M/S Pbm Polytex Limited vs M.P.State Electricity Board on 24 February, 2026

Author: Anuradha Shukla

Bench: Anuradha Shukla

          NEUTRAL CITATION NO. 2026:MPHC-JBP:15811




                                                              1                               MA-2886-2008
                              IN     THE      HIGH COURT OF MADHYA PRADESH
                                                    AT JABALPUR
                                                         BEFORE
                                         HON'BLE SMT. JUSTICE ANURADHA SHUKLA
                                                ON THE 24th OF FEBRUARY, 2026
                                                  MISC. APPEAL No. 2886 of 2008
                                                  M/S PBM POLYTEX LIMITED
                                                            Versus
                                                M.P.STATE ELECTRICITY BOARD
                           Appearance:
                              Shri Aditya Adhikari - Senior Advocate assisted by Ms. Prachi Tiwari -
                           Advocate for the appellant.
                              None for the respondent, though represented.

                                Heard on : 04.02.2026
                                Pronounced on :24.02.2026.
                                                                  ORDER

Appellant is challenging in this appeal the original order passed on 04- 04-2007 in Petition No.22/05 and review order passed on 16-10-2007 in Petition No. 31 / 2007 by Madhya Pradesh Electricity Regulatory Commission. Appellant is assailing these orders on a limited point

contending that, despite the worker's strike, it was wrongly denied the right to pay electrical energy charges on the rates of reduced supply.

2. Facts of the case are that to run its export-oriented spinning unit, appellant had availed a high-tension supply connection from MPSEB, and for this agreement (Annexure-A-1) was executed. Clause 23 of that agreement protected the consumer from paying higher electric energy charges in the

NEUTRAL CITATION NO. 2026:MPHC-JBP:15811

2 MA-2886-2008 case of lockout, strike etc. Appellant had to declare lockout of the factory with effect from 10-11-2004 and this continued even after 11-01-2005. Certificates (Annexure-A-2 and A-3) to that effect were issued by Labour Commissioner Indore on 11-01-2005 and Officer-in-Charge of Police Station Lodhi Kheda, Chindwada on 31-12-2004 respectively. A copy of Panchnama (Annexure-A-4) prepared by engineers of MPSEB after joint inspection and a written information (Annexure-A-5) sent to Superintendent Engineer (O&M) MPSEB, Chindwada by authorised representative of factory were also placed on record.

3. According to appellant, despite the protection provided in clause 23 of agreement, bills (Annexure-A-6) issued for the months of November and December 2004 were not for the reduced supply of electrical energy. Further,

several letters (Annexure-A-7, A-8 and A-9) were written by appellant to Chief Engineer, Superintendent Engineer and CMD of Madhya Pradesh State Electricity Board. In reaction to this correspondence, a letter (Annexure-A-

10) was written by Superintending Engineer to the Executive Engineer with the direction to look into the dispute and submit the report. With an intent to resolve the dispute, Additional Chief Engineer under his letter dated 03-02- 2015 (Annexure-A-12) , informed the appellant that the period of lockdown of company was only for 36 days and for this short period, the request for temporary reduction for contract demand under clause 23(a) of HT agreement, read along with Clause 11.1 and 11.2 of MPERC Supply Code 2004, is not tenable and therefore cannot be agreed to. 4 . Appellant then approached the Madhya Pradesh Electricity Regulatory

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3 MA-2886-2008 Commission (MPERC) Bhopal for seeking same relief in petition number 22/2005; the commission vide order dated 5-04-2005 (Annexure-A-14) directed that the matter be referred to the Supply Code Review Panel Working Group for applying its mind on the merits of the issue raised by appellant and give its opinion on the points keeping in view the provisions of Electricity Act 2003. The minutes of the meeting of Review Panel (Annexure-A-15), as held on 30-07-2005, have been placed on record, and according to them, the Review Panel recommended modification in clause 11.2 of the Supply Code of 2004. In the pending petition no. 22/2005, the additional submission in writing (Annexure-A-16) was placed by appellant before the Commission on 4-08-2006, along with a the certificate of labour commissioner confirming that the period of strike was from 10-11- 2004 to 8-04-2005.

