LexKANPUR ELECTRICITY SUPPLY CO. LTD. & ANR. versus M/S. L.M.L. LIMITED & ORS.
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.... -. · (2010] 6 S.C.R. 419 KANPUR ELECTRICITY SUPPLY CO. LTD. & ANR. A v. M/S. L.M.L. LIMITED & ORS. (SLP (Civil) No. 33984 of 2009) MAY 7, 2010 [ALTAMAS KABIR, CYRIAC JOSEPH AND C.K. . PRASAD, JJ.] B U. P. Electricity Supply Code, 2005 - Clause 4.41 read with clause 4.49 - Reduction in contracted load - C Deteriorating market conditions - Application for reduction of contracted load from 8 MVA to 1.25 MVA with effect from 01.04.2006, by a public limited company- Meeting between two companies to reduce the same subject to certain condition - Load reduction approved by Electricity Regulatory D Commission - Company declared 'Relief undertaking' as also 'Sick unit' - Electricity Supply Company-KESCO raising monthly bills based on 8 MVA load thereafter - KESCO asking the company to submit Bank Guarantee for arrears of amount as per the amended clause 4.49 - Load not reduced E since Bond and affidavits submitted by company did not secure the outstanding dues - Direction by BIFR to KESCO to continue to accept Rs.5 lakhs p.m. against arrear dues together with current dues on basis of actual consumption - Strict adherence by company to the said order - However, F issuance of disconnection notice ...,.. Writ petition by company seeking direction upon KESCO that load stood reduced from 01.04.2006 - Allowed by High Court - Interference with - Held: Not called for - KESCO, instead of helping the company to come out of its financial crisis, prevented it from G doing so by refusing to lower the load from 8 MVA to 1.25 MVA, as agreed upon - In fact, company had been declared a 'Relief Undertaking' and a 'Sick Company' - When decision was ta!fen to reduce the contract load, unamended Clause. 4.49 was in existence which provided for submission of either H 419 420 SUPREME COURT REPORTS [201 O] 6 S.C.R. A a Bank Guarantee or a Bond or any other instrument to the satisfaction of the licensee of the equal amount of pending dues - After amendment, Bond was excluded from the provision - Continued insistence of KESCO that Bank Guarantee should be provided by the company in respect of s its outstanding dues, had the effect of negating the decisions to revive the Company - Electricity Act, 2003 - s. 5. Respondent no.1 is a public limited company engaged in the manufacture and sale of two-wheelers. C Due to market fluctuations it had to stop its manufacturing activities. The respondent company was declared a "Relief Undertaking" uls. 3(1) of the U.P. Industrial Undertaking (Special Provisions for Prevention of Unemployment) Act, 1966. The respondent no.1-company applied to the petitioner-State Electricity Supply D Company for reduction of the contracted load from 8 MVA to 1.25 MVA from 1st April, 2006. The decision was taken by two companies to reduce the load with certain conditions. The Electricity Regulatory Commission approved the reduction of the load. However, electricity E bill was raised for the month of May, 2006 on basis of 8 MVA load. The respondent paid the bill on basis of 1.25 MVA load. The respondent company was also declared a "Sick Company" under Sick Industrial Companies (Special Provisions) Act, 1985. The load was not reduced F since the outstanding dues of the respondent company were 8.42 crores as on 31st March, 2006. The petitioner wrote to the respondent to submit a Bank Guarantee for arrears of the amount as per the amended clause 4.49 of the U.P. Electricity Supply Code, 2005 so that action could G be taken to reduce the load from 8 MVA to 1.25 MVA. Thereafter, the respondent company restarted its manufacturing activities and sought increase of the load from 1.25 MVA to 2.25 MVA. The petitioner rejected the same since the respondent did not submit the Bank H Guarantee for the balance amount. The respondent KANPUR ELECTRICITY SUPPLY CO. LTD. & ANR. v. 421 l.M.L. LIMITED & ORS. company submitted a Bond stating that the Company A was agreeable to make payment of the arrears, if any, to petitioner upon the directions of the court and the amount as was decided by the courts. However, since the two affidavits and the Bond did not secure the outstanding dues of the petitioners and were also not to its B satisfaction, the load was not reduced. The BIFR then directed the petitioners to continue to accept Rs.5 lakhs p.m. against the arrear dues together with the current dues on the basis of the actual consumption and not to adopt coer
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