ORDER SHEET

IN THE HIGH COURT OF SINDH AT KARACHI.

 

Suit No. 485 of 2012

 

Date             Order with signature of Judge

 

For hearing of CMA 4605/2012.

 

Date of hearing: 04.06.2012 & 08.06.2012

 

Mr. Amal Khan Kansi along with Khurram Ashfaq for the plaintiff.

Mr. Ayan Mustafa Memon for defendant No.1.

None for defendant No.2.

-.-.-

 

Muhammad Shafi Siddiqui, J.- By this order I intend to dispose of application under order XXXIX rule 1 & 2 read with Section 151 CPC (CMA No.4605 of 2012) whereby the plaintiff has sought restraining orders against the defendant No.1 from carrying on with its illegal failure to supply electricity to the plaintiff despite the fact that the plaintiff has regularly paid all its electricity bills.

 

2.       In fact a mandatory injunction for restoration of electricity is sought.

 

3.          Learned counsel for the plaintiff in support of the application has argued that the plaintiff is one of the largest manufacturers of denim and garments and pursuant to their business requirement got three electricity connections to their premises i.e. (i) BL 307, (ii) BL2348 and (iii) BH781. It is submitted by the learned counsel that the factory units require steady supply of power and in case of its inconsistent supply, the factory cannot function. Pursuant to the three aforesaid connections, the contracts were entered into with the defendant KESC to provide certain amounts of sanctioned load for their respective premises for its industrial use, which accumulated power the KESC was obliged to provide.  It is submitted that since the KESC has repeatedly failed to provide steady power supply to the plaintiffs, they were compelled to set up its own backup electricity generators in order to enable them to continue its business activities pursuant to the orders of their various clients. It is submitted that the energy generated through their Captive Power Plant is not provided to any other party.

 

4.          Highlighting to the point of non-use it was submitted that the electricity bills are divided into two portions. The first portion is in relation to the fixed charges payable regardless of whether or not sanction load is fully utilized whereas the other portion pertains to usage of the electricity in terms of units consumed. The cause initiated on 17.02.2012 when the plaintiff received notices from the defendant KESC which apparently issued under section 20 of the Electricity Act, 1910 read with Chapter 8 and 14 of the Consumer Service Manual. Per learned counsel the notices were issued to ascertain whether any captive power plants were on site and whether the sanctioned load was in fact being utilized or is kept as standby. It was further claimed in the notices that if it were discovered that this was the case i.e. kept as standby then they would be entitled to disconnect the power supply and/or any other supply of power i.e. captive generators as well.

 

5.          Pursuant to these notices the plaintiff replied to the KESC through its letter dated 24.2.2012 wherein they submitted that they are paying the bills including the fixed charges regularly in respect of the sanctioned load. They further submitted they were coerced and forced to use the captive power plant because of the KESC’s failure to supply uninterrupted power supply. Learned counsel further submitted that on 09.03.2012 the plaintiffs also sent a letter to NEPRA seeking their assistance to rescue them. They urged before the NEPRA that their contract with KESC did not make it mandatory for the plaintiff to use the sanctioned load as a primary source. They submitted that before inspection of all the three units completed, the KESC on 20.03.2012 disconnected the electricity supply to two units i.e. BL2348 and BH781 whereas third one i.e. BL307 remained connected until three more notices were issued out of which two were issued on 19.04.2012 and the third one in respect of BL307 was issued on 20.04.2012. He submitted that it was not until 19.04.2012 that KESC finally issued a show-cause notice in respect of three units. Hence, it was submitted that the malafides with regard to issuance of notices are clear from the fact that sufficient time was not provided to the plaintiff to explain its position in that regard.  It is submitted that out of three notices two which were issued on 19.04.2012, the date of personal hearing was fixed as 20.04.2012 whereas for the third meter regarding which the notice was issued on 20.04.2012 the date of hearing was fixed on 23.04.2012.  Thus, per learned counsel there was no sufficient time provided by the defendant KESC to the plaintiff to explain their position.  It was submitted that during this time the plaintiffs’ representative was coerced and pressurized to give an undertaking in favour of KESC for utilizing at least 50% of the sanction load, hence this coercion and undertaking is out of the colourable exercise of power that they were enjoying at that time. Learned counsel, however, submitted that the plaintiff has not given any undertaking by which they can be compelled to use the KESC as a main or primary source. Learned counsel further submitted that the plaintiff was using captive power plant but only occasionally they did not get sufficient supply on account of insufficient gas which compelled them again to shift to KESC connection and in case of disconnection of KESC they would have no option but to shutdown their factory. 

