the purview of subsection (6) of Section 26. Such a dispute regarding the commission of fraud in tampering with the meter and breaking the body seal is outside the ambit of Section 26(6) of the said Act. An Electrical Inspector has, therefore, no jurisdiction to decide such cases of fraud. It is only the dispute as to whether the meter is/is not correct or it is inherently defective or faulty not recording correctly the electricity consumed, that can be decided by the Electrical Inspector under the provisions of the said Act.
23. Therein also one phase of the meter had not been working and thus a dispute had arisen.
24. The conditions of supply of electrical energy are governed by the provisions of the 1910 Act and the schedule appended thereto subject, of course, to the provisions of the 1948 Act and the conditions of supply prescribed therein. The conditions of supply subject to the statutory provisions determine the rights and obligations of the parties. The rights and obligations of the parties under the agreement are subject to the provisions of the Act.
25. Electricity is not a luxury. It is a basic necessity. The respondent is State within the meaning of Article 12 of the Constitution of India. It is a public utility concern. It enjoys a monopoly. In absence of electricity the industries cannot be run and business cannot be carried out.
26. The provisions of Section 26 and in particular sub-section (4) have to be read along with sub-sections (1), (2) and (3) wherefrom it would appear that the inspection and test are to be conducted for verifying whether the meter is faulty or not. Inspection and test of a meter are required to be carried out for the purposes mentioned therein and the costs therefor are to be borne by the consumer. An inspection or testing may be necessary with a view to remove the meter for the purpose of checking the correctness thereof by the Electrical Inspector on the application of either party as provided under sub-section (6) of Section 26 of the 1910 Act, Sub-section (6) of Section 26 of the 1910 Act although has a limited role to play, it provides for adjudication of a dispute by an independent agency. Fraud does not come within the purview of sub-section (6) of Section 26 of the 1910 Act. The jurisdiction of the Electrical Inspector also arises in relation to a dispute falling under Sections 24(2), 26(4), 33(2), 37(2)(i),(j) and (k), 50, 55 of the 1910 Act and clauses 6,13,15, 16 and 17 of the Schedule appended to the Indian Electricity Rules, 1956 as also Rules 4 to 10 of the said rules.
Section 26 of the 1948 Act reads thus:
Board to have powers and obligations of licensee under Act 9 of 1910:--Subject to the provisions of this Act, the Board shall, in respect of the whole State, have all the powers and obligations of a licensee under the Indian Electricity Act, 1910 (9 of 1910), and this Act shall be deemed to be the licence of the Board for the purposes of this Act:
Provided that nothing in Sections 3 to 11, sub-section (2) and (3) of Section 21 and Section 22, sub-section (2) of Section 22-A and Sections 23 and 27 of that Act or in Clauses I to V, clause VII and clauses IX to XIII of the schedule to that Act relating to the duties and obligations of a licensee shall apply to the Board :
Provided further that the provisions of clause VI of the schedule to that Act shall apply to the Board in respect of that area only where distribution mains have been laid by the Board and the supply of energy through any of them has commenced.
The aforementioned provision would clearly show that by reason of a legal fiction created, the Board is also a licensee within the meaning of 1910 Act.
In East end dwellings Co., Ltd. v. Finsbury Borough Council, 1951 (2) All.ER 587 Lord Asquith J., laid down the law in the following terms:
If one is bidden to treat an imaginary state of affairs as real, one must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that one must imagine a certain state of affairs. It does not say that, having done so, one must cause or permit one's imagination to boggle when it comes to the inevitable corollaries of that state of affairs. As some of my noble and learned friends have pointed out, if Parliament had intended the meaning contended for by the respondents, nothing would have been easier than to provide that the value should be assessed as if no war damage had occurred. Even, however, if the meaning of the words to be construed were not plain and the "policy" of the legislation could legitimately be invoked as an interpretative factor, I am far from subscribing to the view that the policy in question is that for which the respondents contend, or that its importation would produce the result which they desire.
27. A legal fiction as is well known is of wide amplitude.
28. The supply of electrical energy is a matter of contract by and between the Board and the consumer.
29. Section 26 of the 1910 Act, by reason of Section 26 of the 1948 Act would be deemed to be incorporated in the latter and is a part of the 1948 Act. The respondent being a deemed licensee within the meaning of 1948 Act, is also bound by the provisions thereof.
30. The power to make rules has been provided for under Section 78 in terms whereof apart from the illustrations given under sub-section (2), rules can be made to give effect to the provisions of the Act. Section 79 confers power upon the Board to make regulations which would not be inconsistent with the Act and the rules made thereunder, to provide for the matters enumerated therein. Any conditions of supply made in terms of Section 49 of the 1948 Act are subject to the other provisions of the said Act and the rules made thereunder.
