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Cites 1 docs
The Indian Companies (Amendment) Act, 1930
Citedby 1 docs
Sai Iron (India) Limited vs State Of Bihar And Ors. on 6 August, 2003

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Patna High Court
Kamper Concast Ltd. vs Bihar State Electricity Board And ... on 20 September, 1999
Equivalent citations: AIR 2000 Pat 67
Bench: A Alam


1. These two writ petitions are filed by the same petitioner which is a company incorporated under the Indian Companies Act. The petitioner has a High Tension Industrial connection for running an induction furnace. It first filed CWJC No. 8802/ 1999 challenging the disconnection of its electricity line pursuant to inspections held on August 26 and 27, 1999 followed by the Institution of an FIR in which it is alleged that the petitioner was engaged in theft of electricity. Before any order could be passed in that case, the petitioner was given a bill, dated 31-8-1999 for a sum of Rs. 5,88,61,757.00. The impugned bill is raised on the basis of the penal provisions as contained in clause 16.9 of the tariff pursuant to the charge of theft of electricity on the basis of the inspection reports and some other materials as would be indicated hereinafter. It then filed CWJC No. 9061/1999 challenging the demand made in the bill dated 31-8-1999 (Annexure 14 to the second writ petition).

2. These two cases were, therefore, heard together and are being disposed of by this common order.

3. Heard Mr. Pawan Kumar, senior counsel appearing for the petitioner and Mr. Y. V. Giri, senior counsel representing the Board.

4. The petitioner's unit was inspected by a team of officials of the Board on 26-8-1999. The findings of the inspection are recorded in the inspection report of that date a copy whereof is at Annexure 10. In the inspection held on 26-8-99 it was found as follows :

"1. The metering unit was inspected externally. The sealed terminal cover was not open for want of MRT Gang.

2. Meter room was opened by removing plastic seal, beat No. 016736 P and opening the lock.

3. Meter box was opened for inspection . by removing plastic seal beat No. 016734 P.

4. The meter box was found made of wooden plants. Meter was inspected externally and readings were taken.

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5. For further investigation with MRT Gang, paper seals were pasted with consumer's representatives signature to Executive Magistrate's signature with BSE Boffice Sgn. on meter box, meter room, consumer's premises Metering unit and check meter metering unit, as well as check meter box."

5. On the next date the officials of the Board once again came to the unit along with the MRT Gang and the findings of the inspection held on the next day is recorded in the inspection report dated 27-8-99 a copy whereof is at Annexure 11. The relevant findings from this Inspection report are reproduced below :

"All the three paper seals of M/U installed in the premises of consumer were found detached. It might have been due to loose pasting. As a matter of fact while the paper seals were pasted, it was raining light. The plastic seal beat No. 016282 P of terminal cover of stated M. U. was found open though externally it appeared to be sealed."

6. It is important to note here that plastic seal bit No. 016282 P on the terminal cover of the metering unit which was found open was not put in course of the inspection held on the previous day. From the inspection report dated 7-7-99 (Annexure 3) it is evident that the seal bit with the aforesaid number was put much earlier on 7-7-99. It is necessary to clarify this because in case any tampering was detected in any seal put in course of inspection on the previous day on 26-8-99, it could be legitimately inferred that the petitioner's men were interfering with the inspection itself and they were trying to alter the metering appliances in course of the inspection. But as noticed above that is not the position.

The further findings in the inspection report, dated 27-8-1999 are as follows :

"The connection of M.U. terminal point and meter terminal point were checked and found O.K.

The H.T. jumpers at M.U. and were removed. 25 Amps and 50 Amps of current were applied at H.T. side of M.U. in both R & B phases and at meter terminal and it was measured to be 2.5 Amps and 5 Amps, respectively. ....

"All the paper seals pasted on check meter box and M.U. were found intact. It was left as it is the plastic seal beat No. 046729 P of M.U. terminal cover (check M.U.) was removed and terminal cover was resealed with plastic seal beat No. 047537 P. The Araldite adhesive was found applied with removed seal beat No. 046729 P. The meter box was resealed with two nos. paper seals after taking the check reading. The readings of both the meters is recorded in the margin".

"KWH 1062314 1030381 M.F. 1.5 for both the meters.

"KVAH 1183610 1163813 "M.D. 19762094 Time 22.5 - Hrs. 23.09 Hrs."

8. Following the two inspections a F I R was Instituted against the petitioner a copy of which is at Annexure 13.

9. In course of arguments, Mr. Y. V. Giri was repeatedly asked to point out any findings in the inspection reports, dated August 26 and 27, 1999 which would establish or suggest theft of electricity or unauthorised enhancement of the sanctioned load by the petitioner. Mr. Glri Instead of giving a clear answer to the query in respect of the inspection reports, invited this Court's attentions to various other materials brought on the record along with the counter-affidavit filed on behalf of the Board. Mr. Giri submitted that the Board had received definite information from the manufacturer of induction furnace, namely, A.B.B. Company which in the year, 1995 had reportedly sold to the petitioner an induction furnace with the capacity of 8000 Kgs. (8 metric tons). In this regard, it was contended on behalf of the Board that it was well established and beyond any doubt that a load of 600 KVA was required for running an induction furnace of 1 metric ton capacity. The relevant statements in this connection are made in paras 8, 9 and 10 of the counter-affidavit.

