Madhya Pradesh High Court
M/S Dilip Buildcon Ltd. vs M.P. Madhya Kshetra Vidyut Vitaran ... on 4 July, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2025:MPHC-IND:16737
1 WP-20152-2022
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
ON THE 4 th OF JULY, 2025
WRIT PETITION No. 20152 of 2022
M/S DILIP BUILDCON LTD.
Versus
M.P. MADHYA KSHETRA VIDYUT VITARAN COMPANY LTD. AND
OTHERS
Appearance:
Shri Jagdish Baheti - Advocate for the petitioner.
Shri Madhusudan Dwivedi - Advocate for the respondent [R-1 and 2].
Shri Kunwar Sumersingh Chouhan - Advocate for the respondent [R-
6].
Shri Sudeep Bhargava - Dy. A.G. for respondent/State.
ORDER
Per: Justice Vivek Rusia
Petitioner has filed the present petition challenging the show cause
notice dated 05.03.2020, demand notice dated 25.02.2021 and recovery
notice dated 27.06.2022 issued by the respondents for recovery of sum of
Rs.139.92 lakhs towards the electricity dues arises out of difference in rates
which has been worked out by applying the amended Clause 4.43 of the M.P.
Electricity Supply Code, 2013. Since the aforesaid amendment has been
given retrospective effect vide notification dated 15.10.2015, the petitioner is
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challenging the constitutional validity by way of this petition. The petitioner-
company applied on 10.07.2014 for grant grant of HT electricity supply
connection for operation of Stone Crusher. The respondent No. 2 granted
approval for HT Power 33 KV connection vide letter dated 18.07.2014.
Thereafter an agreement was executed between the parties. By virtue of the
said connection, the respondent supplied electricity and the petitioner paid
the bill time to time. Vide letter dated 27.04.2017 the petitioner-company
surrendered the said electricity connection and thereafter the respondent
released the security deposit to the petitioner on 19.07.2017.
02. Vide Notification dated 15.10.2015, a Clause 4.43 of the
Electricity Supply Code was amended. On the basis of the said amendment,
the Audit Department of the respondent took an objection and the said
permanent connection which was given to the petitioner has been re-
classified as temporary connection and vide impugned notice, demand of
Rs.139.92 lakhs was made against the petitioner. Similar demands were
made to other companies/consumers and they approached this Court by way
of writ petitions. Writ Court allowed the bunch of writ petitions against
which the respondent-company preferred a Writ Appeal before this Court.
03. The issue involved in this petition has been put to rest by this
Court in W.A. No.1418/2022 (M.P. Paschim Kshetra Vidyut Vitran
Company Ltd. vs. Narmada Resources) & 2 other connected appeals & WA
No. 167/2023 (M.P. Paschim Kshetra Vidyut Vitran Company Ltd. & Ors.
vs. G.R. Infra Projects Ltd.) which has attained finality. The relevant paras
passed in the WA is mentioned as under:-
"4. The facts giving rise to filing of these appeals are
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that the appellants are the partnership firms and own a
stone crusher unit. The appellants had applied for
permanent electricity HT connection of 500 KVA. An
agreement was entered into between the parties on
30.06.2020. The requisite deposit and fees etc. have also
been deposited by the appellants at the time of
execution of the agreement. However, on the basis of
some report of the Comptroller and Auditor General of
India (CAG) conducted at different places, demand
notice was issued to the appellants, which was
challenged in the writ petitions whereby the appellants
were made liable to pay the amount as per audit
recovery and that the connections granted were treated
as temporary connection for billing purposes. The
learned single Judge while deciding the batch of writ
petitions held as under:-
"10] On due consideration of submissions
and perusal of the documents filed on record
as also the decision rendered by the Supreme
Court in the case of U.P. Power Transmission
Corporation Limited (Supra), this Court finds
that so far as the audit recovery on the basis
of the report of Comptroller and Auditor
General of India is concerned, the Supreme
Court in the aforesaid case has held as
under:-
"60. As observed above, UPPTCL demanded and partly
realized cess on the supply Contract, solely on the basis
of report of the CAG. In our considered view, in the
absence of any adjudication, it was impermissible for
UPPTCL to issue the impugned communication to
realize cess solely on the basis of the report of the
CAG.
