CESC LTD Vs. HE MAN DUCTILE IRONS LTD

JUDGEMENT

(1.) By the impugned order, the learned Single Judge has directed the respondents/writ petitioners to execute a bank guarantee by 9th of June, 2009 to the tune of Rs.11,00,000/- to be renewed from time to time till disposal of the writ petition. In default, CESC Ltd. will be within its right to take appropriate steps including disconnecting the electric line. This order has been challenged by the CESC Ltd. on the ground that the entire amount ought to be secured by directing the writ petitioners to deposit 50% of the amount due in cash and not through a bank guarantee. Mr. Anindya Mitra, learned Senior Counsel appearing with Mr. Utpal Bose, learned Counsel submits that the issue with regard to the kind of security that is required in cases such as this has been settled by the Supreme Court in the case of W. B. State Electricity Board v. Fakir Chand Rice Mills & Ors., reported in 1996 (8) SCC 647. In that case the Supreme Court has clearly observed that when the Electric Supply Company is obligated to supply electrical energy to the consumer, an equal obligation has to be cast on the consumer to pay the amount subject to determination of controversy in the, suit.

(2.) On the other hand, Mr. S.N. Mitra, learned Counsel appearing for the respondents/writ petitioners submits that furnishing of bank guarantee as directed by the learned Single Judge would be sufficient security for the claim made by the appellant / CESC Ltd. Learned Counsel also submitted that the rights of the parties have not been adjudicated at this stage. At the time of the final hearing of the writ petition, the writ petitioners would be able to demonstrate that the demand made by the appellant is palpably erroneous. In fact, it relates to periods other than the period which was the subject-matter of the appeal before the appellate authority. The controversy only related to December 2001. The appellate authority had, however, determined the liability for the period commencing from 25th October, 2001 to 29th April, 2002. It was upon taking into consideration these facts and circumstances that the learned Single Judge had directed that it would be sufficient if security was furnished by way of bank guarantee only. Learned Counsel further submitted that it would be wholly inequitable if the writ petitioners are directed to furnish security for an amount which would not be due in accordance with law. Merely, because the appellant has raised a demand notice, which is without the sanction of law, the same would not entitle them to claim security, let alone insist on cash deposit. Learned Counsel further submitted that the judgment in the case of W.B. State Electricity Board (supra) is not applicable in the facts and circumstances of this case. In the present case, the rights of the parties have not been adjudicated by any judicial authority thus far. In the case before the Supreme Court, the matter had been adjudicated by the trial Court, Appeal Court and the High Court, in revision.

(3.) We have considered the submissions made by the learned Counsel. We are of the opinion that the judgment of the Supreme Court in the case of W. B. State Electricity Board (supra) would be applicable in the facts and circumstances of this case. Since it is only a short judgment we are reproducing the same in its entirety.