31. Terms and conditions of supply made under Section 49 of the Act which principally empowers it to frame uniform tariffs, cannot be held to be extended to such conditions which would be violative of Section 26(6) of the 1910 Act. Back billing by adoption of method of average consumptions is not permissible where the meter had recorded the reading reflecting the actual consumption of energy and entries had been made by the meter reader regularly every month prior to the date of alleged test checking. [See Sri Krishnarajendra Mills Ltd. v. Chairman, Karnataka Stale Electricity Board, AIR 1991 Kant 347]. In Vishnu Rerolling Mills v. Bihar State Electricity Board, 1986 BLJR 1131, a resolution made at a meeting of the General Manager-cum-Chief Engineer that assessment would be made on the basis of the load factor was held to be amounting to amendment of tariff and the demand on that basis was not held to be valid.
32. The Bihar State Electricity Board thereafter made a regulation in that regard. In Parmeshwar Kumar Agarwala v. Bihar State Electricity Board, , it was held that when the meter became
defective the matter had to be referred to the Electrical Inspector. The said decision has been upheld by the Apex Court in Bihar State Electricity Board v. Parmeshwar Kumar Agarwala (supra). In the said case, referring to Basantibai (supra) a notification introducing an unknown mode of charging of energy which was inconsistent with the terms and conditions of the agreement between the Board and the consumer was held to be not sustainable and not protected under Section 70 of the 1948 Act. The Apex Court clearly held:
The notification having been issued in exercise of powers under Sections 46 and 49 of the 1948 Act, the learned Counsel first referred us to Section 70 of this Act, which is on the subject of "Effect of other taws". In sub-section (1) of this section, it has been stated that no provision of the Indian Electricity Act, 1910 or of any rules made thereunder, shall have any effect, so far as it is inconsistent with any of the provisions of 1948 Act. It was, therefore, urged that in case of conflict between the two statutes, namely, 1910 and 1948 Acts, the provision contained in the latter shall prevail. This legal position cannot assist the Board, as what has been provided in Section 70 cannot protect the notification, because the same is not a part of the provision of the 1948 Act, but has been issued with the aid of the provision of this Act.
This takes us to the main objection of the High Court to the notification which is that it is inconsistent with the terms and conditions of the agreement entered into between the Board and the consumers. The submission of Shri Sibal on this facet of the case was that clause 11 of the agreement, read with clause 14, permits the Board to vary the conditions which find place in clauses 3(c) and 6, which are the two clauses said to have been violated by the notification.
33. The Apex Court in the said decision referred to various statutory conditions.
34. The Apex Court clearly held that although the object may be laudable but by reason of a similar provision an unknown mode of charging for energy which is not visualised by the agreement entered into between the parties and which would not be consistent with clauses 3(c) and 6, clause (16) of the notification must be held to be illegal. Referring to Basantibai (supra) it held that Section 26(6) does not authorise the Electricity Board to issue any supplementary bill in respect of the electricity consumption during the pendency of the dispute with the Electrical Inspector and issuance of supplementary bill was held to be bad. This aspect of the matter has also been considered in Belwel Spinning Mills Ltd. v. U.P. State Electricity Board (supra). It has been held therein:
After giving our careful consideration to the facts and circumstances of the cases in these appeals and the submissions made by Mr. Gupta, Mr. Sen and Mr. Andhyarujina, the learned Solicitor-General, it appears to us that Section 20 of the Electricity Act authorises the licensee to enter the premises of the consumer to remove fittings and other apparatus installed by the licensee. Clause (a) of sub-section (1) of Section 20 authorises the licensee to enter the premises of the consumer for "inspecting, testing, repairing or altering the electric supply lines, meters, fittings, works and apparatus for the supply of energy belonging to the licensee". The licensee, therefore, cannot only enter the premises of the consumer for inspecting, testing etc., but the licensee can also alter the meter whenever such alteration is needed. Such power under Section 20 does not depend on the adjudication of correctness of the meter and other apparatus by the Electrical Inspector on a reference under Section 26(6) of the Electricity Act, But such power flows from the statutory duties and functions of the licensee to maintain the correct meter for recording the quantum of electricity supplied to the consumer. Such duty to ensure maintenance of correct meter in the premises of the consumer has been indicated in sub-section (1) and subsection (2) of Section 26. The power of removing the meter under Section 20, however, is circumscribed by the proviso to sub-section (4) of Section 26 only when the dispute as to the functioning of the meter has been referred to the Electrical Inspector under sub-section (6) of Section 26. A licensee is authorised under sub-section (7) of Section 26 to place, in addition to the meter installed in the premises of the consumer as referred to in sub-section (1) of Section 26, other meter or apparatus as the licensee deems fit for the purpose of recording or regulating the amount of energy supplied to the consumer. Such duty to ensure maintenance of correct meter in the premises of the consumer has been indicated in sub-section (1) and sub-section (2) of Section 26, The power of removing the meter under Section 20, however, is circumscribed by the proviso to sub-section (4) of Section 26 only when the dispute as to the functioning of the meter has been referred to the Electrical Inspector under sub-section (6) of Section 26. A licensee is authorised under sub-section (7) of Section 26 to place, in addition to the meter installed in the premises of the consumer as referred to in sub-section (1) of Section 26, other meter or apparatus as the licensee deems fit for the purpose of recording or regulating the amount of energy supplied to the consumer. Such power also does not depend on the existence of any dispute as to the correctness of the meter installed.