 

6.       It is further submitted by the learned counsel that Section 20 of the Electricity Act, 1910 is not applicable as has been held by the learned Single Judge in the order passed in case being Suit No.329/2012. The Consumer Service Manual which deals with the situation of disconnection is governed by Chapter 7 and 8, more particularly 7.5 and 8.1. Per learned counsel 7.5 of CSM which deals with the misuse of the tariff, the licencee i.e. KESC is liable to serve seven days clear notice to the consumer before causing such disconnection. He further submitted that Chapter 8 and more particularly 8.1 of CSM is the one which could be used and considered to apply to the current situation.  The disconnection under this rule can be made if (i) the consumer is a defaulter in making payment of energy consumption charges bills, (ii) if he is using the electricity connection for a purpose other than for which it was sanctioned and (iii) if he has extended his load beyond the sanction load even if after receipt of notice in this respect from the licencee. Hence, per learned counsel the ground for disconnection pursuant to the power being kept as standby would not be applicable here and consequently the disconnection, per learned counsel, was unlawful, even if it is conceded by the plaintiff that they were using the same as secondary source or standby as it is not the case where plaintiff was using the sanctioned load for a purpose other than for which it was sanctioned.

 

7.       In reply to the above arguments, learned counsel for the defendant KESC submitted that since the plaintiff has approached this Court after substantial delay thus they are not entitled to any discretionary relief. He submitted that the plaintiff earlier was having three electric connections there i.e. BH781, BL307 and BL2348. Per learned counsel the electricity in respect of BL2348 was disconnected on 09.03.2012, BH781 was disconnected on 28.03.2012 and BL307 was disconnected on 20.03.2012. However, he added that as far as BL307 was concerned it was disconnected on 20.03.2012 on plaintiff’s refusal to allow the inspection pursuant to a notice for inspection.

 

8.       It is submitted by the learned counsel that the plaintiff was catering their energy requirements through captive power plant and thus are not entitled for any equitable relief. He submitted that the loads were sanctioned for plaintiff’s primary use rather than backup or secondary use. It is submitted by the learned counsel that the fixed charges are payable regardless of whether any electricity has been consumed in a cycle month as the fixed charges are calculated subject to reading of the maximum demand indicator of that cycle month. Meaning thereby that if no electricity is consumed, no load will be recorded in its MDI and hence no fixed charges could be charged. These charges are recoverable if the actual units are consumed by a particular consumer. The difference between the two is that fixed charges are charged against the maximum load that a particular industrial consumer utilizes and reached in a month whereas units consumed shows the actual electricity utilized and the electricity bills for units consumed is issued pursuant to the electricity consumed by the consumer. Learned counsel for the defendant denied that the KESC disconnected electricity without prior inspection as the plaintiff itself annexed three notices of 17.02.2012 and their replies. The respective inspections were undertaken by KESC on 24.02.2012 for BL2348 and 29.02.2012 for BH781 and the electricity to these two units was disconnected on 09.03.2012 and 28.03.2012 respectively after they were found using captive power plant in these two premises and that the third meter bearing consumer No.BL307 was attempted to inspection and refused by the plaintiff, it was disconnected on 20.03.2012. The inspection, however, was later on carried out on 24.04.2012 with regard to BL307. Learned counsel, however, pointed out that earlier the disconnection to the aforesaid meter was on account of the refusal by the plaintiff for inspection.  He further submitted that notices of 19.04.2012 were issued to the three units of the plaintiff in compliance of the order of this Court. It was further submitted by the learned counsel that in terms of the second proviso of 8.1, the plaintiff was found violating the mandate of the sanctioned load and hence the action was also taken pursuant to Section 20 of the Electricity Act and Chapter 8 of CSM, which was the creation of NEPRA Act. He submitted that since it is already conceded by the learned counsel for the plaintiff that the KESC’s connection was being kept as standby there was neither any occasion to determine such status nor was there any other impediment. 

