IN THE HIGH COURT OF JUDICATURE AT PATNA

Civil Writ Jurisdiction Case No.3292 of 2017

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M/s. Venky Steel Private Limited Son of late Brahmdeo Prasad Resident of

Srikrishna Nagar, P.O and P.S. Begusarai, District Begusarai.

... ... Petitioner/s

Versus

1.The Bihar State Power Holding Company Limited Vidyut Bhawan, Bailey

Road, Patna through its Chairman-cum-Managing Director

2.The North Bihar Power Distribution company Limited,Vidyut Bhawan,

Bailey Road, Patna, through its Managing Director

3.The Chief Engineer Commercial,North Bihar Power Distribution company

Limited, Vidyut Bhawan, Bailey Road, Patna

4.The Electrical Superitending Engineer, North Bihar Power Distribution

company limited, Electric Supply Circle, Purnea

5.The Electrical Executive Engineer, Commercial and Revenue, North Bihar

Power Distribution Company Limited, Electric Supply Circle, Purnea.

... ... Respondent/s

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Appearance :

For the Petitioner/s: M/s Suraj Samdarshi

Avinash Shekhar,

Abhilasha Jha

Simran Kumari, Advocates

For the Respondent/s: Mr. Kunal Tiwary, Advocate

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CORAM: HONOURABLE JUSTICE SMT. G. ANUPAMA CHAKRAVARTHY

ORAL JUDGMENT

Date : 27-07-2026

1. The petitioner has filed the Writ

application for the following reliefs:

“(i) For quashing of the order dated

9.2.2017 passed in Appeal Case No. 10

of 2014 by the Electricity Ombudsman,

Bihar Electricity Regulatory Commission,

by which despite acknowledging the fact

that the petitioner was not supplied

energy to the extent of its contract

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demand, the learned Ombudsman

refused to grant remission, rather asked

the parties to approach the Bihar

Electricity Regulatory Commission for

making such provision, as being wholly

illegal and arbitrary and contrary to the

agreement.

(ii) For a direction to the respondents

not to take any coercive step for

realization of the bill dated 9.11.2009

issued against minimum guaranteed

charges during the period when the

transformer was burnt and the supply

was not to the extent of contract

demand, in terms of the agreement; and

for any other relief or reliefs to which

the petitioner is found entitled."

2. The brief facts culled out of the Writ

petition are that the petitioner is engaged in the

business of manufacturing alloy steel ingots

through an electrical induction furnace, for which

electricity is an essential raw material.

3. The petitioner entered into a High

Tension Specified Service (HTSS) Agreement dated

27.02.2006 with the erstwhile Bihar State

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Electricity Board for a contract demand of 1887

KVA with 33 KV supply for running its industrial

unit. The petitioner stated that under the

applicable tariff, HTSS consumers are liable to pay

demand charges based on the contracted load,

which presupposes assured supply of electricity by

the licensee.

4. It is the case of the petitioner that in

the month of October, 2009, due to breakdown of

the 50 MVA transformer at Purnea Grid Sub-

Station, there was severe disruption in power

supply and the petitioner could not operate its

induction furnace due to insufficient and

interrupted supply of electricity. Despite of several

representations dated 04.07.2009, 03.09.2009,

04.09.2009, 08.09.2009 and 09.10.2009, the

electricity supply could not be restored to the

required level.

5. The Learned counsel for the

petitioner submits that the failure of the

respondents to supply electricity to the extent of

the contracted demand, a bill dated 09.11.2009 for

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the month of October, 2009 was raised charging

minimum guarantee/demand charges amounting

to approximately Rs.13.20 lakhs.

6. Aggrieved by the said action, the

petitioner earlier approached this Court by filing

C.W.J.C. No.15450 of 2009, which was disposed of

with liberty to approach the Consumer Grievances

Redressal Forum constituted under the Electricity

Act, 2003. The Consumer Grievances Redressal

Forum, after considering the matter, observed that

the petitioner's claim for remission on account of

interrupted and insufficient power supply was

justified, but directed the respondents to approach

the Bihar Electricity Regulatory Commission for

framing an appropriate mechanism for remission.

The appeal preferred before the Electricity

Ombudsman was also disposed of without granting

the remission claimed by the petitioner.

7. The grievance of the petitioner is

that despite the admitted fact of interrupted and

insufficient power supply, the respondents have

charged the petitioner on the basis of 100%

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minimum guarantee without granting

proportionate remission for the period during which

the required electricity supply was not made

available.

8. The Learned counsel for the

petitioner further submits that the HTSS tariff

structure itself, is based on the presumption that

the licensee would ensure supply of electricity up

to the contracted demand, and the petitioner has

been charged demand charges on the basis of

such assurance.

9. It is submitted that during the

relevant period, due to failure of the respondents

to supply electricity to the extent of the contracted

demand owing to the breakdown of the

transformer, the petitioner's industrial unit

remained non-functional and, therefore, charging

the petitioner for 100% of the contracted demand

without granting proportionate remission is wholly

unjust and arbitrary.