5. Petition no.22/2005 was dismissed by first impugned order passed on 4- 04-2007 by Commission, observing that the period of lockdown was only for 36 days as claimed by Electricity Board and the minimum qualifying period for seeking temporary load reduction was 60 days as per the prevailing provision of Clause 11.2 of Supply Code 2004. It was also of the opinion that Clause 11.2 of Supply Code 2004 was amended with subsequent effects, under the recommendation of Review Panel and became applicable from the date of notification in official gazette i.e. 9-02-2007. Thus, it was of the view that no retrospectivity of the amended provision could be successfully claimed by appellant to make it enforceable in the period of strike. Hence,

holding that the minimum qualifying period of strike was 60 days and not 30

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4 MA-2886-2008 days as amended in 2007, the petition was dismissed stating that appellant has failed to make out a good case. The review petition filed by appellant also met the same fate, under the second impugned order dated 16-10-2007. 6 . Both these orders are assailed in this appeal and grounds to challenge their legality and proprietary are similar to the grounds taken in earlier rounds of litigation. Respondent failed to appear and contest the appeal. 7 . The substantial questions of law involved in the case were never settled not even at the time of admission of appeal. Since section 41 of Madhya Pradesh Vidyut Sudhaar Adhiniyam 2000, the provision under which present appeal has been preferred, mandates that appeal can be entertained only on the questions of law, following questions are being drawn for determination.

a. Whether the commission grossly erred in calculating the period of strike to merely 36 days, while it continued from 10.11.2004 to 08.04.2005 ?

b. Whether the agreement executed between the parties in 1992 had a statutory force and whether under clause 23 of this HT supply agreement, the claim of appellant could not have been rejected ?

c. Whether original Clauses 11.1 and 11.2 of Electricity Supply Code 2004, and the amendments of year 2007 incorporated therein, had only prospective operation and could not have been applied on previous claims ?

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5 MA-2886-2008

8. Arguments of learned senior counsel on behalf of appellant were heard at length, while none appeared on behalf of respondent.

9. For examining whether the strike period was correctly calculated by the Commission, two certificates issued by Labour Commissioner placed before Madhya Pradesh Electricity Regulatory Commission (MPERC) Bhopal by appellant, are relevant. In the first certificate (Annexure-A-2) it was certified that strike was continuing with effect from 10-11-2004 till the date of issue of certificate 11-01-2005. The second certificate defined this period from 10.11.2004 to 08.04.2005. This second certificate was filed along with the additional submission (Annexure-A-16) given in writing to the Commission during the pendency of Petition no. 22/2005. Apparently, both these certificates were not challenged by respondent on the period of strike. Thus calculating the period of strike on the basis of second certificate, it is held that Commission wrongly calculated this period as to be only 36 days.

10. For the sake of convenience, the remaining substantial questions are being discussed simultaneously. Under them it is to be discussed whether there was any binding condition between the parties under the HT (High- Tension) Supply Agreement (Annexure-A-1) , giving protection to appellant against imposition of higher charges, surcharge and penalty towards not maintaining the power factor and what was the effect of original and amended provision of Clauses 11.1 and 11.2 of Electricity Supply Code 2004 on the rights of the parties.

11. From the inspection of impugned orders, it is clear that not the slightest thought was given by the Commission, to the terms settled between the parties under the High-Tension Supply Agreement which was executed on

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6 MA-2886-2008 10-01-1992 between them. Being a legal contract, its terms were binding on both the parties and under Clause 23(a) of it, the following condition was settled.

If at any time the consumer is prevented from receiving or using the electrical energy supplied under this agreement either in whole or in part through lockout, strike, riot . . . . , then in any such case, the consumer on giving notice in writing to the Board of such breakdown, shall not be required to pay for a greater supply of electricity electrical energy under this agreement than the consumer may require in (hereinafter referred to as the reduced supply) during such time as the said work and premises may be wholly or partially unfit for occupation or use.....

1 2 . This condition agreed upon between them allowed the appellant to inform the board in writing of the breakdown faced on account of strike of workers and also gave it an entitlement to pay only for the reduced supply. The aforesaid agreed term agreed was not qualified with any minimum breakdown period for enabling the appellant / consumer to utilize the benefit of reduced supply. Apparently, this period was introduced when Madhya Pradesh Electricity Supply Code 2004 came into existence defining the clause of Force Majeure. Its Clauses 11.1 and 11.2 read as under :-

"11.1 The licensee or the consumer shall not be liable for any claim for loss, damage or compensation whatsoever arising out of failure of supply when such failure of supply is due, either directly or indirectly, to war, mutiny, civil commotion, riot, terrorist attack, flood, fire, strike (subject to certification by Labour Commissioner), lockout (subject to certification by Labour Commissioner), cyclone, tempest, lightning, earthquake or act of God.

