Vidyasagar Institute Of Mental ... vs Delhi Vidyut Board
2001 Latest Caselaw 107 Del

JUDGMENT

Madan B. Lokur, J.

1. The Plaintiffs have filed a suit for the recovery of almost Rs.95 lakhs from the Defendant. According to the Plaintiffs, they are running a state of the art speciality hospital to provide proper treatment to persons suffering from mental diseases. The hospital naturally requires electricity but since the existing load was insufficient, the Plaintiffs applied for the grant of 500 KW (High Tension or HT load) on 12th September, 1994 but the same was made available to the Plaintiffs by the Defendant only on 14th May, 1998.

-: # :- IA 10045/2000 in S.2204/2000

The Plaintiffs allege that apart from the normal bills for consumption of electricity, they were allegedly saddled with some other charges such as Low Tension (or LT), Lower Power Factor (or LPF) and Load Violation (or LV). These additional charges amounted to 60% of the electricity charges levied on the Plaintiffs. It is averred that in addition to the above levies, the Defendant has also demanded from the Plaintiffs a Late Payment Surcharge (or LPSC). Initially, Rs.39.5 lakhs was claimed but on 10th August, 2000 it was reduced to about Rs.35.8 lakhs.

2. According to the Plaintiffs, by letters dated 19th July, 2000 and 25th/26th July, 2000, the Defendant had kept the question of imposition of LPSC in abeyance. Notwithstanding this, on 27th July, 2000, the electricity supply of the Plaintiffs was disconnected by the Defendant. The electricity supply was, however, restored on 28th July, 2000 "after Plaintiff No.1 paid an amount of Rs.14.91 lacs on account of current electricity charges." (paragraph 16 of the plaint). The electricity supply was again discontinued on 29th August, 2000 without giving any details of the accounts which were given only on 30th August, 2000. Objections to the statement of accounts was filed by the Plaintiffs on 12th September, 2000. In the meanwhile, the electricity supply to the Plaintiffs was restored by the Defendant on 1st September, 2000 after the Plaintiffs paid an amount of Rs.10 lakhs on account of LPSC and gave an undertaking to pay the balance amount of Rs.25 lakhs in six monthly Installments.

3. The Defendant filed its written statement denying the allegations of the Plaintiffs. It averred that the delay in providing the HT load is attributable to the Plaintiffs. It is also stated that the amounts demanded from the Plaintiffs are in accordance with law.

4. The Plaintiffs filed I.A.No.10045 of 2000 praying for an injunction restraining the Defendant from disconnecting the electricity supply of the Plaintiffs till the disposal of the suit. The intent of the Plaintiffs is not to pay the balance amount of about Rs.25 lakhs (now about Rs.21 lakhs) towards LPSC which, according to the Plaintiffs is illegal and in any case is not leviable.

5. Learned counsel for the parties made their submissions on the interim application on 13th December, 2000 when orders were reserved.

6. At the outset, it must be stated that the dispute between the parties is only a money dispute. Therefore, even if the Plaintiffs are called upon to pay the LPSC, no irreparable harm or injury would be caused to them. If ultimately it is found that the Plaintiffs were not obliged to deposit the LPSC charges, the amount deposited by them can always be directed to be returned with interest. For this reason itself, the application for injunction deserves dismissal. However, since the application was also argued on merits, I think it would be appropriate to consider the issues raised on merits also.

7. According to learned counsel for the Plaintiffs, as per the Office Order dated 5th October, 2000 no interest could be charged on the reducing balances since the Plaintiffs had been granted Installments for payment of LPSC. In support of this contention, learned counsel for the Plaintiffs also placed reliance upon a noting made on a letter sent by them on 9th December, 1998 to contend that earlier, in the case of these very Plaintiffs, a decision had been taken not to charge interest if payment in Installments is granted.

8. To understand this contention, it is necessary to read what the Office Order dated 5th October, 2000 actually says. This Office Order reads as follows:-

"Reference Office Order No.M(F)98-99/4/243 dated 6th August, 1998. It is hereby clarified that once Installments are allowed, the question of interest on reducing balances should not arise since the amount is not yet overdue. Allowing Installments amounts to extending the time for payment of the balance and hence no interest be charged on reducing balances where Installments have been allowed by the competent authority."

Similarly, the letter dated 9th December, 1998 reads as follows:-

"We, from Vimhans, have a very genuine grievance about DVB.

We are limiting our presentation in respect of our Rural Field Outreach Health Care Centre in Village Saidul Ajaib, District Mehrauli. DVB had agreed that we can pay this amount in six Installments. Most unfortunately, DVB, even though it has given 20 months cumulative bill, they have charged a large amount as interest charges. This is not due at all.

Our case has been recommended view by Additional Chief Engineer Shri Bahl. We wish to have the favorable decision immediately. Please help us with your imitable efficiency and kindness.

Best wishes & kind regards."

The noting on this letter reads as follows:-

"I am convinced that in case of an accumulated bill and payment in Installments, the interest charges are not payable."