Check meter is usually installed for the purpose of checking and ascertaining the proper functioning of the installed meter but there is no legal bar for treating the check meter as an altered meter in place of the meter installed earlier when on checking the meter the licensee has found it to be defective. Such power of installing the meter, replacing it by another meter is also independent of existence of any dispute between the consumer and the licensee.
The expression "check meter" has no special significance or legal incidence for which there is a bar that check meter cannot be treated as an altered meter if the licensee intends to replace the defective meter by the check meter. It will be open to the Electrical Inspector to ascertain the correctness of the check meter along with the disputed meter when dispute is referred for adjudication by the Electrical Inspector and the licensee founds its case with reference to check meter. Prior to the amendment of Section 26(6) of the Electricity Act, the Electrical Inspector or the competent person specially appointed by the State Government in this behalf, had a statutory duty to first determine whether the meter in question was defective and thereafter to estimate the quantity of the electricity consumed during such time as the meter in the opinion of the Electrical Inspector or the competent person "shall not have been correct". After the amendment of sub-section (6) of Section 26, the Electrical Inspector is the only statutory authority to decide the dispute about the correctness of the metre, if such dispute is raised by either of the parties. If the Electrical Inspector on a reference comes to the finding that the meter has ceased to be correct, the said Inspector has a statutory duty to "estimate the amount of the energy supplied to the consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct.
35. In M/s. Ganges Manufacturing Co. Ltd v. West Bengal State Electricity Board, 1993 (2) Cal LJ 210, a learned single Judge of the Calcutta High Court held that so long as the bills are raised on the basis of the reading of a meter, correct or otherwise, no further question arises and the consumer is bound to pay the amount of the bill raised in accordance with the reading of the meter subject to the provisions of sub-section (6) of Section 26 of the Indian Electricity Act. The learned Judge observed:
It is once again made clear that Court does not say that a licensee is not entitled to realise its past dues for under charging a consumer but ail that this Court says is that such dues are to be realised through a procedure established by law and by taking recourse to legal proceedings. Only in such a way the consumer is protected from the vagaries and arbitrariness of a licensee.
36. Yet, recently in Shamim Ashraf v. The Bihar State Electricity Board and others, 2001 (1) BLJ 109, the Patna High Court has held that when the defect in the meter has been pointed out, a fresh demand on the basis of average consumption till the replacement of new meter is not permissible and the consumer cannot be compelled to deposit the raised amount of bills. Various aspects to such disputes have been considered by different High Courts [See Kamla Shanker Upadhya v. State Electricity Board, , Hamidullah Khan v. Chairman, M.P. Electricity Board, 1982 MP LJ 623, H.D. Shourie v. Delhi Municipal Corpn., ].
37. In Bharat Barrel and Drugs Manufacturing Co., Private Limited v. Municipal Corporation of Greater Bombay, , it was held that dispute as to the amount due in case the meter is not correct is not left to be decided in the arbitrary discretion of either party. It must be decided on reference under Section 26(6) by the Electrical Inspector. If having regard to all these circumstances the legislation had thought it expedient not to vest power even in the Electrical Inspector who is an expert to determine that the meter was defective for a period of more than six months, obviously neither the licensee nor the consumer could be deemed to have that right. In CESC v. Shankar Rubber Industries, 1997 (1) CRN 272, upon considering the provisions of Section 26, 57 and clause (vi) of the schedule appended to the Indian Electricity Act as also the provisions of the Indian Electricity Rules, it was observed:
........ There cannot be any doubt whatsoever that the appellant being a licensee is required to raise bills on consumption of electrical energy in terms of the provisions of the tariff, as also in accordance with the statutory provisions referred to hereinbefore. The consumption of electrical energy admittedly has to be recorded through a correct meter, as is contemplated under Section 26 of the Indian Electricity Act. In this case, admittedly, three meters had . been installed. Section 26 of the Indian Electricity Act merely speaks of installation of a correct meter through which the consumption of electrical energy to the premises of a consumer by the licensee is required to be ascertained .....
