Mahesh Chander Sharma & Anr vs Union Territory Of J&K & Ors
2021 Latest Caselaw 618 j&K

       IN THE HIGH COURT OF JAMMU AND KASHMIR
                      AT JAMMU

                      (THROUGH VIRTUAL MODE)


                                                Reserved on: 01.06.2021
                                              Pronounced on:16 .06.2021

                        WP(C) No.970/2020
                   CM Nos.2398/2020 & 2399 of 2020


MAHESH CHANDER SHARMA & ANR.                       ...PETITIONER(S)

          Through: Mr. Rameshwar P. Sharma, Sr. Adv. with Mr.
                   Rohit Gupta, Advocate.

                                  Vs.

UNION TERRITORY OF J&K & ORS.                     ....RESPONDENT(S)

          Through: Mr. F. A. Natnoo, AAG.


CORAM: HON'BLE MR. JUSTICE SANJEEV KUMAR, JUDGE

                                 JUDGMENT

1) Petitioner No.1 is a consumer of electric energy supplied by the

respondents and is identified by consumer ID No.0101020005173 and

Installation No.GHB/1974. He claims to have executed a lease deed in

favour of petitioner No.2 qua the premises situated in Khasra No.360/361

Opposite Bakshi Nagar, Pulli Akhnoor Road, Jammu, where the subject

electric connection has been sanctioned by the respondents for a load of

5KV-90KV (commercial). As is apparent from the documents on record,

it is a three phase and four wire connection sanctioned by the respondents

in favour of the petitioners for the aforementioned commercial load.

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2) The petitioners are aggrieved and have assailed the monthly bill of

supply of electricity raised by the respondents for the month of January,

2020.

3) It is the contention of the petitioners that right from the year 2016,

when the sanction was accorded for revision of load of 05 KV to 90KV,

the petitioner No.1 has been regularly paying the electricity bills as raised

by the respondents every month and has not committed a single default in

clearing the electricity bills qua the connection in question. However, the

petitioner No.1 was astonished to see the bill for the month of January,

2020, with an opening balance of Rs.17,00,556.00 in addition to the

monthly bill of Rs.74,249.00. The petitioners claim that on receipt of this

highly excessive and inflated bill, the petitioners represented to the

respondents for rectification of the bill but no action in this regard was

taken. The petitioners were even threatened of disconnection of the

electricity supply if they failed to deposit the bill amount.

4) The petitioners have assailed this impugned bill issued by the

respondents for the month of January, 2020, on the ground that there has

never been any default in payment of the electricity bills which the

petitioners have been depositing regularly every month and, therefore, the

demand for the arrears amounting to more than Rs.17.00 lakhs included in

the monthly bill of January, 2020, is totally arbitrary, illegal and uncalled

for.

5) The impugned bill has also been assailed on the ground that the

respondents, before working out the excess charges of electricity supply

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and making a demand thereof never put the petitioners on notice and,

thus, violated the principles of natural justice. It is argued that the

petitioners were never made aware as to the basis of such exorbitant and

inflated bill indicating some past arrears running into lakhs.

6) Learned counsel for the petitioners, Mr. R. P. Sharma, placed

strong reliance on Section 126 of the Electricity Act, 2003 and submitted

that the procedure laid down in Section 126 with regard to assessment of

electricity charges payable by the petitioners has not been adhered to at all

and, therefore, the impugned bill, in so far it pertains to the arrears on

account of electricity charges, is not sustainable in law.

7) Per contra, learned counsel for the respondents took this Court to

the objections filed to the maintainability of the writ petition on behalf of

respondent No.1 to 5. He referred to Section 24 to 26 of the Electricity

Act and, in particular, placed reliance on Rule 16 of the Indian Electricity

Rules, 1956 to put across his argument that in the face of an alternative

and efficacious statutory remedy being available to the petitioners, the

resort to extraordinary jurisdiction of this Court was not permissible.

8) Learned counsel for the respondents would further point out that

the case of the petitioners is not one relatable to assessment made under

Section 126 of the Act but is only by way of correction of an error

committed by the respondents while working out the electricity charges

for the supply made to the petitioners.