10. The Learned counsel for the

petitioner further submits that the Consumer

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Grievances Redressal Forum itself recorded a

finding that the petitioner's claim for remission was

justified, but the petitioner has not been granted

any effective relief. It is contended that the

absence of a specific formula in the tariff cannot

deprive the petitioner of the benefit of remission

when the respondents failed to supply electricity

as agreed under the agreement.

11. It is submitted that demand

charges are payable on the basis of the maximum

electricity supplied up to the contracted demand.

When the licensee fails to provide electricity up to

the contracted demand, it would be inequitable to

charge the consumer for the entire contracted

load.

12. The Learned counsel for the

petitioner further contends that the action of the

respondents in raising bills without considering the

actual supply position is arbitrary and violative of

Article 14 and Article 19(1)(g) of the Constitution of

India and prayed that the impugned orders

passed by the Consumer Grievances Redressal

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Forum and the Electricity Ombudsman are to be

set aside and appropriate remission be granted to

the petitioner for the period of insufficient power

supply.

13. In support of his submissions, the

Learned counsel for the petitioner relied upon the

rulings passed by Hon'ble Supreme Court in

Raymond Limited vs. Madhya Pradesh

Electricity Board (2001 (1) SCC 534,

paragraph 21) and Tata Iron & Steel Company

vs. Bihar State Electricity Board (AIR 1989

Patna 119, paragraph 12) .

14. A counter affidavit was filed on

behalf of the respondent Nos. 2 to 5. Learned

counsel appearing on behalf of the respondent

Nos. 2 to 5 submits that the present Writ petition is

not maintainable and is liable to be dismissed.

15. It is submitted by the Learned

counsel for the respondents that the petitioner has

challenged the order dated 09.02.2017 passed by

the Electricity Ombudsman in Appeal Case No. 10

of 2014, whereby the claim of the petitioner for

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remission in maximum demand charges was not

accepted. It is submitted that the Consumer

Grievances Redressal Forum, vide order dated

11.06.2014 passed in Case No. 15 of 2013, had

already considered the claim of the petitioner and

found that in absence of any provision in the tariff

for such remission, the petitioner was not entitled

to the relief claimed.

16. The Learned counsel for the

respondents submits that the petitioner is a HTSS

consumer having a contract demand of 1887 KVA

with 33 KV supply and is governed by the tariff

provisions applicable to HTSS category. Under the

applicable tariff, the billing methodology itself

provides for consideration of hours of supply and

minimum monthly charges, and therefore, the

petitioner cannot claim any further remission

beyond the provisions contained in the tariff.

17. It is further submitted by the

Learned counsel for the respondents submitted

that the petitioner is wrongly relying upon Clause

13 of the earlier HT agreement, which has no

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application to HTSS consumers after introduction of

the special tariff applicable to HTSS category. The

tariff framed by the Bihar Electricity Regulatory

Commission has statutory force and is binding

upon both the licensee and the consumer.

18. The Learned counsel for the

respondents further submits that the electricity

supply to the petitioner was made through

Gulabbagh Sub-Station from a 20 MVA transformer

and the allegation of complete disruption of supply

due to breakdown of the 50 MVA transformer at

Purnea Grid Sub-Station is incorrect and

misleading. The bills raised for the period in

question were prepared strictly in accordance with

the applicable tariff provisions. The tariff already

contains a mechanism for calculation of minimum

charges based on the actual hours of supply and

the petitioner has already been given the benefit

available under the tariff. Therefore, no further

remission against maximum demand charges is

permissible.

19. The Learned counsel for the

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respondents accordingly contends that there is no

illegality in the orders passed by the Consumer

Grievances Redressal Forum and the Electricity

Ombudsman, and the present Writ petition, being

devoid of merit, is liable to be dismissed.

20. Heard the Learned counsel for the

parties and perused the records.

21. The Hon'ble Apex Court in

Raymond Limited (supra ) observed in paragraph

21 as follows:

“21. So far as the cases under

consideration and the liability of the

consumers relating to minimum guarantee

are concerned, the relevant clause

relating to minimum guarantee charges as

well as the tariff notification relied upon,

would go to show that what was

guaranteed was not the payment of a flat

sum or amount of money to be calculated

with reference to a particular number or

percentage of units, dehors the quantum

of electrical energy distributed and

supplied by the Board. In other words, the

guarantee was of “… such minimum

consumption as when calculated at the

tariff…” will yield a particular

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monthly/annual sum to the Board. Even

going by the tariff notification which

prescribes also a minimum entitling the

Board to collect it [vide clause 21(b)] it

merely casts liability on the consumer to

“guarantee a minimum monthly

consumption equivalent to 40% load

factor of the contract demand”.

Consequently, for the consumer to honour

his/its commitment so undertaken to give

a minimum consumption there should

essentially be corresponding supply by the

Board at least to that extent, without

which the consumption of the agreed

minimum is rendered impossible by the

very lapse of the Board. The minimum

guarantee, thus, appears to be not in

terms of any fixed or stipulated amount

but in terms of merely the energy to be

consumed. The right, therefore, of the

Board to demand the minimum

guaranteed charges, by the very terms of

the language in the contract as well as the

one used in the tariff notification is made

enforceable depending upon a

corresponding duty, impliedly undertaken

to supply electrical energy at least to that

extent, and not otherwise. It is for this and

only reason we find that the ultimate

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conclusion arrived at by the Full Bench of

the High Court does not call for any

interference in these appeals.”