11.2 If at any time during the continuance of the agreement between the licensee and the consumer, the plant or premises of the consumer is destroyed or

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7 MA-2886-2008 damaged due to force majeure conditions mentioned in regulation 11.1, rendering the plant or premises wholly or substantially unfit for occupation or use, the consumer may, on giving 7 days notice in writing to the licensee, about such a situation, take a reduced supply of power as may be necessary and feasible. In all cases where the consumer claims Force Majeure conditions, the licensee's authorised representative shall verify the same. Such a facility shall be available to the consumer only if the period of reduced supply is for a minimum period of 60 days and upto a maximum of six months. The aforesaid period of reduced supply shall not be counted towards the initial period specified in the agreement and the period of agreement shall be extended for a further period equal to the period of reduced supply."

1 3 . Clearly Supply Code of 2004 introduced the qualifying period for application of condition of Force Majeure by prescribing it as 60 days. Admittedly, under the agreement (Annexure-A-1) , executed in January 1992, no minimum period of strike was agreed upon as a qualifying condition. The question arises how does a change in the statute about a qualifying condition affects the enforceability of a contract having no such condition. A simple answer to this question is the principle of non-retroactivity of law which says that law applicable to a contract throughout its duration should be the one in force at the time of its signature, unless the condition of the contract is of such a nature, as prohibited by statue or contrary to the public policy. Last two categories of contract are considered as void ab initio and are consequently unenforceable by any party as they are treated as they never existed. Therefore, introducing a qualifying condition of minimum period under the amended law, cannot affect the validity of agreement which was signed much prior to the amendment, unless the law was effected

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8 MA-2886-2008 retrospectively.

14. Under the Indian law, if the qualifying period affects a vested right i.e. a right already earned under the old terms of the agreement, the amendment in law introducing or changing the qualifying period cannot be applied to existing contractual rights unless the legislature explicitly stated it should be retrospective. The Supreme Court in M Rajendran v. M/s. KPK Oils 2025 INSC 1137 clarified that amendments curtailing a statutory window or period of time are substantive, not just procedural, and thus cannot apply retrospectively without clear words from Parliament. In order to avoid any such eventuality, parties conventionally reduce legal uncertainty involved by a change of law, by incorporating the clause of Force Majeure in the agreement itself. This clause covers the eventuality of any changes in law and allows the party to suspend performance until the qualifying term introduced by the amended act is met. Herein, the agreement is of 1992 having no qualifying condition of minimum period of strike. Thus, the right to pay for reduced supply on account of strike became a vested right which remained unaffected even after the introduction of M.P. Electricity Supply Code 2004, which required that minimum period of strike shall be 60 days.

15. The foregoing discussion is summarized in nutshell by observing that appellant was entitled to pay for reduced supply on account of strike and there was no qualifying period of minimum 60 days under the M.P. Electricity Supply Code 2004 or 30 days as the Supply Code of 2004 stood amended in the year 2007. Consequently, under the original order 04-04- 2007 of and also under the review order dated 16-10-2007, the Commission grossly erred in not acknowledging the contractual rights vested in appellant

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9 MA-2886-2008 on account of agreement (Annexure-A-1) of the year 1992 and it wrongly invoked and applied the provisions of Madhya Pradesh Electricity Supply Code 2004.

16. The learned senior counsel for appellant has very aptly relied upon the decision of in the case of Zile Singh v. State of Haryana and others in (2004) 8 SCC 1, wherein it was observed that :-

"It is cardinal principle of construction that every statue is prima facie prospective, unless it is expressly or by necessary implication made to have a retrospective operation......UNLESS THERE ARE WORDS IN THE STATUTE SUFFICIENT TO SHOW THE INTENTION OF THE LEGISLATURE TO AFFECT EXISTING RIGHTS, IT IS DEEMED TO BE PROSPECTIVE ONLY. A NEW LAW OUGHT TO REGULATE WHAT IS TO FOLLOW, NOT THE PAST.

17. Thus, the right created in past in favor of appellant was not taken away even after the coming of M.P. Electricity Supply Code 2004 into operation and, therefore, both the impugned orders passed by M.P. Electricity Regulatory Commission in petition No.22/2007 and 31/2007 on 04-04-2007 and 16-10-2007 respectively are hereby set aside. Appellants shall accordingly be liable to be charged only for reduced supply as per condition number 23(a) of High- Tension Supply Agreement executed by it with the respondent. Respondent shall ensure that the revised bills are prepared for the months of period of strike and shall refund the excess amount, if any, after adjusting the paid amount and if no such amount has been paid by appellant till date, shall recover it on revised parameters of reduced supply. Let this exercise of preparing revised bills be completed within a period of next two months.