9) The stand of the respondents is reflected in para 4 of the objections,

which, for facility of reference, is reproduced here-under:

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"....it is submitted that the petitioners are bound to pay the demand charges of Rs. 18,00,939/- (Rupees Eighteen lakhs nine hundred and thirty nine only) as it has been found during inspection that the billing being done to the petitioners was quite less since the Multiplying Factor being applied only @ 1, however, the (Multiplying Factor had been three times the Unit i.e. (multiplied by 3), but the excess charges have not been charged from January, 2016, but only previous 24 months have been charged keeping in view the departmental policy. The petitioners are bound to pay the charges for excess energy consumed by them since the same has cause huge loss to the public exchequer and the billed amount is perfectly legal and there is no flaw/arbitrariness in the said bill."

10) In short, the argument of learned counsel appearing for the

respondents is that the actual energy consumption of the petitioners for

the month of January, 2020, is only Rs.74,348.66, whereas the amount of

Rs.15,48,260/ has been imposed as short assessment made by the

respondents due to applying of wrong multiplying factor. It is pointed out

that it was during the inspection conducted by third party i.e. M/S Yadav

Measurements Pvt. Ltd. on the directions of the Government, it came to

light that since the petitioners had been sanctioned a three phase

connection, as such, the units were required to be calculated with a

Multiplying Factor of (3) whereas the respondents had been applying the

Multiplying Factor of (1). It is on account of this discrepancy pointed out

by the Inspection Agency, corrective measures were taken and bills for

last 24 months were reworked and recalculated. This happened in many

similarly situated cases. It is not the case of the petitioners that the

petitioners above have been chosen for differential treatment.

11) Having heard learned counsel for the parties and perused record, I

am of the view that the impugned bill, in so far it pertains to the arrears

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worked out by applying the multiplying factor (3) as per the report of

independent Inspection Agency, cannot sustain in law.

12) Admittedly, the petitioners are not at fault in any manner. It is not

the case of the respondents that the petitioners from the date of sanction of

the electricity connection in their favour, have ever defaulted in payment

of electricity bills raised by the respondents on month to month basis. The

error, which the respondents allege to have been committed by the

officials of the department, is also not in any manner attributed to the

petitioners. As a matter of fact, it is the case of the respondents that due to

a bona fide mistake or lack of knowledge, the respondent department had

been applying the multiplying factor (1) whereas the actual multiplying

factor applicable was (3). And it was so pointed out for the first time by

an independent Inspection Agency appointed by the Government to

inspect all important installations. This Court is not saying even for a

minute that the respondents are not within their right to correct the errors

of fact, if any, made by them. Going by the stand of the respondents, it is

evident that they have acted upon the inspection report submitted by an

independent agency appointed by the Government and have come to

know that in case of three phased connection, the units consumed at a

particular installation are required to be calculated with multiplying factor

(3).

13) Be that as it may, the question remains that was it not incumbent

upon the respondents to put petitioners to notice, supply them the report

of the Inspection Agency also the basis for revision of paid electricity

bills. If the answer to this question is in affirmative, then the impugned

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bill clearly gets vitiated being issued in violation of principles of natural

justice. Had the petitioners been heard in the matter, given an adequate

opportunity to rebut claim of the respondents, it is possible that they could

have legitimately contradicted the stand of the respondents and persuaded

them not to revise the bills simply on the basis of observations made by

the Inspection Agency. In the absence of report of Inspection Agency

made available to the petitioners and in the absence of making the

petitioners known of the formula applied for working out the impugned

bill, there was no occasion or opportunity for the petitioners to explain

their position or contradict the findings of the Inspection Agency and the

respondents. I, therefore, find the impugned bill in flagrant violation of

principle of audi alteram partem.

14) After the judgment of A. K. Kraipak v. Union of India. (1969) 2

SCC 262, a thin line of distinction between an administrative power and a

quasi judicial power is virtually obliterated. In paragraph 20 of A. K.

