PUNJAB STATE ELECTRICITY BOARD AND OTHERS versus LUDHIANA STEELS PRIVATE LTD.

Citation: [1992] SUPP. 3 S.C.R. 275 · Decided: 01-12-1992 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Disposed off

Judgment (excerpt)

.. 
' 
PUNJAB STATE ELECTRICITY BOARD AND OTHERS 
A 
v. 
LUDHIANA STEELS PRIVATE LTD. 
DECEMBER 1, 1992 
[B.P. JEEVAN REDDY AND G.N. RAY, JJ.] 
Constitution of India, 1950-Artic/e 136-Appeal by special leave- ' 
Supreme Court referring dispute to Arbitrator-Participation by parties in ar-
bitratio~Award made on merit-Whether party can question. 
The respondent • plaintiff entered into· an agreement with the 
Eleciricity Board for supply of energy and was availing it. On 6.4.1987, 
when the meter installed at the respondent's premises was checked, it was 
found that it was recording lower consumption than what was actually 
being consumed. 
On 16.5.1988 a check meter was installed. The respondent paid the 
charges on the basis of the readings recorded by the check-meter. For the 
period commencing 6.10.1986 upto 16.5.1988 the Board sent a bill dated 
16.8.1988 for Rs.28,56,854 towards the energy said to have been consumed 
by the respondent, though not recorded by the meter. 
The respondent instituted a suit disputing the bill and asked for a 
permanent injunction restraining the Board and its officials from recover-
ing the amount or any part thereof on the basis of the bill. 
A Temporary injunction was granted initially on his application and 
later it was vacated. 
Meanwhile, the respondent applied to the Electrical Inspector under 
sub-section (6) of Section 26 of the Indian Electricity Act requesting him 
to decide whether the meter was correct and whether he was liable to pay 
B 
c 
D 
E 
F 
any amount over and above that paid by him already with respect to the G 
said period. 
The Electrical Inspector refused to proceed with the application on 
the ground of pendency of the suit. 
Against the order vacating the temporary injunction, the respondent H 
275 
276 
SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R. 
A 
filed a revision before the High Court. 
The High Court dis posed of the rev1S1on petition directing the 
Electrical Inspector to decide the matter referred to him in accordance 
with law within four months. 
B 
The respondent filed a review petition which was dismissed on 29tl't 
c 
D 
E 
August 1991, against which the present appeal was preferred by special 
leave. 
When the Special Leave Petition came up for orders this Court 
directed to refer the dispute to the arbitration of a retired Judge of this 
Court. 
In accordance with this Court's order, the Arbitrator entered upon 
the reference. 
The Arbitrator held that the suit in which reference to arbitration 
was made pertained only to the period from 6.lr 1986 to 16.5.1988. He 
refused to pronounce upon the respondent's claim With respect to the 
periods, 17 .5.1988 to 10.8.1990 and 10.8.1990 onwards. He held that the 
Board was not entitled to any amount for supply of electrical energy to the 
company over and above that computed in accordance with the readings 
recorded by the first meter except in so far as an Electrical Inspector might 
allow it in a decision given in conformity with the provisions of sub-section 
(6). 
The ·Board filed objections in this Court to the award. The Board 
F 
urged that the award be sent to the trial court which would consider and 
decide whether, it should be made the Rule of the Court; that what could 
have been referred to the Arbitrator was .only the dispute which was 
involved in· the Special Leave Petition; that the main dispute pending in 
the suit was never intended to be nor was it actually referred to the 
G Arbitrator; that the Arbitrator had not decided the question which he was 
asked to decide, inasmuch as he had relegated the dispute over again to 
the Electrical Inspector; that sub-section (6) of Section 26 empowered the 
Electrical Inspector to estimate the amount of energy supplied to the 
consumer for a period six months prior to the check; that the agreement 
between the pa!"1ies provided to the contrary, as contemplated by sub-
H 
section (1) of Section 26 and for that reason the agreement prevailed over 
ELECTRICITY BOARD v. LUDHIANASIBELS 
277 
the provisions of the statute. 
Disposing of the case, this Court 
HELD: 1.1. The very dispute between the parties pending in the suit 
was referred by this Court. 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

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