38. In Suryamukhi Enterprises v. APSEB, (DB), a
Division Bench of this Court held:
In the present case, we find that inspite of Section 26(6) of the Act and Condition No.22.3.3 of the Terms and Conditions of Supply of Electrical Energy by the Andhra Pradesh State Electricity Board ('the Conditions' for short), the respondents had not taken immediate steps on the complaint made by the petitioner by the two letters dated 2-7-1990 and 25-8-1990 complaining about the malfunctioning of the meters and requesting for testing of the same and replacing, if need be. Even after the petitioner approached this Court by way of the present writ petition, the respondents have not filed any counter-affidavits till 1997. No doubt, the meters Were changed as per what is stated now in the counter-affidavit filed by the 3rd respondent on 30-5-1991 and the meters replaced were sent for testing to the MR and it was found that the complaints made on behalf of the petitioner were justified. Even after that, the respondents had not come forward to make appropriate corrections which they have now proposed. They had also not informed the petitioner of the findings of the MRT reports. Sub-section (2) of Section 26 of the Act clearly provides that "where the consumer so enters into an agreement for hire of a meter, the licensee shall keep the meter correct, and and in default of his doing so, the consumer shall for so long as the default continues, cease to be liable to pay for hire of the meter". Condition No.22.2.1 of the conditions also provides that "the electricity supplied to a consumer shall be ascertained by means of correct meter which shall be hired by the Board and (he Board shall keep the meter correct. This is a condition made by the Board itself in exercise of its power under Section 49 of the Electricity (Supply) Act, 1948. This condition imposes the duty on the Board to keep the meter correct. Condition No.22.2.2 also requires that once in every year the HT meter shall be recalibrated and standardised, if so desired by either the consumer or the Board by means of Standard Instrument, by the Board in the presence of the consumer or his representative provided however that the Board may conduct test check of meters (HT as well as LT) at intervals of six months or such other period as the Board may consider it necessary".
This condition imposes a duty on the Board to see that the meters are corrected at least every six months by conducting test checks. Condition No.22.2.3 also provides that "the consumer shall be entitled on application to the Board's Engineer of the area to have special test of the meter carried out any time and the expenses of such test shall be borne by the Board or the consumer according to the meter is found to be defective or correct as a result of such a test; such meter shall be deemed to be correct if the limits of error do not exceed those laid down in the Indian Electricity Rules, 1956". As per this condition, it is incumbent on the Board's Engineers to have a special test of the meter carried out any time the consumer requires the same to be done. In the present case, it is not disputed by the respondents that the petitioner addressed letter dated 2-7-1990 and 25-8-1990 requesting that the two meters installed for its service connections to be tested and if need be, replaced. Inspite of that, the respondents have not moved in the matter and surprisingly we find that they complained that the petitioner had approached this Court on 24-9-1990 without giving them adequate time - it is incredible that the respondents found two months time not adequate in a matter like this.
39. The said writ petition was allowed with a direction to repay a sum of Rs.45,000/-with costs.
40. In terms of Rule 27 of the Indian Electricity Rules, 1956 model conditions of supply to consumer have been framed but the same do not have any statutory force.
41. Section 78 of the 1948 Act enables the Government to frame rules to give effect to the provisions of the Act. Section 79 empowers the Board to make, regulation not inconsistent with the Act and the rules made thereunder to provide for all or any of the matters set out therein. Section 79-A provides that every rule made by the State Government under Section 78 and every regulation made by the Board under Section 79 shall be laid as soon as may be before the State Legislature. The conditions of contract may be statutory but such contract must be consistent with and not in derogation of the statutory right provided under the statute. In a case of this nature, it cannot also, be contended that provisions of the 1948 Act being special in nature the same shall override the provisions contained in 1910 Act as has been held by the Apex Court in Parmeshwar Kumar Agarwala (supra). Section 26 of 1910 Act would be deemed to be incorporated in the 1948 Act. Rights and obligations of the parties under 1910 Act are available to them also in terms of 1948 Act. No law, regulation or bye-law thus could be made in derogation of the provisions of the 1910 Act. Furthermore, the provisions contained in 22.2.3 and 22.2.1 provide for a different procedure. It provides for a different forum whereas in terms of Section 26 an independent statutory forum has been created which can adjudicate upon a dispute not only under Section 26(6) but also as noticed hereinbefore under various provisions thereof. Futhermore, an appeal there against has been provided under Section 36(2) of the Act before the State Government. Such an independent Tribunal cannot be permitted to be substituted by a domestic Tribunal manned by an Executive Engineer who may be a party to the inspection and appeal there against before a Chief Engineer of the Board.