Kraipak (supra), the Supreme Court held thus:-

"20. The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law of the land but supplement it. The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules namely: (1) no one shall be a judge in his own case (Nemo debet esse judex propria causa) and (2) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasi- judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules added to the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially there

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was no room for the application of the rules of natural justice. The validity of that limitation is now questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice, one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasi-judicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have far more reaching effect than a decision in a quasi-judicial enquiry. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that purpose. Whenever a complaint is made before a court that some principle of natural justice had been contravened the court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case."

15) The principles of natural justice have been designed to ensure

fairness in action by the State and public bodies and, therefore, an

important facet of Article 14 of the Constitution of India. One of the

principles of natural justice i.e. the principle of audi alteram partem has

been explained by the Supreme Court in numerous judgments handed

down by the Supreme Court from time to time. Mohinder Singh Gill v.

Election Commission of India, (1978) 1 SCC 405, Smt. Maneka

Gandhi v. Union of India, AIR 1978 SC 597 and Swadeshi Cotton

Mills v. Union of India, AIR 1981 SC 818, Union of India v. Tulsiram

Patel, (1985) 3 SCC 398 to cite the few.

16) In paragraph No.95 and 96 of Tulsiram Patel (supra), the Supreme

Court beautifully concertized law on the subject, which, for facility of

reference, are reproduced hereunder:-

CM Nos.2398 and 2399 of 2020

"95. The principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation given by this Court to the concept of equality which is the subject-matter of that Article. Shortly put, the syllogism runs thus violation of a rule of natural justice results in arbitrariness which is the same as discrimination; where discrimination is the result of state action, it is a violation of Article 14: therefore, a violation of a principle of natural justice by a State action is a violation of Article 14. Article 14, however, is not the sole repository of the principles of natural justice. What it does is to guarantee that any law or State action violating them will be struck down. The principles of natural justice, however, apply not only to legislation and State action but also where any tribunal, authority or body men, not coming within the definition of "State" in Article 12, is charged with the duty of deciding a matter. In such a case, the principles of natural justice require that it must decide such matter fairly and impartially.

The rule of natural justice with which we are concerned in these Appeals and Writ Petitions, namely, the audi alteram partem rule, in its fullest amplitude means that a person against whom an order to his prejudice may be passed should be informed of the allegations and charges against him, be given an opportunity of submitting his explanation thereto, have the right to know the evidence, both oral or documentary, by which the matter is proposed to be decided against him, and to inspect the documents which are relied upon for the purpose of being used against him, to have the witnesses who are to give evidence against him examined in his presence and have the right to cross-examine them, and to lead his own evidence, both oral and documentary, in his defence. The process of a fair hearing need not, however, conform to the judicial process in a court of law, because judicial adjudication of causes involves a number of technical rules of procedure and evidence which are unnecessary and

CM Nos.2398 and 2399 of 2020

not required for the purpose of a fair hearing within the meaning of audi alteram partem rule in a quasi-judicial or administrative inquiry. If we look at clause (2) of Article 311 in the light of what is stated above, it will be apparent that clause is merely an express statement of the audi alteram partem rule which is implicitly made part of the guarantee contained in Article 14 as a result of the interpretation placed upon that Article by recent decisions of this Court. Clauses (2) of Article 311 requires that before a government servant is dismissed, removed or reduced in rank, an inquiry must be held in which he is informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges. The nature of the hearing to be given to a government servant under clauses (2) of Article 311 has been elaborately set out by this Court in Khem chand's case in the passages from the judgment extracted above. Though that case related to the original clause (2) of Article 311, the same applies to the present clause (2) of Article 311 except for the fact that now a government servant has no right to make any representation against the penalty proposed to be imposed upon him but, as pointed out earlier, in the case of Suresh Koshy George v. The University of Kerala and others, such an opportunity is not the requirement of the principles of natural justice and as held in Associated Cement Companies Ltd. v. T. C. Shrivastava and others neither the ordinary law of the land nor industrial law requires such an opportunity to be given. The Opportunity of showing cause against the proposed penalty was only the result of the interpretation placed by the Judicial Committee of the Privy Council in Lall's Case upon section 240(3) of the Government of India, 1935, which was accepted by this Court in Khem Chand's Case. If, therefore, an inquiry held against a government servant under clause (2) of Article 311 is unfair or biased or has been conducted in such a manner as not to give him a fair or reasonable opportunity to defend himself, undoubtedly, the principles of natural justice would be violated, but in such a

