2005 (8) TMI 671 - SC - Indian Laws

Supreme Court Upholds Decision on Electricity Supply, Interest, and Compensation

The Supreme Court upheld the National Commission's decision, directing the Board to supply electricity, pay interest at 9% per annum on security deposits, ... Whether the Board having not made itself ready to supply electrical energy to the agriculturists unjustly enriched itself with the money deposited by the complainants without rendering any service in return? Issues Involved:1. Statutory obligation of the licensee to supply electrical energy.2. Deficiency in service by the Board.3. Applicability of administrative circulars and regulations.4. Payment of interest on security deposits.5. Compliance with Consumer Protection Act.6. Malice in law and unauthorized actions by the Board.Issue-wise Detailed Analysis:1. Statutory obligation of the licensee to supply electrical energy:The Board, as a statutory authority under the Electricity (Supply) Act, 1948, is obligated to supply electrical energy to consumers. Section 22 of the Indian Electricity Act, 1910, underlines this obligation, stating that every person within the area of supply is entitled to electrical energy on the same terms as others in similar circumstances. The Board's duty to render services efficiently and impartially is reinforced by common law principles and statutory obligations.2. Deficiency in service by the Board:The Respondents, agriculturists, filed applications for electricity supply and deposited the required security amount. Despite compliance with formalities, the Board failed to supply electrical energy, leading to complaints of deficiency in service. The District Forums found the Board guilty and directed it to provide connections and awarded compensation. The Board's appeals were dismissed, and the National Commission upheld the claims, directing the Board to release connections by a specified date and pay interest and compensation.3. Applicability of administrative circulars and regulations:The Board argued that it acted under regulations framed under Section 79(j) of the Electricity (Supply) Act, 1948, which purportedly did not require payment of interest. However, the regulations were not applicable as they were enforced after the applications were filed. The administrative circulars required the Board to supply electricity within specified timeframes, subject to material availability, but this did not absolve the Board from its statutory duties.4. Payment of interest on security deposits:The Board's regulations and Commercial Circular No. 57/2001 stated that no interest was payable on Advance Consumption Deposits (ACD) or Additional Advance Consumption Deposits (AACD). However, interest at 6% per annum was payable on security deposits against meters/meters equipment. The National Commission directed payment of interest at 12% per annum on the amounts deposited by the complainants, which was later modified to 9% per annum by the Supreme Court.5. Compliance with Consumer Protection Act:The Consumer Protection Act mandates better protection of consumer interests. The Board, as a 'State' under Article 12 of the Constitution, must discharge its statutory functions within a reasonable time. The Board failed to supply electricity within the prescribed period, leading to complaints under the Consumer Protection Act. The National Commission found the Board unjustly enriched itself with the complainants' money without rendering any service.6. Malice in law and unauthorized actions by the Board:The Board's failure to supply electricity and its actions were deemed to be without lawful excuse, amounting to malice in law. The Board's conduct suggested it acted for purposes not authorized by the Act, leading to unjust enrichment and inconvenience to the consumers. The Supreme Court noted that the Board's actions must be fair and bona fide, and it cannot act for unauthorized purposes.Conclusion:The Supreme Court modified the National Commission's directions, reducing the interest rate to 9% per annum and compensation to Rs. 5000/- each. The appeals were dismissed with these modifications, emphasizing the Board's statutory obligations and the need for fair and reasonable actions in public utility services.