42. By reason of a unilateral act or otherwise of the authorities of the respondents, the petitioner shall suffer civil consequences. It may particularly suffer disconnection of electrical energy if a huge bill is raised and it is directed to pay the same.
43. The law nowhere contemplates that by reason of such a condition of contract, a statutory right of the consumer would be taken away". Issuance of an inflated bill and resultant disconnection of electrical energy has serious civil consequences. If such bill cannot be paid, the industry shall be closed which will have a wider repercussion.
44. The matter would be different if an allegation of theft or pilferage of electrical energy is made. Where fraud is alleged, the provisions of Section 26(6) of the 1910 Act shall not apply. But where there is no such allegation, we cannot countenance that when the meter has been supplied by the licensee and it is a contractual/statutory duty to keep the same correct, and furthermore the same is to be checked periodically, it is axiomatic that if it fails and/or neglects to perform its duties, the consumer cannot be deprived of a statutory right and saddled with a bill by reason of a condition which is beyond the scope and purview of the 1910 Act. The respondent-Board is thus bound thereby as the conditions, having regard to the decision of the Apex Court in Parmeshwar Kumar Agarwala (supra) would be contrary to Section 49 vis-a-vis Section 26 of the 1910 Act. The action of the respondent is also not protected under Section 70 of the 1948 Act.
45. The Full Bench of this Court in M.V. Krishnaiah v. Govt of A.P. (supra) distinguished Basantibai (supra) on the ground that therein no dispute arose as regards functioning of the meter but only in respect of mode of calculation. The Full Bench, therefore, has recognised that when there exists a dispute as regards correctness or otherwise of the meter, Section 26(6) shall apply.
46. Section 26(6) of the 1910 Act provides for an independent forum. The decision of the Electrical Inspector is conclusive. The right is a statutory right one. It also provides for an appeal. A deemed licensee is also bound by the conditions of licence unless the same are repugnant to the provisions of the 1948 Act or the rules framed thereunder. The regulations made by the 1st respondent herein have statutory flavour but the same must yield to the provisions of the Act and the regulations. In one sense it is in the nature of bye-laws.
47. A delegated legislation is bound by the terms of delegated or derived authority and thus the rules or the regulations made would not be given effect to unless the Court is satisfied that all the conditions precedent to the validity of the rules have been fulfilled. Delegated legislation falls under two main headings: Statutory instruments, bye-laws or regulations made (i) by authorities concerned with local Government; (ii) by public corporations or societies clothed with statutory or common law powers. The regulations made by the 1st respondent are thus akin to the bye-laws. On five grounds bye-laws may be treated as ultra vires.
(a) That they are not made, sanctioned and published in the manner prescribed by the statute which authorises the making of them.
(b) That they are repugnant to the laws of the country.
(c) That they are repugnant to the statute under which they are made.
(d) That they are uncertain.
(e) That they are unreasonable.
48. A bye-law to be valid must be legi fidel, rationi consona which means in conformity with the law and consonant with reason.
49. The decisions of this Court to the contrary having been rendered without noticing the Full Bench decision of this Court as also of the Apex Court, cannot be said to be laying down a binding precedent.
50. In Hyderabad Vanaspathi Ltd. v. A.P. State Electricity Board (supra) the Apex Court was considering the application of clause 39 of conditions of supply introduced by reason of B.P. Ms. No.690, dated 17-9-1975. Clause 39 provided for matters connected with pilferage of electrical energy. The Apex Court found that clause 3 does not violate any provisions of the 1948 Act, It observed:
........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, a uniform procedure has to be framed and a machinery constituted. Clause 39 is only doing that..........
51. It distinguished the decision in Powell v. May, (1946) 1 All.ER 444 = 1946 KB 330, where it was held that a bye-law made by the local council which was repugnant to the provisions of the statute was bad in law, on the ground that clause 39 is not repugnant to the provisions of any Act. Behval Spinning Mills Lid. And Basantibai (supra) have been specifically approved.
52. In Punjab SEB (supra) the Apex Court was concerned with a matter whether the disputes had been consciously referred to an arbitrator.