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case the order of dismissal, removal or reduction in rank would be held to be bad as contravening the express provisions of clause (2) of Article 311 and there will be no scope for having recourse to Article 14 for the purpose of invalidating it."

17) From the aforesaid enunciation of law, it is trite that the principles

of natural justice constitute basic element of fair hearing having their

roots in the innate sense of man for fair play and justice. The audi alteram

partem rule in its complete sense would mean that a person against whom

an order to his prejudice may be passed should be informed of the

allegation and charges against him, be given adequate opportunity of

submitting his explanation thereto both oral and documentary, and shall

have the right to know the material by which the matter is proposed to be

decided against him. Any action by the State or a public body which visits

a person with civil consequences is to be taken in compliance with the

principles of audi alteram partem. It is true that audi alteram partem rule

is not rigid and inflexible principle to be applied in all situations. As

rightly observed in Tulsiram Patel (supra) that they are not cast in a rigid

mould nor can they be put in a legal straight jacket. They do not apply in

the same manner to two situations, which are not alike. Their applicability

can be excluded by express words of statute or by necessary intendment.

Similarly, in the case of Smt. Maneka Gandhi (supra), it has been

observed that even where there is no specific provision for showing cause,

yet in a proposed action which affects the right of an individual, it is duty

of the authority to give reasonable opportunity of being heard. This duty

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is said to be implied to nature of functions to be performed by authorities

having power to take punitive or damaging action.

18) Delhi Transport Corporation v. DTC Mazdoor Congress, 1991

Supp. (1) SCC 600, is another Constitution Bench judgment, which

throws considerable light on the observance of principles of natural justice

in particular audi alteram partem rule. In the aforesaid case, it has been

held that the audi alteram partem rule, which, in essence, enforces the

equity clause of Article 14 of the Constitution, is applicable not only to

quasi judicial orders but to administrative orders affecting prejudicially

the party in question unless application of rule has been expressly

excluded by Act or regulation or rule. The rule of principles of natural

justice does not supplant but supplement the rules and regulations and it is

the demand of the rule of law, which permeates our constitution that the

rule is observed both substantially and procedurally. It is, thus, trite that

any action prejudicial to a citizen, which is taken by the State or public

authority without affording him an opportunity of being heard would be

unfair and arbitrary. An action which is unfair and arbitrary would fall

foul of rule of equality, which is soul and spirit of Article 14 of the

Constitution. It is only in exceptional cases like where there is no

prejudice caused to a person against whom an order is passed or the

compliance of principles of natural justice particularly the rule of audi

alteram partem, even if observed would not change the position and

would be a mere useless formality, its strict adherence is excluded.

19) Recently the Supreme Court in the case of State of U.P. v. Sudhir

Kumar Singh, 2020 SCC Online SC 847 elaborately dealt with the

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scope and applicability of audi alteram partem rule. Hon'ble the Supreme

Court after surveying the entire case law, in paragraph No.39 held thus:-

"39. An analysis of the aforesaid judgments thus reveals:

(1) Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused.

(2) Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest.

(3) No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge or non-denial or admission of facts, in cases in which the Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice.

(4) In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass futile orders of setting aside or remand when there is, in fact, no prejudice caused. This conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person.

(5) The "prejudice" exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite

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inference of likelihood of prejudice flowing from the non- observance of natural justice.

