BALASORE ALLOYS LIMITED Vs. NORTH EASTERN ELECTRICITY SUPPLY

JUDGEMENT

(1.) IN this writ petition, petitioner no.1, namely M/s. Balasore Alloys Limited (hereinafter referred to as the "petitioner- company"), has prayed to quash the disconnection notice issued by the Executive Engineer, Central Electrical Division, Balasore, opposite party no.2, on 16.12.2011.

(2.) THE petitioner-company pleads that a disconnection notice under Section 56(1) of the Electricity Act, 2003 (hereinafter referred to as the "the Act" for brevity) read with Regulation 100 of the Odisha Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 2004 (hereinafter referred to as "the Code" for brevity) was issued demanding a sum of Rs.1,65,51,26,499/- as outstanding dues as on 16.12.2011. The petitioner- company pleads that in the year 2004, the petitioner-company and opposite party no.1, North Eastern Electricity Supply Company of Odisha Ltd. (hereinafter referred to as "the NESCO" for brevity), mutually decided to settle the old outstanding dues by way of one time settlement. After series of negotiations and discussions, it was agreed that the arrear dues payable by the petitioner-company to the NESCO would be Rs.3885.98 lacs as on 31.12.2004. The petitioner-company was required to deposit the said amount in twenty monthly instalments. It was further agreed that the petitioner-company shall deposit an amount of Rs.480 lacs towards additional security deposit in nine monthly instalments. The aforesaid decisions were recorded in the minutes of discussion dated 31.1.2005 and signed by the authorized officers of the parties. It is further pleaded by the petitioner-company that in accordance with the aforesaid minutes of discussion, it started making payment of the first ten monthly instalments as per the schedule indicated in the minutes of discussion. However, in view of the recession in the international market, the petitioner- company could not pay the balance ten instalments and requested the NESCO to defer payment of the balance amount for a period of twelve months. While matter stood thus, the petitioner-company on 20.11.2006 and 30.11.2006 paid two further instalments which were duly received by the NESCO. In the meantime the petitioner company deposited the entire additional security amount of Rs.480 lacs in accordance with the schedule set out in the minutes of discussion dated 31.1.2005. The petitioner-company after having paid twelve monthly instalments requested the NESCO to re-schedule the repayment dates and the balance dues and on consideration of the same, on 31.8.2007 the Chief Executive Officer, NESCO, opposite party no.3, extended the due dates for payment of the balance eight installments subject to the condition that the petitioner-company opens a letter of credit in a scheduled/nationalized bank at Balasore for an amount of Rs.16 crores which would cover the balance eight months instalments payable. It is, therefore, pleaded by the petitioner company that the decision taken by opposite party no.3 on 31.8.2007 in effect superseded and/or modified the dates of payment of instalments set out in the minutes of discussion dated 31.1.2005. Pursuant to the letter dated 31.8.2007 of opposite party no.3, on 4.9.2007, 5.10.2007, 6.11.2007, 7.12.2007, 7.1.2008, 13.2.2008, 14.3.2008 and 17.4.2008 the petitioner company paid the balance outstanding dues of Rs.16 crores in eight installments through letter of credit. It paid the aforesaid balance outstanding dues of Rs.16 crores to NESCO in addition to the monthly energy bills. After payment of the first instalment of Rs.2 crores as per the terms and conditions of the letter dated 31.8.2007 of opposite party no.3, the arrear was reduced to the tune of Rs.80 crores approximately by NESCO in the energy bills w.e.f. the month of August, 2007. Hence the NESCO accepted the terms and conditions of minutes of discussions between the NESCO and the petitioner- company dated 31.1.2005 by way of revising the energy bill. While the matter stood thus, all on a sudden on 1.11.2010, the NESCO issued the energy bill to the petitioner-company for the month of October, 2010 indicating Rs.160,10,82,840/- as the amount due within rebate, wherein it is alleged, the NESCO illegally and arbitrarily added a sum of Rs.148,21,98,339.28 as the arrear amount, even though the dispute was settled and the entire settled outstanding amount paid by the petitioner- company. On 16.12.2010, opposite party no.2 issued a disconnection notice directing the petitioner-company to pay a sum of Rs.159,79,30,200.00 as the outstanding dues up to November 2010. The said disconnection notice was challenged by the petitioner company before this Court vide W.P.(C) No.120 of 2011 which was disposed of on 5.1.2011 giving liberty to the petitioner to approach the Grievance Redressal Forum (for short "the GRF") and protected the petitioner-company from disconnection for a period of four weeks.

(3.) IN course of hearing, it also transpires that the plant of the petitioner- company at Balgopalpur was set up in the year 1984. Since inception it was receiving power from Odisha State Electricity Board. Latter on it was supplied with electricity by GRIDCO and now electricity is being supplied by the NESCO. An agreement was entered into on 31.1.1991 for supply of 28,000 KVAS of uninterrupted power on terms and conditions as stipulated in the said agreement and now the petitioner- company is availing 44,000 KVA of power from the NESCO. Learned counsel for the petitioner-company, in course of hearing, placed much reliance on the fact that a sum of Rs.80,77,19,560.07 has been shown to be provisionally withheld by the NESCO in their energy bill dated 01.11.2010 and on several occasions. It is argued that by virtue of Sub-section (2) of Section 56 of the Act since this amount has not been continuously shown to be outstanding and recoverable from the petitioner-company, the NESCO debarred from issuing a disconnection notice against the petitioner company claiming such amount as arrear. The NESCO has filed a counter affidavit, inter alia, pleading that