53. An argument in passing was made by the learned Counsel that sub-section (6) of Section 26 covers the field. The Apex Court did not pronounce its decision upon the said submission as the arbitrator had proceeded to consider the Board's claim for the said period as the dispute was also pending before the Electrical Inspector. In the said case, the meter installed in the premises of respondent-Ludhiana Steel Private Limited was found recording lower consumption whereupon a check meter was installed by the appellant-Punjab SEB. When a bill for Rs.28,56,854/- towards the energy said to have been consumed by the respondent but not recorded by the meter for the period prior to installation of check meter was issued, the respondent instituted a suit for permanent injunction wherein temporary injunction was granted. Meanwhile, on the ground that the suit was pending the Electrical Inspector refused to proceed with an application filed by the respondent under Section 26(6) of the Act requesting him to decide whether the meter was not correct and whether he is liable to pay any amount over and above that paid by him already with respect to the said period. When the temporary injunction was vacated, the respondent moved the High Court by way of a revision whereupon the High Court directed the Electrical Inspector to decide the matter referred to him in accordance with law clarifying that the pendency of the suit is no ground for him not to proceed with the said application. Thereafter, upon a review petition being dismissed, an appeal there against was moved before the Apex Court wherein an arbitrator was appointed at the hearing of the special leave petition. The arbitrator had also passed his award. No objection was raised to the effect that the arbitrator had no jurisdiction having regard to the provisions contained in Section 26(6) as would be evident from para 9 of the judgment which reads thus:
The second objection of the learned Counsel for the appellant is that what could have been referred to the arbitrator was only the dispute which was involved in the special leave petition. The main dispute pending in the suit was never intended to be nor was it actually referred to the arbitrator. This again is an objection which we cannot countenance. It is rather ridiculous to suggest that what was referred to the arbitrator was whether the Electrical Inspector should be asked to proceed with the application under Section 26(6) pending the suit. It is evident from the order that the very dispute between the parties pending in the suit was referred and that is how the arbitrator and the parties understood it. At no stage before the arbitrator did the Board raise the objection that he had no authority to go into the main dispute and that he must confine himself to the correctness of the High Court's order directing the Electrical Inspector to proceed with the application under Section 26(6). Having consented to the order dated November 14, 1991 and having participated in the proceedings before the arbitrator on the merits of the main dispute, it is not now open to the Board to raise the said objection merely because the award has gone against it.
54. With respect of the argument of the learned Counsel that sub-section (6) of Section 26 of the 1910 Act empowers the Electrical Inspector to estimate the amount of energy supplied to the consumer for a period of six months prior to the check in addition to the period subsequent to the check, the Apex Court further observed:
...... We need not pronounce upon this submission inasmuch as the arbitrator has proceeded to consider the Board's claim for the very same period. The reference to Electrical Inspector too is for the very same period i.e., October 6, 1986 to May 16, 1988, the date on which the check meter was installed.
55. The Apex Court did not, thus, state that the reference before the Electrical Inspector under Section 26(6) was bad in law; rather, it did not express any opinion on the correctness or otherwise relating to the said dispute. Paragraphs 12 and 13 of the said judgment, upon which strong reliance has been placed, read thus:
Lastly, it was submitted by Shri Goel that the agreement between the parties provides to the contrary, as contemplated by sub-section (1) of Section 26 and that for that reason the agreement prevails over the provisions of the statute. He relies upon the opening words in subsection (1) of Section 26 which reads as follows:
(1) In the absence of an agreement to the contrary, the amount of energy supplied to a consumer or the electrical quantity contained in the supply shall be ascertained by means of a correct meter, and the licensee shall, if required by the consumer, cause the consumer to be supplied with such a meter :
Provided that the licensee may require the consumer to give him security for the price of a meter and enter into an agreement for the hire thereof, unless the consumer elects to purchase a meter.
It is not brought to our notice that the agreement contains any provision inconsistent with the one contained in sub-section (6) of Section 26. It is not even shown that the agreement provides for a method (for ascertaining the amount of energy consumed by the respondent) different than the one provided in subsection (1) of Section 26. In such a situation, the contention urged by the learned Counsel must be held to be a misplaced one.
56. No argument was advanced as regards the interpretation of the said provision. No decision was cited. The provisions of the Act had not been analysed and it was merely held that there is no agreement which is inconsistent with the one contained in sub-section (6) of Section
26. Thus, on the one hand the award of the arbitrator was upheld and at the same time, the dispute between the parties before the Electrical Inspector under Section 26(6) was not interfered with. The said decision, therefore, is not a law of the land as laid down under Article 141 of the Constitution.
57. Sub-section (6) of Section 26 does not speak about any agreement. It only speaks about meter referred to in subsection (1). Such meter is required to be installed for ascertaining the quantity of electrical energy consumed and which is supposed to be a correct one. The very premise upon which an argument was advanced as regards existence of any agreement in sub-section (6) of Section 26 was thus non-est.
58. The provisions of the 1910 Act must be read reasonably having regard to the fact that it safeguards the interests of both the consumer and the licensee. As indicated hereinbefore the licensee exercises monopoly. Statutory provisions safeguarding the interests of the consumer where the licensee can act arbitrarily, by providing for an independent forum must be liberally construed.