20) Applying the aforesaid principles to the instant case, it is

abundantly clear that the impugned bill has resulted in serious breach of

audi alteram partem rule in its entirety. The petitioners have been

condemned unheard and the impugned order has visited them with serious

civil consequences. Had the respondents put the petitioners on notice and

supplied them all the material relied upon for drawing the bill impugned,

the petitioners would have got an opportunity to explain, rebut or

contradict the same. A serious prejudice has been caused to the petitioners

by denying them an opportunity of being heard and by passing an ex-parte

order. As is apparent from reading of the averments made in the writ

petition, the petitioners have set up a fairly probable case in their defense

but have been disabled to put it up before the respondents because of

unilateral and behind the back action of the respondents. I have, therefore,

no doubt in my mind that in the instant case by not complying with the

audi alterlam partem rule, the respondents have caused serious prejudice

to the petitioners and have acted in a manner, which is unfair and arbitrary

and, therefore, violative of Article 14 of the Constitution.

21) In the instant case, the petitioners have been held liable to a huge

amount running into lakhs and they are not even aware of the basis

therefor. Plea of the respondents that there is an alternative remedy

available under the Act would pale in insignificance. It is now well settled

that if an order is in flagrant violation of principles of natural justice, the

same is amenable to challenge under Article 226 of the Constitution of

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India, availability of equally efficacious statutory remedy

notwithstanding. Reference in this regard is invited to para 15 of the

judgment of the Supreme Court in the case of Whirlpool Corporation

vs. Registrar Of Trade Marks, Mumbai & Ors.(1998) 8 SCC 1, which,

for facility of reference, is reproduced as under:

"Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field."

22) It is, thus, trite that normally where a statute itself prescribes a

remedy, resort must be had to that particular statutory remedy before

invoking the extraordinary writ jurisdiction of the High Court and the

High Court while exercising its writ jurisdiction under Article 226 of the

Constitution may decline to grant relief in the writ petition until such

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statutory remedy is exhausted. This rule of exhaustion of statutory remedy

is, however, a rule of policy, convenience and discretion and not a rule of

law nor does it bar jurisdiction of the High Court in granting relief in an

appropriate case and in exceptional circumstances. Violation of principles

of natural justice is one such appropriate case where exception is to be

taken to the general rule. This is what has been put succinctly by the

Supreme Court in Whirlpool Corporation (supra).

23) In the given facts and circumstances where the petitioners have

been slapped with a huge electricity bill running into lakhs without even

giving them an opportunity of being heard, relegating the petitioners to

the alternative remedy available under the Act would be a travesty of

justice.

24) Equally ill founded is the argument of learned counsel for the

petitioners that the respondents have not adhered to the provisions of

Section 126 of the Electricity Act for making assessment.

25) From a bare reading of Section 126 of the Act, it clearly transpires

that the Section applies to a case where a consumer is found to have

indulged in unauthorized use of electricity. In the instant case there is no

allegation of unauthorized use of electricity or theft of electricity supply

by the petitioners for which they need to be assessed under Section 126 of

the Act.

26) For the foregoing reasons, I find merit in this petition and,

accordingly, the same is allowed. The impugned bill in so far it pertains to

the demand of Rs.17,00,556.00, is quashed. The petitioners shall,

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however, deposit the monthly bill for the month of January, 2020, as also

for the subsequent months within a period of one month without any fail.

27) Notwithstanding that this Court has quashed the impugned bill to

the extent aforesaid, the respondents shall be free to proceed in the matter

for recovery of excess load charges, if any, after providing an adequate

opportunity of being heard to the petitioners and to present their case

before the respondents. Needless to say that providing of adequate

opportunity to the petitioners would mean supplying them all the requisite

documents including inspection report and the basis of applying the

multiplying factor of (3) to the case of the petitioners and then passing a

speaking order after taking into consideration the reply, if any, submitted

by the petitioners.

(Sanjeev Kumar) Judge Jammu 16.06.2021 "Bhat Altaf, PS"

                   Whether the order is speaking:         Yes
                   Whether the order is reportable:       Yes

Judgment pronounced today on 16.06.2021 in terms of Rules 138 (3) of

the Jammu and Kashmir High Court Rules, 1999.

(Javed Iqbal Wani) Judge