BIHAR STATE ELECTRICITY BOARD, PATNA AND ORS versus GREEN RUBBER INDUSTRIES AND ORS.

Citation: [1989] SUPP. 2 S.C.R. 275 · Decided: 24-11-1989 · Supreme Court of India · Bench: K.N. SAIKIA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

BIHAR STATE ELECTRICITY BOARD, PATNA AND ORS 
v. 
GREEN RUBBER INDUSTRIES AND ORS. 
NOVEMBER 24, 1989 
[K.N. SAIKIA AND M. FATHIMA BEEVI, JJ.) 
Electricity Supply Act 1948-Sections 5-7, 23 and 49-Consu-
mer-Liability to pay minimum guaranteed charges-Agreement-
Validity of. 
' 
The Respondent firm made an application to the appellant-
Electricity Board for the supply of 60 KV A electricity and the Board 
entered into an agreement with the Respondent-firm in that behalf 
and gave electricity connection on 13.4.1981. Thereafter the Respon-
dent-firm applied for reduction of electricity from 60 KV A to 45 KVA 
and a fresh agreement was executed on May 2, 1981 and fresh connet-
tion of 45 KVA was given on 29.5.19Sl. It is respondent's case that it 
had requested the Electricity Board on 19.6.1981 to cut off the Electri-
city. The firm received Bills for minimum guaranteed charges for four 
months i.e. from June to September 1981. The firm refuted its liability 
to pay the bill on the ground that. it consumed no electricity during the 
aforesaid period of 4 months. Consequent upon the firm's failure to pay 
the Bill, the Board disconnected the electricity connection on 28.9.1981. 
The firm ultimately received a bill for Rs.22,951.50p for the period 
commencing from June to August 1981. On the firm's failure to pay the 
Bill, the Board sent a requisition to the Certificate Officer who sent a 
notice to the firm on 6.7.1981. The Certificate Officer rejected the plea 
of the firm that,, it was not liable to pay the Bill and"proceeded to attach 
the property of the firm. Being dissatisfied with the action, the respon-
dent firm filed a Writ Petition in the High Court for quashing the bills 
as also the certificate proceedings. 
The High. Court took the view that the Board itself having dison-
nected the connection, it was not entitled to any charges for the period 
after September 1981 and it was not open to the Board to contend that 
under clause 9 of the agreement it was not open to either party to 
terminate the agreement of minimum guaranteed charges before the 
expiry of two years from the date of the agreement. The High Court 
accordingly quashed the bills as well as the certificate proceedings but 
allowed the charges for July, August and September 1981 to be adjusted 
against the security money. 
275 
A 
B 
c 
D 
E 
F 
G 
H 
276 
SUPREME COURT REPORTS 
(1989] Supp. 2 S.C.R. 
A 
The Electricity Board has therefore filed this appeal after obtain-
ing Special Leave. 
Allowing the appeal, this Court, 
HELD: A supply agreement to a consumer makes his relation with 
B the Board mainly contractual, where the basis of supply is held to be 
statutory rather than contractual. In cases where such agreements are 
made, the terms are supposed to have been negotiated between the 
consumer and the Board, and unless specifically assigned, the agreement 
normally would have affected the CODSIUDer with whom it is made. (2860-E] 
c 
D 
E 
F 
G 
The agreement was reasonable and valid and it was not deter-
mined with the disconnection of supply to the respondent-firm. The 
liability to pay the minimum guaranted charges, therefore, continued 
till the determination of the contract. The Board was.therefore entitled 
to submit the bills and make the demand on that account and recover 
the same according to Jaw. [28SF-G l 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 220 
of 1987. 
From the Judgment and Order dated 22.5.1986 of the Patna High 
Court in Civil Writ Jurisdiction Case No. 1915 of 1986. 
Soli J. Sorabjee and Ranjit Kumar for the Appellants. 
B.D. Sharma "and S.K. Jain for the Respondents. 
The Judgment of the Court was delivered by 
K.N. SAIKIA, J. This appeal by special leave is from the Judg-
ment of the High Court of Judicature at Patna dated May 22, 1986 in 
Civil Writ Jurisdiction Case No. 1915 of 1986 quashig the bills issued 
by the appellants demanding minimum guaranteed charges from the 
respondents. 
The appellants Bihar State Electricity Board, Patna, hereinafter 
referred to .as 'the Board', entered into an agreement with the 
respondent-Mis. Green Rubber Industries, a partnership firm, 
hereinafter referred to as 'the firm', on the latter's application dated 
26th July, 1978, for supplying the electricity of 60 KV A and on 
H 13.4. 1981 gave electricity connection. The firm later applied that it 
BIHAR STATE ELECfY. BOARD v. RUBBER INDUSTRIES [SAIKIA, J.l 
277 
may be given 45 KV A instead of 60 KVA and it deposited
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