9. A perusal of both the documents mentioned above shows that none of them make any reference to the payment of LPSC. On the contrary, from the letter dated 9th December, 1998 it appears that a cumulative bill for consumption of electricity for a period of 20 months was given to the Plaintiffs. On this amount, the Plaintiffs were given the facility of making the payment in Installments. It is in this context that the noting is made to the effect that interest charges are not payable.

10. When the injunction application was heard on 20th November, 2000, a learned Single Judge of this Court directed the Defendant to file an affidavit with regard to the Office Order dated 5th October, 2000. The Defendant filed an affidavit stating that the word "Installment" means the Installment granted for payment of bills. The amount that the Plaintiffs agreed to pay on 1st September, 2000 is not in respect of any monthly bill but is in respect of LPSC and, therefore, the Office Order dated 5th October, 2000 is not applicable. It is also stated in the affidavit that in any case, when the Plaintiffs were earlier allowed to make the payment of monthly bills in Installments, they failed to adhere to their commitment.

11. The payment of LPSC is not a payment towards monthly bills. As its nomenclature suggests, it is in the nature of a penalty levied on a consumer for late payment of the monthly bills. The Defendant, as per its understanding, does not charge interest on reduced balances when Installments have been allowed for payment of monthly bills. This is because once Installments have been offered and accepted, it can be said that even though payment is due, its receipt is postponed. It is in these circumstances that interest is not charged on the reduced balances.

12. Payment of LPSC is qualitatively different. It is a penalty required to be paid when imposed. If its payment is deferred, the only benefit that can be inferred is in the extension of time for payment. No other benefit can be assumed and no other benefit can be claimed, unless the benefit is expressly stated. Otherwise, its character as a penalty disappears. In the present case, the Defendant has not expressly (or even impliedly) waived any disability which is concomitant with the levy of a surcharge. As such, the Plaintiffs cannot seek to have the LPSC reduced in any indirect manner.

13. Looked at from this point of view, it cannot be said that the understanding of the Defendant in regard to the meaning of the word `Installment' as referring only to the monthly bills and not to LPSC is either unreasonable or unintelligible.

14. The issue can be looked at in another manner. In the case of the Plaintiffs, there appears to be a default in payment of the monthly bills (although this is denied by them). This seems to be so from the admission of the Plaintiffs in paragraph 16 of the plaint. It is because of such late payments that a surcharge was levied on the Plaintiffs. The surcharge seems to have accumulated over a period of time with the result that it became a huge amount of about Rs.35 lakhs. The Plaintiffs could not afford to pay such a huge amount in a lump sum and so they approached the Defendant for making the payment in Installments. This request of the Plaintiffs was acceded to by the Defendant.

15. In a sense, the Plaintiffs had defaulted twice over: originally, in not paying the monthly bills in time and thereafter in not paying the LPSC when demanded. For the payment of LPSC the Plaintiffs wanted a relaxation by making the payment in Installments. That this was agreed to by the Defendant on 1st September, 2000 on certain terms and conditions cannot be doubted. If the terms and conditions laid down by the Defendant were either not acceptable or were onerous in so far as the Plaintiffs were concerned, they should not have accepted the offer given by the Defendant on 1st September, 2000. Having accepted the offer and derived some benefit from it (namely, restoration of the electricity supply), the Plaintiffs cannot now seek to change or modify that offer to make it more acceptable to them. The principles of estoppel will clearly apply. The Plaintiffs say that they were left with no option but to accept the offer made by the Defendant. They overlook the fact that they created a situation whereby they left themselves with no option but to accept the offer of the Defendant.

16. It was then contended by learned counsel for the Plaintiffs that LPSC is charged at 3% per month and this is exorbitant. Reliance in this regard was placed upon an Office Order issued by the Defendant on 10th March, 1999. The Office Order was on the subject "Guidelines for processing of cases/matters presenting before the Conciliatory Authority for Out of Court settlement."

17. It appears that a Committee was constituted for settling disputes out of Court between the Defendant and its consumers. This Committee identified some of the most common areas of disputes. Thereafter, the Committee laid down guidelines for settlement of such disputes. The Defendant by a resolution dated 17th February, 1999 approved these guidelines.

18. With regard to LPSC, it was stated that the rate of interest at 3% per month (36% per annum) "is considered too exorbitant. Henceforth, the LPSC will be at 2% for every 30 days on the principal amount of the bill raised after the due date of payment in case of consumers other than domestic and agriculture." As a special drive to collect pending arrears, it was also decided to give a one time relaxation by reduction of LPSC to 50% on all categories of private consumers if the entire outstanding dues are paid by 31st March, 1999.

19. In view of this decision taken by the Defendant, it is difficult to accept the contention of learned counsel for the Defendant that the levy of 3% per month can be reduced only if the consumer agrees to an out of Court settlement. Such a narrow and constricted meaning cannot be given to this decision, which is itself unqualified. Otherwise, similar kinds of decisions will enable the Defendant to raise exorbitant demands and compel their consumers to either resort to litigation or accept an out of Court settlement on terms to be decided by the Defendant. This cannot be the intention of the Office Order. Moreover, it has been categorically opined (which opinion has been accepted) that the rate of LPSC at 36% per annum is exorbitant and that the same will henceforth be charged at the rate of 2% for every 30 days on the principal amount of the bill raised after the due date of payment.