 

9.       In rebuttal learned counsel for the plaintiff reiterated that in such a situation where the plaintiff was using the electricity as standby the law does not support KESC to cause disconnection and in addition he submits that the law requires a second notice to be issued for disconnection in case they reach to the conclusion and determine that the electricity is being used as standby. This submission was without prejudice to the earlier arguments wherein he stated that in such eventuality where the KESC power was being used as standby, the defendant does not enjoy this privilege to disconnect the electricity connection.

 

10.     I have heard the learned counsel for the parties and have also perused the record.  In order to make up mind regarding the arguments raised by the learned counsel, it would be advantageous if the relevant law is reproduced hereunder:-

 

“20. Power for licensee to enter premises and to remove fittings or other apparatus of licensee. (1) A licensee or any person duly authorized by the licensee may, at any reasonable time and on informing the occupier of his intention, enter the premises to which energy is or has been, or is to be, supplied by him, for the purpose of:-

 

(a) examining, inspecting and testing the electric supply-line, meters, maximum demand indicators or other measuring apparatus, electric wires, fittings, works and apparatus for the supply or use of energy, whether belonging to the licensee or to the consumer; or

 

(b) ascertaining the amount of energy supplied or the electric quantity contained in the supply or the apparatus; or

 

(c) The removing, where a supply of energy is no longer required, or where the licensee is authorized to take away and cut off such supply, any electric supply lines, meters, maximum demand indicators or other measuring apparatus, fittings, works or apparatus belonging to the licensee:

 

Provided that, where a consumer’s apparatus is involved, no person shall be deemed to have been so authorized by the licensee unless, at the time of entry into such premises, he is in possession of a written authorization from the secretary, manager or any other officer of the licensee not below the rank of Divisional officer in the Public Works Department.

 

Provide further that previous permission of the District Magistrate shall be necessary for making such entry into the premises of a domestic consumer,

 

(2) Where a consumer refuses to allow a licensee or any person authorized as aforesaid to enter his premises in pursuance of the provisions of sub-section (1) or, when such licensee or person has so entered, refuses to allow him to perform any act which he is authorized by that sub-section to perform, or fails to give reasonable facilities for such entry or performance, the licensee may, after the expiry of twenty four hours from the service of a notice in writing on the customer, cut off the supply to the consumer for so long as such refusal or failure continues, but for no longer.

 

Chapter 7 and 8 of CSM

 

CHAPTER 7

 

7.1. Tariff.

 

Tariff means the rates, charges, terms and conditions for generation of electric power, transmission, interconnection distribution services and sales of electric power to consumers by a DISCO. DISCOs shall charge only such tariff from consumers as is approved by NEPRA and duly notified by Government of Pakistan from time to time. DISCOs shall apply to NEPRA for any change of tariff to be charged from different categories of consumers.

 

..

 

7.5. MIS-USE OF TARIFF

 

(a) The consumer shall, in no case use the connection for the purpose other than for which it was originally sanctioned. In case of violation, the consumer is liable for disconnection and/or penal action.

 

(b) DISCO shall serve seven (7) days clear notice to the consumer who is found misusing the approval/sanctioned tariff. However, DISCO shall immediately change the tariff and shall determine the difference of charges of the previous period of mis-use to be recovered from consumer. However, in the absence of any documentary proof the maximum period of such charges shall not be more than TWO billing cycles.

