BIHAR STATE ELECTRICITY BOARD versus HOTEL SATKAR PVT. LTD. AND OTHERS

Citation: [1996] SUPP. 6 S.C.R. 673 · Decided: 24-09-1996 · Supreme Court of India · Bench: K. RAMASWAMY

Judgment (excerpt)

BIHAR STATE ELECTRICITY BOARD 
v. 
HOTEL SATKAR PVT. LTD. AND OTHERS 
SEPTEMBER 24, 1996 
[K. RAMASWAMY AND G.B. PAITANAIK, JJ.) 
Indian Electricity Act, 19lo-Discontinuance of supply of 
electricity-Wl1ether Electlicity Board justified in making demands on the 
basis of contract demand in the absence of agreement between pa1ties-Pa1ties 
agree to inter-dete1111ination of dispute for the period upto Febma1y 1984 by 
an officer not below rank of Chief Engineer to be nominated by Govem-
ment-Clzief Engineer detennining the amount payable on the basis of actual 
consumption-Held : Decision of Chief Eligineer is binding 011 the pwties. 
A 
B 
c 
The respondent filed a Writ Petition challenging the legality of notice D 
u/s. 24(1) of the Yndian Electricity Act 1910 for disconnection of electricity 
supplied to the Respondent by the appellant Board on the ground of 
non-payment of bills amounting to Rs. 3,01,449.30 upto March 1979 sub-
mitted by the Board to the respondent. The respondent's contention was 
that in the absence of any contract entered into with the appellant Board, 
charge could be levied only on the basis of actual consumption and not on E 
basis of contract demand. It was further contended that the bills submitted 
by the appellant'being disputed, no notice could have been issued u/s. 24(1) 
and the matter could only have been referred to be Electrical Inspector for 
a decision u/s. 24(2) of the Act. The High Court accepted the contentions 
of the respondent and quashed the notice of demand and issued a man-
F 
damns to the appellant Board not to disconnect the supply line so long as 
the dispute was not resolved in accordance with law. 
On appeal preferred by the Board, this Court, issued certain interim 
directions regarding payment of bills on the basis of actual consumption. G 
On 9th May, 1984, the appellant Board disconnected the supply of 
electricity as the respondent failed to pay the bills issued by the Board. On 
an application filed by the respondent, this Court by its order dated 
28.5.1984, on the agreement and joint submissions of both parties, directed 
that the correct amount payable be determined by an officer, not below the 
rank of Chief Engineer to be nominated by Government. Subject to the H 
673 
674 
SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R. 
A 
respondent undertaking that the amount so determined shall be eaid 
within a week and compliance therewith, this Court directed the Board to 
restore the supply of electricity. Such payment however was to be without 
prejudice to the rights and contentions raised in the appeal. The Chief 
Engineer nominated by the Government, after hearing the parties came to 
B 
the conclusion that for the period from 1st April 1977 to February 1984, 
the respondent was liable to pay a sum of Rs. 9,68,335.67 on the basis of 
actual consumption of energy and giving credits for amounts actually paid, 
the outstanding dues till February 1984 worked out to Rs. 3,84,559.33. 
Objections were filed by the respondent to the report of the Chief Engineer. 
C 
Disposing of the appeal, this Court 
D 
E 
HELD : 1. The Respondent could not seek to wriggle out of the Chief 
Engineer's report submitted pursuant to this Court's order dated 28.5.1984 
which has been passed on the agreement of both parties,.on the ground that 
it was without prejudice to the contentions in the appeal.,[678-E-Gr 
2. Though initially the dispute related to bills sub-milted upto 1979 on 
the date the Court pas_sed the order i.e. on 28.5.1984, the controversy was in 
respect of the amount charged till February 1984 and not the original 
amount which was the subject matter ofthe Writ Petition. ~679-B-C] 
3. The Chief Engineer had determined the liability not on the basis 
of contract demand but on the basis of actual consumption. [679-D·E] 
4. The fact that the dispute regarding the bills raised upto 1979 had 
been referred to the Chief Inspector under section 24(2) of the Electricity 
F Act must be considered in the light of subsequent developments and any 
order that may be passed by the Electrical Inspector cannot over-ride the 
ultimate decision taken by the Chief Engineer in determining the liability 
of the respondent. [679-G-H, 680-A·B] 
G 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 921. of 
1980 . 
. From the Judgment and Order dated 7.9.79 of the Patna High Court 
iii C.WJ.C. No. 1710of1979. 
H 
Pramod Swarup and Praveen Swarup for die ~llant. 
BIHARSfATEELECIRICITYBDv. HOTELSATKAR(

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