20. I, therefore, think that learned counsel for the Plaintiffs is right in his contention that the Defendant should not, and cannot, charge LPSC at the rate of 3% per month after 17th February, 1999 which is the date of the resolution accepting the guidelines.

21. Learned counsel for the Plaintiffs also contended that the Defendant had come out with an amnesty scheme as advertised in the newspapers. He says that since the LPSC was intimated to his client only on 1st September, 2000, his client could not avail the amnesty scheme which initially expired on 30th April, 2000 but was later extended up to 15th May, 2000.

22. That payment against LPSC was due and known to the Plaintiffs even earlier is evident from a letter dated 10th August,2000 sent by the Defendant to the Plaintiffs. This letter is as follows:-

"Kindly refer to your various representations to Chairman, DVB regarding reconciliation of the accounts ...

The total payable LPSC amount up to 31.7.2000 is Rs.35,79,050.12. You are requested to arrange for payment of the outstanding amount as per commitment already undertaken by you while restoration of supply on 29.7.2000."

Two things are clear from this letter. Firstly, that correspondence had been going on between the parties for quite some time ("various representations") on reconciliation of accounts, which appears to include LPSC. Secondly, the Plaintiffs had earlier also committed to pay LPSC but did not do so.

23. If the Plaintiffs were actually serious of availing the amnesty scheme (which is also incidentally mentioned in the Office Order dated 10th March, 1999 mentioned above), then the Plaintiffs could have followed up the matter from time to time and obtained the outstanding LPSC and made the payment to the Defendant after availing the amnesty scheme which was initially in force up to 31st March, 1999. Similar schemes were introduced later on also as mentioned by learned counsel for the Plaintiffs. The Plaintiffs, it appears, were not at all interested in settling the matter with the Defendant and, therefore, did not seriously attempt to obtain the benefit of the later amnesty scheme.

24. If the LPSC was intimated to the Plaintiffs only on 1st September, 2000, as contended by learned counsel for the Plaintiffs, and if the scheme had in any case expired by 15th May, 2000, the Plaintiffs cannot seek to have the amnesty scheme applied to them retroactively. If the contention of learned counsel for the Plaintiffs is correct that in the normal course the LPSC was intimated to him only on 1st September, 2000, then the Plaintiffs had already missed the bus and cannot complain about this.

25. There is, therefore, no force in the submission of learned counsel for the Plaintiffs in either of the two situations which arise. The Plaintiffs cannot seek to derive any benefit of the amnesty scheme at this belated stage.

26. In fact, this position was made clear to the Plaintiffs by the Defendant in its letter dated 7th July, 2000 wherein it is specifically mentioned that "M/s Vimhans did not avail the amnesty, nor did it do so on earlier occasions when similar amnesty schemes were announced, despite our specific advise to do so." The blame lies entirely on the Plaintiffs for this state of affairs.

27. The final contention of learned counsel for the Plaintiffs rested on a note apparently contained in some tariff rate. The relevant portion of this note reads as follows:-

"Connections sanctioned for dispensaries, hospitals ..... and small health centres approved by Directorate of Health Services, Government of NCT of Delhi for providing charitable services only ...... shall be billed at domestic category rates ......"

The contention of learned counsel for the Plaintiffs was that the hospital run by his clients was liable to pay electricity charges only as per domestic rates. Unfortunately, there is nothing on the record to suggest that the Plaintiffs are running a hospital for charitable services only. In the absence of any such material on record, the Plaintiffs cannot contend that they are liable to pay electricity charges only at domestic rates and not at the rates at which they are being charged.

28. Although I have come to the conclusion that the Plaintiffs have made out a prima facie case that LPSC being charged at 3% per month is exorbitant, I do not think that the Plaintiffs have made out any case for the grant of an injunction. This is because the amount can be quantified in terms of money and, as mentioned at the outset, the Plaintiffs can be duly compensated at the time of final disposal of the case.

29. Moreover, the balance of convenience does not lie in favor of the prayer of the Plaintiffs being granted. The Plaintiffs are not a charitable but a commercial organization. Expenses incurred on electricity dues and LPSC are a part of the commercial expenses. Such expenses are, by and large, recovered by commercial establishments from persons whom they are dealing with. It would,therefore, be reasonable to assume that the element of LPSC paid (or to be paid) by the Plaintiffs will be recovered from their patients. In any case, there is nothing on the record to suggest that the Plaintiffs are an exception to the general rule.

30. Consequently, I do not think that the injunction application filed by the Plaintiffs should be allowed. The same is, accordingly, dismissed.

31. It is made clear that any expression of views is only for the purpose of disposing of this application and will not have any binding force at the time of final disposal of the suit.