 

CHAPTER 8

 

8.1. DISCONNECTION

 

A premise is liable to be disconnected if the consumer is a defaulter in making payment of the energy consumption charges bill(s), or if he is using the electric connection for a purpose other than for which it was sanctioned, or if he has extended his load beyond the sanctioned load even after receipt of a notice in this respect from the DISCO.

 

CHAPTER 14

 

14.1. Access to the Consumer’s Premises

 

A duly authorized employee of the DISCO shall be entitled at all reasonable times, and on informing the occupier of his intention (after giving a notice of clear 3 days), to enter the premises to which energy is or has been, or is to be supplied by the DISCO, for the purpose of:

 

a) examining inspecting and testing the electric supply lines, meters, maximum demand indicators or other measuring apparatus, electric wires, fittings, works or an apparatus for the supply or use of energy, whether belonging to the DISCO or to the Consumer, or

 

b) ascertaining the amount of energy supplied or the electrical quantity contained in the supply or the apparatus, or

 

c) removing, where a supply of energy is no longer required, or where the DISCO is authorized to take away and cut-off supply, any electric supply lines, meters, maximum demand indicators or other measuring apparatus, fittings, works or apparatus belonging to the DISCO or

 

d) along all other things necessary or incidental to the proper supply or maintaining such supply to the consumer’s premises.

 

14.10. Disconnection of supply for Non-Compliance.

 

a) DISCO may disconnect supply to a consumers if,

 

b) The consumer has not fulfilled an obligation to comply with this Manual; and

 

c) The DISCO has given the consumer 7 business days’ written notice of disconnection (such notice to be in addition to the notice already given) and

 

d) The consumer fails to comply with the notice.”

 

11.     I am also honoured to go through the order passed by my learned brother Munib Akhtar, J in Suit No.329 of 2012 which substantially touches the issue involved in this case. I must admit that my learned brother has not left a single (i) to be dotted and ‘t’ to be crossed. It is virtually a complete code.

 

12.     The primary question, which comes out of the pleadings of either side and arguments advanced, is as to whether the defendant No.1 was well within its right to disconnect the electricity of the plaintiff in terms of Chapter 8 of Consumer Service Manual who has kept the sanctioned load of defendant No.1 as a standby and/or for secondary purposes. The parties however are not at issue as far as status of sanctioned load is concerned which is admittedly being kept as standby/secondary source.

 

13.     As far as the Electricity Act 1910 (Act of 1910) is concerned, it does not provide any occasion to discontinue or disconnect the electric supply in such eventuality i.e. standby/secondary use.  Section 20(2) ibid provides that where a consumer refuses to allow a licencee or any person authorized to enter his premises in pursuance of provisions of subsection (1) or when such licencee or person has so entered, refuses to allow him to perform any act which he is authorized by that subsection to perform, or fails to give reasonable facilities for such entry or performance, the licencee may after the expiration of 24 hours from the service of notice in writing on the consumer, cut off the supply to the consumer for so long such refusal or failure continues.  Such is not the situation here except for meter bearing No.BL307 whose inspection was earlier refused but later on carried out. Therefore, as far as the issue of secondary source/ standby is concerned, it is not at all covered by the Act of 1910 and I agree with the observations and findings of my learned brother, as reflected in the cited order that this could never be the intent of legislature in 1910 nor could any one remotely think of obtaining a load for the purpose of keeping it as standby, hence this situation is not covered by Act of 1910 and therefore the application of Section 20 to such situation is a futile effort.