59. The submissions of Mr. Subba Reddy are self-contradictory. He, as noticed hereinbefore, raised three mutually destructive submissions.
60. Section 26 of 1910 Act should be read in its entirety, reasonably and having regard to its object and purport.
61. In Reserve Bank of India v. Peerless Co., , it was held:
Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the next is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place.
62. In Anantha Kumar Bej v. State of West Bengal 1999 (4) SLR 661, a Division Bench of the Calcutta High Court has noticed the authorities as regards purposive construction thus:
It is a well settled principles of law that despite absence of a rule, the Selection Committee is entitled to short list the candidates. Rule 9(c)(ii) of the rules only gives a statutory recognition to the aforementioned service jurisprudence. In a case of this nature, therefore, the doctrine of purposive interpretation should be invoked, and in such a situation the word 'written test' must be held to be incorporated within the word 'interview'. The answer to the question posed in this appeal, thus in the opinion of this Court, should be rendered in affirmative as otherwise the word 'written examination' would become totally otiose. Such a Construction is permissible by taking recourse to the doctrine of strained construction, as has been elaborately dealt in by Francis Bennion in his Statutory Interpretation.
63. In Francis Bennion Statutory Interpretation, Second edition, as regards the rule of 'purposive construction', it has been stated at Section 304 as under:
A purposive construction of an enactment is one which gives effect to the legislative purpose by-
(a) following the literal meaning of the enactment where that meaning is in accordance with the legislative purpose (in the Code called a purposive-and-literal construction),
(b) applying a strained meaning where the literal meaning is not in accordance with the legislative purpose (in the Code called a purposive-and-strained construction).
64. In Principles of Statutory Interpretation by Justice G.P. Singh, 5th Edition, 1992, it is stated:-
The Supreme Court in Bangalore Water Supply v. A. Rajappa approved the rule of construction stated by
Denning, L.J., while dealing with the definition of 'Industry' in the Industrial Disputes Act, 1947. The definition is so general and ambiguous that BEG, CJ said that the situation called for "some judicial heroics to cope with the difficulties raised". K. Iyer, J., who delivered the leading majority judgment in that case referred with approbation the passage extracted above from the judgment of Denning, LJ., in Seaford Court Estates Ltd v. Asher. But in the same continuation he also cited a passage from the speech of Lord Simonds in the case of Magor and St. Mellons RDC v. Newsport Corporation, 1951 (2) All ER 839, as if it also found a part of the judgment of Denning, LJ. This passage reads: "The duty of the Court is to interpret the words that the Legislature has used. Those words may be ambiguous, but, even if they are, the power and duty of the Court to travel outside them on a voyage of discovery are strictly limited". As earlier noticed Lord Simonds and other Law Lords in Magor and St. Mellon's case were highly critical of the views of Denning, LJ. However, as submitted above, the criticism is mere because of the unconventional manner in which the rule of construction was stated by him. In this connection it is pertinent to remember that although a Court cannot supply a real casus omissus it is equally clear that it should not so interpret a statute as to create a casus omissus when there is really none.
65. Reference in this connection may also be made to Kanshi Ram v. Lachhman, . It is a well known principle of
construction of statutes that all words employed therein must be given its full meaning unless the same result in absurdity. In Gurudevdatta VKSSS Maryadit v. State of Maharashtra, it has been held:
Further we wish to clarify that it is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning, irrespective of the consequences. It is said that the words themselves best declare the intention of the law-giver. .....
66. Having regard to the object and purport of the Act, we are of the opinion that the contention of the respondent that 'agreement' referred to in sub-section (1) of Section 26 controls sub-section (6) thereof cannot be accepted irrespective of the fact as to whether a liberal meaning or a purposive meaning is assigned.
67. We are, therefore, of the view that the decision in Punjab SEB (supra) does not lay down a binding precedent. A decision is only an authority for what it decides.
68. In Dias on Jurisprudence, Fifth Edition at page 143, it is stated-
Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. Rationale and dicta tend to shade into each other. The former have law-quality and are binding on lower Courts; dicta, too, have law quality but are not binding at all. Vis-a-vis a higher Court even the ratio decidendi of a lower Court decision has only persuasive force like that of a dictum. It has been pointed out that some dicta are so authoritative that the distinction between ratio and dictum is reduced to vanishing point. Dicta which have no force, are propositions stated by way of illustration or on hypothetical facts. Greater difficulties attend rulings of law which are subsequently relegated to the status of dicta by interpretation. The distinction in such cases between ratio and dictum is but a device employed by subsequent Courts for the adoption or rejection of doctrine expressed in previous cases according to the inclination of the Judges. An example would be the treatment of Lord Akin's neighbour proposition in subsequent cases.
