ADONI GINNING FACTORY BAJRANG JUTE MILLS LIMITED Vs. SECRETARY ANDHRA PRADESH ELECTRICITY BOARD HYDERABAD:STATE ELECTRICITY BOARD ANDHRA PRADESH

JUDGEMENT

(1.) These two appeals arise out of a batch of Writ Petitions which were allowed by a learned Single Judge of the High Court of Andhra Pradesh, but which on appeal, were dismissed by a Division Bench of the Court. The appellants were consumers of high and low tension electrical energy which was being supplied to them under agreements with the Government of Andhra Pradesh. By G. O. No. 187 dated 30-1-1955, the Government of Andhra Pradesh purporting to act in exercise of its power under Section 3 of the Essential Articles Control and Requisitioning (Temporary Powers) Act, enhanced the rates of supply of electrical energy over and above the contracted rates. Several persons, including the appellants in the two appeals, filed Writ Petitions in the High Court of Andhra Pradesh, challenging the validity of G.O. No. 187 dated 30th January, 1955. Pending disposal of the Writ Petitions they obtained stay of collection of enhanced charges. The Writ Petitions were finally allowed by Satyanarayana Raju, J., on 22nd February, 1957, and G. O. No. 187 dated 30th January, 1955 was struck down. The Government of Andhra Pradesh preferred appeals under clause 15 of the Letters Patent. The appeals were allowed by a Division Bench of the High Court on 19th December, 1958, and G. O. No. 187 dated 30th January, 1955 was upheld. After the appeals were allowed by the Division Bench, the Andhra Pradesh State Electricity Board, to whom the Government had transferred the Electricity Undertakings with effect from 1st April, 1959, issued bills to the several consumers calling upon them to pay the arrears of enhanced charges. At this stage the consumers were not called upon to pay any surcharge on the arrears. Some of the consumers including the present appellants filed appeals in the Supreme Court and on 10th August, 1959, obtained orders of injunction restraining the Government from realising from them the "amount of arrears occasioned by the enhancement of rates". The injunction was subject to the condition that they offered security for such amount of arrears intimation of which was directed to be given to them by the Government. There was no injunction restraining the Government from collecting future charges at the enhanced rates. The Andhra Pradesh State Electricity Board to whom (as we mentioned earlier) the Government had transferred its Electricity Undertakings duly issued bills to the consumers specifying separately the total amount (including arrears) which had to be paid at the enhanced rates, the amount which the consumer had necessarily to pay in view of the orders of the Supreme Court and the amount of arrears. Each consumer was expressly told that if his contentions were eventually rejected by the Supreme Court he would have to pay the amount of arrears with surcharge thereon calculated at two per cent per rupee per month. Two per cent was mistakenly mentioned for one per cent. Though the appellants and others were thus expressly put on notice of the claim of the Electricity Board for payment of surcharge in the event of the appellants failing in their appeals in the Supreme Court, the appellants did not seek to get any clarification from the Supreme Court. The Supreme Court ultimately dismissed all the appeals on 25th March, 1964. Thereafter, the Electricity Board called upon the appellants and other consumers to pay surcharge at the rate of twelve per cent per annum on the arrears in regard to which they had obtained orders of injunction during the pendencey of the appeals in the Supreme Court. Once again, the appellants and others filed Writ Petitions in the High Court questioning the demand of the Electricity Board for payment of surcharge. The Writ Petitions were allowed by a learned single Judge of the High Court on the ground that no surcharge was livable for the period during which the order of injunction passed by the Supreme Court was in operation. The Andhra Pradesh State Electricity Board preferred appeals under clause 15 of the Letters Patent. They were allowed by a Division Bench first on the ground that the Andhra Pradesh Electricity Board was not bound by the injunction granted against the Government of Andhra Pradesh, and, second, on the ground that in any case, the injunction did not prevent the consumers from paying enhanced charges and that if they failed to pay enhanced charges they were under an obligation to pay surcharge under the terms of the agreement. A few of the consumers have preferred these two appeals to this Court.

(2.) Shri S. T. Desai and Shri Naunitlal, learned Counsel for the appellants argued that the appellants could not be penalized for non-payment of enhanced charges in the face of the order of injunction obtained by them. They argued that in view of the injunction no default had been committed by them. It was also said that the levy of surcharge was penal in nature and could not be enforced. It was further argued that the bills issued to them after the decision of the Division Bench of the High Court did not call upon them to pay the arrears and, therefore, there was no question of their becoming liable to pay any surcharge.

(3.) We do not see any substance in any of the submissions advanced on behalf of the appellants. The provision for payment of surcharge is contained in clause 9 of the agreement. The relevant paragraph of clause 9 is as follows:"Every consumer shall pay the bill amount within thirty days of the date of receipt of the Bill. In default of such payment he shall pay an additional charge of one percent on the amount of the bill for every month of delay or part thereof".