 

14.     With this I would now refer to Consumer Service Manual. Chapter 7 and 8 and 14 of such Manual deals with the disconnection upon certain eventualities.  Clause 7.5 of Chapter 7 deals with misuse of tariff. It says that the consumer shall in no case use the connection for the purpose other than for which it was originally sanctioned and in case of violation he was held liable for disconnection, of course he deserves seven-day clear notice from the licencee. Even in sub-clause (b) of clause 7.5, the licencee is not vested with the absolute powers of disconnection as it was under the obligation to immediately change the tariff and determine the difference of charges of the previous period when it was being misused to be recovered from the consumer and in the absence of any proof of such period of misuse, the maximum period for which the consumer could be charged shall not be more than two billing cycles. This is certainly not the situation here.

 

15.     Next I would discuss Chapter 8 of the Consumer Service Manual. As stated, 8.1 has three phases i.e. electricity of the premises is liable to be disconnected if

 

(i)                consumer is a defaulter in making payment of the energy consumption charges bills,

 

(ii)             if he is using the electric connection for a purpose other than for which it was sanctioned and

 

(iii)           if he has extended his load beyond the sanctioned load, even after receipt of notice in this respect from the licencee. Proviso (b) and proviso (c) are important as far as the case of the plaintiff is concerned and I would like to discuss each of them.

 

Proviso (ii) has three important words i.e. “using”, “purpose” and “sanctioned”.

 

16.     This does not deal with the change of tariff as it has already been discussed in 7.5 clause earlier, therefore, the legislature has something else in its mind while re-phrasing Chapter 8 of the Consumer Service Manual which is definitely not the change of tariff.  It is an admitted fact that the electric power was provided by the licencee to the consumer for its industrial use. The sanction of electric power or electric load to the plaintiff has a purpose behind it i.e. its industrial use by the consumer and it does not and cannot carry any other meaning.

 

17.     I had the occasion to find the meaning of the word “use” and “purpose” in different dictionaries and it has been defined as something done positively, eg. utilization or disposal. Mere non-use is not included in the word “use”. 

 

18.     The word “use” means to make use of a means or instrument; to imply for a profitable end. It is inconceivable that the legislature has utilized the words “use” and “purpose” without the application of mind. If the meaning of these words are read in conjunction with the arguments of the learned counsel for the plaintiff, it would render 8.1 as redundant, particularly clause (ii) of 8.1 as ineffective and purposeless. The intentions of the licencee at the time when the load was sanctioned without any hesitation was of its use by the consumer and the word “use” does not and cannot include “non use” or “non-usage” hence the purpose for which the load was sanctioned was its usage by the consumer and since the purpose was not observed by the consumer, it can be said that the consumer is using the electric connection for the purpose other than for which it was sanctioned.

 

19.     Now surely the word “use” does not mean that the plaintiff or the consumer should have used that load at its maximum capacity but when it is seen and observed that the primary source of electricity by a consumer is not which the defendant supplies, but it is through captive power plant or self generated source, only then it can be easily said that it is under utilized or not used or not used as a primary source and hence the legislature has not made  (iv) proviso in 8.1 whereby it could have been easily said that the electricity of the consumer is liable to be disconnected on account of under-usage and only the extended load beyond the sanctioned load was discussed in the (iii) proviso. So, the coercion of 50% usage or any other percentage is not the intent of the legislature but its use as main source. As it happened sometimes that the industrial concerns are without work and load/power is not used to its maximum capacity, so “under utilized” penalty is not made a ground for disconnection. This is the answer to the arguments of learned counsel for the plaintiff that only extended load use was subjected to disconnection.  Meaning thereby that if the consumer is under utilizing the load without keeping the captive generator was not liable for disconnection but if the sanction load is not used as because other sources of heavy generation are being used then it is covered by (ii) proviso and then for this reason that the (iv) occasion i.e. of no utilization or under utilization is not legislated as the same is covered by (ii) proviso of 8.1. The word “use” must take its color from the context in which it is used.

 

20.     I also had occasion to understand the meaning of “purposeful” and “purposeless” which read as under:-

 

Purposeful:- having a definite purpose in view, determine. Purposeless:- having no purpose, having no aim or goal, aimless, to lead a purposeless existence.  Useless.

