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Bihar State Electricity Board etc. v. M/s Iceberg Industries Ltd. and Ors. etc.

Civil Appeal · 2020 INSC 371Decided 27 Apr 2020
Civil Appeal Nos. 7649-7651 of 2019
Justice Deepak Gupta · Justice Aniruddha Bose

Background

Iceberg Industries, a brewery, had a high-tension electricity connection with the Bihar State Electricity Board. After a billing dispute over "Annual Minimum Guarantee" charges, the Board repeatedly disconnected the company's power supply: sometimes before the payment due date had even passed, and at least once in direct defiance of a stay order from the statutory Consumer Grievances Redressal Forum. Each disconnection triggered fresh litigation, and the company eventually succeeded before a Single Judge and then a Division Bench of the Patna High Court, which held the disconnections illegal and ruled the company could not be billed minimum guarantee charges for periods when its own supply had been wrongfully cut off.

Decision Breakdown

The Supreme Court upheld the High Court's findings on all three points raised by the Board. It held that the company, despite being a high-tension commercial consumer, still qualified as a "consumer" entitled to approach the Redressal Forum under Section 42(5) of the Electricity Act. It held that disconnecting the company before the due date on its bill, and then disconnecting again after the Board had agreed to accept payment in instalments, was arbitrary and did not amount to the "neglect to pay" required to justify disconnection under Section 56. The Court specifically condemned the Board for defying the Forum's stay order and disconnecting supply anyway, calling it "dangerous executive thinking." The appeals were dismissed and the Division Bench's judgment was sustained.

Lesson Learnt

A utility cannot charge a consumer minimum guarantee or similar charges for periods during which its own wrongful or premature disconnection kept the consumer from using the service, and a government body that disobeys a statutory authority's order cannot later ask a court to protect its own legal rights while still in defiance of that order.

Official source (sci.gov.in)View Judgment (PDF)

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