"8. That the company which has supplied induction furnace to the writ petitioner, has sent information to the Director General of Police (Vigilance), Bihar State Electricity Board, Patna that the capacity of the furnace is 8 M.T. (8000 K.G.). Per M.T. load on an average, which has been established scientifically, would be about 600 KVA. Therefore, the normal requirement for furnace installed In the factory of the writ petitioner becomes 4800 KVA. This shows that the writ petitioner has entered into much lower contracted demand than what he is using in his factory.

"9. That taking minimum 10 heat runs per day the viable production of mild steel Ingots even for 25 days in a month will come to the tune of 2000 M.T. per month requiring 2000 x 540 units, i.e. 10.80 lakhs KWH amounting to Rs. 34.02 lakhs. As will be evident from the brochure, the load demand will be at the rate of 600 KVA per M.T. i.e. 600 x 8 = 4800 KVA. This shows suppression of load to the tune of 2300 KVA.

"10. That It may be stated that even if according to the document of the writ petitioner dated 15-5-1999 when he has submitted project report to the Superintending Engineer, Patna Circle, he has disclosed his capacity of furnace as 6.5 M.T. having 10 heat runs and 65 M.T. per day production. Even as per this project report the viable monthly production of ingots as claimed by the writ petitioner at the rate of 540 unit per M.T. comes to 8.77 lakhs units per month amounting to Rs. 27.64 lakhs per month. It may be stated that the average billing of the writ petitioner's unit is 4.5 Lakhs units amounting to Rs. 14.17 Lakhs. This shows that a huge amount of power Is being con-

sumed dishonestly by the writ petitioner."

10. According to Mr. Giri the consumption of electricity and the KVA load required by the petitioner was not being reflected in the meter readings and thus it was clearly a case of both unauthorised enhancement of load and pilferage of electricity.

11. Mr. Giri further submitted that after the inspection is and institution of criminal cases against the petitioner and a number of similarly situated companies engaged in the running of induction furnaces the Bihar Steel Manufacturers Association has made offer to pay their electricity charges on the following basis :

"RATES : Demand Charges Rs. 650,00 per KVA, B. Energy charges Rs. 1.00 per KWH, C. Minimum Monthly Charges (A&B) Rs. 850 per KVA, D. Demand requirement Rs. 600 KVA for 1 M.T. melting unit i.e. 1800 KVA for 3 M.T. furnace."

12. According to Mr. Giri this also was indicative that induction furnace units were engaged in unauthorised withdrawal of loads and theft of electricity.

13. Mr. Pawan Kumar strongly refutes the inferences sought to be drawn against the petitioner and submits that those are only unfounded conjectures.

14. It is, however, undeniable that the aforesaid circumstances on the basis of which the Board seeks to infer that the petitioner was engaged in withdrawal of energy at a higher load and was committing theft of energy was not brought to its notice and the petitioner was not given an opportunity to put forth its defence in this regard.

15. As noted above the two inspection reports do not contain any objective finding which would establish or suggest that the petitioner was in fact engaged in commission of theft of electricity. Therefore, there does not appear to be any direct conclusive evidence of theft of electricity and the inference is founded on circumstantial materials.

16. In these facts and circumstances, in my view, the Board was obligated to observe the principles of natural justice and the petitioner was entitled to an opportunity to put forth its case before the disconnection of its line and the demand made under the penal provisions of Clause 10 a of the tariff.

17. On hearing counsel for the parties, I find that the case of the petitioner is fully covered by a recent decision of this Court in Venky Steels Ltd. v. Bihar State Electricity Board (CWJC No. 4522/1999 : date of disposal 14.9, 1999). I am, therefore, constrained to interfere in this matter and to allow these writ petitions. The impugned bill is accordingly set aside and the Board is directed to restore the petitioner's electrical connection without any delay. It will be, however, open to the Board to give a notice to the petitioner, briefly indicating all the material facts and circumstances on the basis of which it has reasons to believe that the petitioner is engaged in theft of electrical energy/unauthorised enhancement of its load. As and when a notice is given, the petitioner will be required to file its show cause within seven days from the date of service of the notice. It will be thereafter for the Board to take a final decision in this matter as soon as possible but after giving the petitioner an opportunity of hearing. In case the petitioner's defences are not accepted, the Board will pass a speaking order briefly assigning reasons. It will be then further open to the Board to raise fresh demands on the basis of that order.

18. Having regard to the magnitude of the claim it will be advisable that the notice be issued by the General Manager cum Chief Engineer or an officer of an equal or higher rank than the General Manager.

19. It is further clarified that this Court has interfered in this matter on the sole ground that the action of the Board in disconnecting the petitioner's line and invoking Clause 16.9 of the tariff was unsustainable due to the non-observance of the principles of natural Justice. No observation or remark made in this order is to be construed as expressing any opinion on the merits of the parties' case and the authority issuing notice to the petitioner will consider the case on its own merits independently and without being influenced by any observations made in this order.

20. In the result, these writ petitions are allowed subject to the aforesaid observations and directions.