 

21.     Now if we are to give a cumulative effect to the meaning of all these words while discussing (ii) proviso of 8.1, it evinced legislature’s intent that use of sanctioned load has a positive meaning and it also reflects that the licensee has provided the electricity to the consumer for its use. Rendering its use idle would certainly make the (ii) proviso 8.1 as meaningless and hence it can be easily said that the consumer who kept the sanctioned load as standby has kept the electricity for the purpose other than for which it was sanctioned. Since it was sanctioned for its industrial use therefore its non-usage is violative of (ii) proviso.

 

22.     Hence I am of the view that (ii) proviso of 8.1 of CSM is the one which deals with such situation.

 

23.     New consumers who have applied for electric connections are in such a situation that they could neither obtain KESC connection on account of power crises at one hand and on the other hand they cannot even have the industrial gas connection since it is also being utilized by same or other industrial consumers who also have the electric connection to their premises. Hence the plaintiff and many other like consumers are enjoying both the electricity connection as well as gas connection and are using their captive power plants as main source whereas the new applicants and new consumers are being victimized as they cannot avail any of the two on account of its scarcity and unavailability.

 

24.     Before taking steps of disconnection the question of determination of status of sanctioned load is also very important. Throughout the pleadings and in documents relied upon by the plaintiff it is their consistent stand that electricity was being kept a standby/ secondary.

 

25.          Obviously disconnection of electricity on the ground of it being used as standby requires determination of status of sanctioned load but only where parties are at issue as to whether the sanctioned load is being used as main source or secondary source/standby. As I observed earlier throughout in the pleadings as well as in response to notices dated 17.2.2012 the stand taken by plaintiff was that it was being used as standby and not as main source. In their reply dated 24.2.2012 attached as annexures C/4 and C/5 the plaintiff’s stand is as under:

Annexure C/4

 

“Our sanctioned load is 270KW and our consumption is “Zero” as we have been running our project on self generation due to instable status of your company.”

 

Annexure C/5

 

“Our sanctioned load is 100 KW and our consumption is “Zero” as we have been running our project on self generation due to instable status of your company.”

 

 

26.          Similarly in para-7 of the plaint the plaintiff has taken a similar stand that they were forced to use captive power as defendant failed to provide regular and reliable power supply.

 

From Para-7 of the plaint

 

“--It also stated that the only reason it was forced to use captive power was because KESC failed to provide a regular and reliable power supply. Furthermore, even when KESC did supply power, that power was often subject to fluctuations in voltage, which had the potential to cause massive losses and damage to Soorty’s costly plant and machinery.”

 

Likewise in para-12 of the plaint, the plaintiff categorically submitted as under:

From Para-12 of the plaint

 

“---At no point has Soorty ever undertaken to use KESC as a primary source of power. This is clear from the fact that it has refused to sign the ‘Undertaking’ offered to it by KESC on numerous occasions--.”

 

27.     In my view therefore, when the parties are not at issue the question of its determination does not arise. The plaintiffs was already put on notice by notices dated 17.2.2012 and the controversy came to an end on account of such admission with regard to keeping the load as standby. The distinguishing features as far as this suit and the Suit No. 329/2012 are concerned is of course the admitted position with regard to the status of the sanctioned load when the initial notices dated 17.02.2012 were replied. Since there was no question of determination and even after the issuance of notices it was consistent stand of the plaintiff that it was keeping the sanctioned load as standby, the defendant No.1 was well within their right to disconnect the electricity as the determination is not required. I thus conclude that the plaintiff does not have a prima facie case. With current status the balance of inconvenience does not lie in favour of the plaintiff and they would not suffer any irreparable loss in case of dismissal of the application as they themselves claimed that the use of sanctioned load from KESC is causing colossal losses, hence the application has no merits and the same is accordingly dismissed.

 

Dated:                                                                             JUDGE