69. In Salmond on Jurisprudence 12th Edition, page 29, it is stated-
One of the essential features of the doctrine of precedent in the common law is that rules of law are developed in the very process of application. This means that they are created by Judges and not by teachers and other academic lawyers. However, learned they may be. It also means that they are created by Judges only when acting as Judges i.e., when deciding cases and not for example when giving lectures or other addresses; statements made by Judges in their extra-judicial capacity, like other extra-judicial opinions, are without binding authority. For the fundamental notion is that the law should result from being applied to live issues raised between actual parties and argued on both sides.
In the course of his judgment, however, a Judge may let fall various observations not precisely relevant to the issue before him. He may for instance illustrate his general reasoning by reference to hypothetical situation and the law which he considers to apply to them. Here of course, since the issue is not one that arises between the parties, full argument by Counsel will be lacking, so that it would be unwise to accord the observation equal weight with that given to his actual decision. Or again, having decided the case on one point, the Judge may feel it unnecessary to pronounce on the other points raised by the parties, but he may nevertheless want to indicate how he would have decided these points if necessary. Here again we are not given the Judge's final decision on a live issue, so that once more it would be unwise to endow it with as much authority as the actual decision. These observations by the way, obiter dicta are without binding authority, but are nonetheless important; not only do they help to rationalise the law but they serve to suggest solutions to problems not yet decided by Courts. Indeed dicta of the House of Lords or of Judges who were masters of their fields, like Lord Blackburn, may often in practice enjoy greater prestige than the rationale of lesser Judges.
70. In CIT v. Sun Engineering Works (P) Limited, Dr. A.S. Anand, J (as the learned Chief Justice then was) stated the law in the following terms:
... It is neither desirable nor permissible to pick out a word or a sentence from the Judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this Court. The judgment must be read as a whole and the observation's from the judgment have to be considered in the light of the questions which were before this Court..........."
71. In Jaya Sen v. Sujit Kr. Sarkar, 2000 (1) ILR A&N 145, it was held-
It is now well known that a decision is an authority for what it decides and not what can logically be deduced therefrom. It is also well known that even a slight distinction in fact or an additional fact may make a lot of difference in decision making process (see Quinn v. Lealhain, [(1990-1993) AER (Rep.) 1], Krishna Kumar v. Union of India, , Commissioner of Income Tax v. Sun Engineering Co., Ltd., , Regional Manager v. Pawan Kumar Debey, and Municipal Corporation of Delhi v. Gurnam Kaur, [1988(1) SCC 101).
72. It is also a settled law that a decision is not an authority on a point which was not argued [see Mittal Engineering Works (P) Ltd v. Collector of Central Excise, ].
73. In A-One Granites v. State of UP., 2001 AIR SCW 848, it is observed:
The first question which falls for consideration of this Court is as to whether the question regarding applicability of Rule 72 of the rules in relation to the present lease is concluded by the earlier decision of this Court rendered in Prem Nath Sharma v. State of U.P.,. From a bare perusal of the said judgment of this Court it would be clear that the question as to whether Rule 72 was applicable or not was never canvassed before this Court and the only question which was considered was whether there was violation of the said rule.
This question was considered by the Court of Appeal in Lancaster Motor Co., (London) Ltd. v. Bremith Ltd., (1941)1 KB 675, and it was laid down that when no consideration was given to the question, the decision cannot be said to be binding and precedents sub silentio and without arguments are of no moment.
74. In Arnit Das v. State of Bihar (supra) the Apex Court observed:
A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not the ratio decidendi. This is the rule of sub silentio, in the technical sense when a particular point of law was not consciously determined.
75. Our answer to the questions referred to, therefore, are: (1) The decision in Punjab SEB (supra) cannot have any application where a dispute arises as regards correctness of the meter. Section 26(6) of the 1910 Act will have no application where the issue is as to whether the consumer has committed a fraud and/ or indulged in pilferage of electrical energy; (2) Since the words "in the absence of any agreement to the contrary" as found in sub-section (I) of Section 26 refers to ascertainment of electrical quantity contained in the supply by means of a correct meter, the same cannot control the right of the parties in getting the disputes referred to an Electrical Inspector under sub-section (6).
76. We are, therefore, of the opinion that in a case where fraud is not alleged and the issue merely centers round as to whether the meter is correct or not, Section 26(6) of the 1910 Act shall apply. It may be a different question whether a party has waived his right which will depend upon the facts and circumstances of each case.
77. We, having regard to the nature of reference made before us need not go into the other questions. The matter shall now be remitted to the appropriate Bench for determining the dispute involved in the matter. The reference is thus answered. No costs.