22. The Division Bench of this Court in

Tata Iron & Steel Company (supra ) observed in

paragraph 12 as follows:

“12. The words ‘constant

supply of electrical energy’ must mean

that continuous supply of electrical energy.

That to us appears to be the plain meaning

of the words used. In the modern context

where even our day to day life is so much

dependent upon supply of electricity, it is

not too much to expect that the Board

should supply electrical energy throughout

the 24 hours. However, having regard to

the fact that annual charges are payable

by consumers who generally require

electrical energy in larger quantities than

any ordinary domestic consumer for

carrying on his business or establishment,

the annual charges payable by him have a

direct relationship with the supply of

electrical energy to him at a time when he

can consume the supply. The minimum

guaranteed consumption itself implies that

the energy is supplied when it can be

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consumed. No doubt, even beyond his

normal working hours, such a consumer

requires electrical energy for other

purposes, such as security lighting etc.

However, the consumption for such

purposes is so small as compared to the

main purpose for which electrical energy is

taken, that it may be ignored in the matter

of determining the liability for annual

charges. So viewed, ‘constant supply’ in

the context of annual charges must mean

continuous supply during the normal

working hours of the consumer when the

supply can be consumed. This to us

appears to be a fair interpretation of the

agreement having regard to its purpose,

commercial nature and preacticability. We

are of the view that when the Board wants

a guarantee from the consumer about

minimum units it would consume, any

prudent businessman would agree to pay

that amount only if the Board fulfils its

obligation. If in fact it is found that there

had not been constant suppy of electricity

at the contract demand during the period

the factory of the petitioner was expected

to work, the petitioner can certainly claim

that it is entitled to a reduction in annual

charges proportionate to the period for

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which there was no supply of electrical

energy or supply as per the contract

demand. The case of TISCO is that its units

at Adityapur complex work 24 hours and

electrical energy at the contract demand is

required for all 24 hours. It was urged that

in this case, constant supply must,

therefore, mean constant supply for 24

hours. On behalf of the Board it was not

stated that TISCO's units at Adityapur

complex do not work for 24 hours.”

23. Upon considering the rival

submissions advanced by the learned counsel for

the parties and on perusal of the materials

available on record, this Court finds that the core

issue involved in the present Writ petition is with

regard to the entitlement of the petitioner for

remission in maximum demand charges on

account of failure of the respondents to supply

electricity to the extent of the contracted demand.

24. It is not in dispute that the

petitioner is an HTSS consumer having a contract

demand of 1887 KVA with 33 KV supply and that

the petitioner was liable to pay charges as per the

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applicable tariff. The grievance of the petitioner is

that despite the obligation of the licensee to supply

electricity, as per the contracted demand, the

petitioner was subjected to demand charges

without granting proportionate remission for the

period during which adequate supply was not

made available.

25. This Court finds that the Consumer

Grievances Redressal Forum as well as the

Electricity Ombudsman failed to properly

appreciate the effect of the contractual obligation

and the tariff provisions in the light of the law laid

down by the Hon'ble Supreme Court in

Raymond Limited vs. Madhya Pradesh

Electricity Board and the judgment of this Court

in Tata Iron & Steel Company vs. Bihar State

Electricity Board.

26. The Hon'ble Supreme Court has

categorically held that the concept of minimum

guarantee charges is not an unconditional liability

of the consumer and such liability is dependent

upon the corresponding obligation of the licensee

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to supply electricity to the required extent.

Similarly, this Court in Tata Iron & Steel

Company (supra) has held that where the

licensee fails to provide supply at the contracted

demand, the consumer is entitled to claim

proportionate reduction in charges.

27. In the present case, the Forum as

well as the Ombudsman have proceeded on the

ground that there was no specific provision or

formula in the tariff for granting remission

28. The absence of a specific formula

cannot defeat the substantive right of the

consumer, when the obligation of the licensee to

supply electricity at the contracted demand is not

fulfilled. The authorities were required to examine

the claim of the petitioner, in the light of the

contractual terms and the principles laid down by

the Hon'ble Supreme Court and this Court.

29. Therefore, this Court is of the

considered view that the orders passed by the

Consumer Grievances Redressal Forum and the

Electricity Ombudsman do not stand the test of law

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and require interference in exercise of jurisdiction

under Article 226 of the Constitution of India.

30. Accordingly, the order dated

09.02.2017 passed by the Electricity Ombudsman,

Bihar Electricity Regulatory Commission in Appeal

Case No.10 of 2014 is hereby quashed and set

aside.

31. Accordingly, the Writ petition is

allowed.

32. Interlocutory Application(s), if any,

shall stand disposed of.

Spd/-

(G. Anupama Chakravarthy, J)

AFR/NAFR NAFR

CAV DATE NA

Uploading Date 05.08.2026

Transmission Date