61. In Centre of Public Litigation v. Union of India
reported in (2012) 3 SCC 1, this Court held that when
CAG report was subject to scrutiny of the Public
Accounts Committee and the Joint Parliamentary
Committee, it would not be proper to refer to to
findings and conclusions contained therein. In this
context, reference may also be made to the decision of
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this Court in Arun Kumar Agrawal v. Union of India
and Others reported in where this Court held:-
"56. CAG may be right in pointing out that
public monies are to be applied for the
purposes prescribed by Parliament and that
extravagance and waste are minimised and
that sound financial practices are encouraged
in estimating and contracting, and in
administration generally.
xxx xxx xxx
67. The question that is germane for
consideration in this case is whether this
Court can grant reliefs by merely placing
reliance on the CAG's Report. The CAG's
Report is always subject to parliamentary
debates and it is possible that PAC can accept
the ministry's objection to the CAG Report or
reject the report of the CAG. The CAG,
indisputably is an independent constitutional
functionary, however, it is for Parliament to
decide whether after receiving the report i.e.
PAC to make its comments on the
CAG's Report."
Emphasis
supplied.
11] In view of the above, this Court is of the considered
opinion that the aforesaid finding recorded by the
Supreme Court applies mutatis-mutandis to the facts of
the present case as well. It is also found that although
the demand has been raised by taking exception to the
agreement executed between the parties itself, holding
that the connection granted to the petitioner ought to
have been temporary in nature instead to permanent
but, till date even the aforesaid agreement has not been
repudiated by the respondents. It is also found that
although the petitioner is involved in the business of
stone crushing, but it cannot be said that the aforesaid
unit is for the construction purpose as the construction
purpose would mean, construction of buildings/power
plants etc. and for the purpose of setting up of industrial
units as is prescribed in Rule 4.43 of the M.P.
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Electricity Supply Code, 2013 which reads as under:-
"4.43 Any person requiring power supply for
purpose that is temporary in nature, may
apply for temporary power supply for a
period of less than two years in the Form as
required by the Licensee. The period of
temporary connection can be extended up to
five years for construction of
buildings/power plants and for the purpose of
setting up of industrial units. Requisition for
temporary supply shall normally be given 7
days before the day when supply is required
for loads up to 10 kW and 30 days before for
higher the said loads Under no
circumstances, permanent connection be
allowed for construction purposes."
12] It might be that the need of the petitioner was
temporary, but as the agreement has been executed by
the respondent Licensee who is a State within the ambit
of Art.12 of the Constitution of India, for permanent
connection, no retrospective recovery can be made on
the basis that the agreement was wrongly executed as it
was supposed to be for temporary connection. This is
for the reason that as the subsequent denial on the part
of the respondent would be in violation of the doctrine
of promissory estoppel, as the petitioner has altered his
position on the basis of the agreement between the
parties. Thus, on this count, as also on the ground that
the impugned demand notice has been issued by the
respondents without complying with the provisions of
the Comptroller and Auditor-General's (Duties, Powers
and etc.) Act, 1971 or any violation of the order passed
by the Supreme Court in the case of U.P. Power
Transmission Corporation Limited (Supra), the
impugned demand notice cannot be sustained.
13] Resultantly, the petitions stand allowed and the
impugned demand notices are hereby set aside. It is
found that the petitioner has paid certain amount to the
respondents as directed by this Court while granting
interim relief vide order dated 13.07.2021 and
18.08.2021, it is directed that the amount paid by the
petitioner shall also be remitted back to the petitioner
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with the applicable bank interest rate within a period of
one month from the date of receipt of certified copy of
this order."
5. Learned counsel for the appellants contended that the
respondent has straightway issued the demand notice
even without there being any adjudication merely on the
basis of Comptroller & Auditor General's report. He
further contended that the respondents have been found
to be involved in the construction business and were
carrying on its business for the purposes of providing
raw material to contractors constructing the roads,
therefore, the respondent's business is closely connected
with the construction work as per Clause 4.43 of the
M.P. Electricity Supply Code, 2013 and, that permanent
connections cannot be given for construction purposes.
The learned single Judge erred in allowing the writ
petitions without considering the nature of work being
carried out by the respondents, hence, the writ appeals
deserve to be allowed.
6. Learned counsel for the respondents have vehemently
opposed the prayer and submitted that the respondents
have already applied for electricity disconnection. They
have placed reliance upon the judgment of the Apex
Court delivered in the case of U.P. Power Transmission
Corporation Limited and Another Vs. CG Power and
Industrial Solutions Limited and Another reported as
(2021) 6 SCC 15 wherein the Apex Court in no
uncertain terms held that "in the absence of any
adjudication, it is impermissible for the power
generating company to issue the communication to
realize cess solely on the report of the CAG".
7. Learned single Judge relying on the judgment
delivered in the case of U.P. Power Transmission
Corporation Limited and Another (supra) allowed the
writ petitions and directed the appellants herein to
refund the amount to the respondents with applicable
bank interest rate within a period of one month from the
date of receipt of certified copy of the order.
8. This Court does not find any error in the order passed
by the learned single Judge particularly in view of the
fact that the agreement is still in existence. Moreover,
instead of issuing show-cause notice to the respondents,
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the appellants have straightway issued the demand
notice without there being any adjudication or
following the principles of natural justice. Learned
single Judge has not committed any error so as to
interfere in the order passed in the batch of writ
petitions. However, the learned single Judge ought to
have granted liberty to the appellants to proceed in
accordance with law against the respondents."
04. Counsel for the petitioner submitted that the petitioner has also
challenged the constitutional validity of Clause 4.43 of the M.P. Electricity
Supply Code, 2013. Since the impugned demand itself has been set aside,
therefore, no cause survives to challenge the constitutional validity in the
petition. Even otherwise the M.P. Electricity Supply Code, 2013 has been
repealed by M.P. Electricity Supply Code, 2021 w.e.f. 20.08.2021. The Writ
Court has also protected the interest of the respondents by giving liberty to
take action in accordance with the law prospectively, therefore, now the
period of contract is over and the Supply Code, 2013 is also not in existence
by virtue of repeal by new Code.
05. Shri Dwivedi, learned counsel for the respondents No. 1 & 2
submits that the aforesaid Writ Petitions were allowed because there was
demand from the respondent without giving any show cause notice, but in
the present case the show cause notice was issued to the petitioner and reply
was filed, therefore, this facts of this case are distinguishable from the facts
of the case of Narmada Resources (supra).
06. We have perused the order passed by the Writ Court as well as
by the Division Bench. The Writ Court has allowed the Writ Petition on
merit also by assigning reasons which are in para 10, 11, 12 & 13 quoted in
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the order passed by the Division Bench. In addition to the above, the
Division Bench has also considered the issue that impugned demand notice
has been issued without giving opportunity of hearing. Therefore, all the writ
petitions and writ appeals have been decided against the respondent-
company and the said order has attained finality.
07. The petition is dismissed in respect of constitutional validity and
partly allowed in respect quashment of the demand notice dated 09.03.2021
(Annexure P/13), complaint dated 04.06.2021 (Annexure P/14) and
communication dated 27.06.2022 (Annexure P/16).
(VIVEK RUSIA) (BINOD KUMAR DWIVEDI)
JUDGE JUDGE
Vatan
