REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.9651 OF 2003

Municipal Committee, Hoshiarpur ….

Appellant

VERSUS

Punjab State Electricity Board & Ors. ….

Respondents

J U D G M E N T

Dr. B.S. CHAUHAN, J.

1.This appeal has been preferred against the judgment and decree

dated 12.1.2001 passed in Regular Second Appeal No.1618 of 1998

by the High Court of Punjab & Haryana at Chandigarh, reversing the

judgment and decree of the trial Court, as well as of the First

Appellate Court.

Facts:

1

2.Facts and circumstances giving rise to this appeal are that the

Municipal Committee, Hoshiarpur (hereinafter called the ‘appellant’)

had taken an electricity connection on 15.6.1992, for running a

tubewell, from the Punjab State Electricity Board (hereinafter called

the ‘Board’), for supplying water for daily use to the public of the

locality at large. The average bill for the consumption of electricity of

the said connection used to be around Rs.5,000/- per month and the

said amount was paid regularly by the appellant. A bill dated

11.3.1994 to the tune of Rs.82,300/- was served upon the appellant by

the Board. As the bill was very high, the appellant instead of making

the payment, filed suit No. 304 of 1994 before the Civil Court

challenging the said bill. The Board contested the Suit by filing a

written statement contending that the connection had not been made

properly and on checking, one of the Current Trap Potents (hereinafter

called ‘CT’) was found to be reversed, thereby nullifying the action of

second CT, as a result of which only one CT was contributing to the

recording of the energy actually consumed. The meter was showing

only 1/3

rd

of the actual consumption of the energy, and once the

proper connection was made, the reading of the meter jumped three

times. In view thereof, the account of the said meter was overhauled

2

from the date of its installation and the fresh bill was rightly issued.

The appellant filed a replication contending that no opportunity of

hearing was given to it before revising the bill nor was the

checking/inspection done in the presence of any responsible officer of

the appellant. No notice was ever given by the Board to the appellant

for inspection. More over, the appellant was not in a position to pass

on the liability to its consumers.

3. After considering the facts and circumstances of the case and

appreciating the evidence on record, the trial Court vide its judgment

and decree dated 22.5.1995, decreed the suit. The trial Court came to

the conclusion that appellant had not made any attempt to tamper with

the meter nor committed theft of energy. The defect was due to the

negligence of the Board, and the appellant could not be burdened for

the same. The trial court declared the said revised bill as null and

void. Being aggrieved, the respondent-Board preferred an appeal

before the District Judge and the same was dismissed vide judgment

and decree dated 30.9.1997, holding that there was no justification for

the respondent-Board to issue a supplementary bill arbitrarily.

3

4. Being aggrieved, the respondent-Board preferred Second Appeal

No.1618 of 1998 before the High Court which has been allowed vide

impugned judgment and decree dated 12.1.2001, observing that after

correcting the wrong connection, the reading of the meter jumped

three times and therefore, from the very beginning only 1/3

rd

of the

electric energy actually consumed stood recorded by the meter.

Therefore, such a recovery was justified and there could be no equity

in favour of the appellant to withhold the payment. Hence, this

appeal.

Rival Contentions:

5. Shri K.K. Mohan, learned counsel appearing for the appellant,

submitted that the High Court committed a grave error in deciding the

Second Appeal without meeting the mandatory requirement of Section

100 of the Code of Civil Procedure, 1908 (hereinafter called ‘CPC’)

as no substantial question of law had been framed by the High Court.

The bill was revised without giving any show cause notice or

opportunity of hearing to the appellant. The High Court recorded a

perverse finding that after the correct/proper connection was made,

the meter reading jumped to three times the previous readings. The

High Court failed to note that for certain months subsequent to the

4

correction of connection, the reading shown by meter was less than

what had been shown prior to the correction, i.e., November 1993.

The appeal deserves to be allowed.

6. On the contrary, Shri Satinder S. Gulati, learned counsel

appearing for the respondent-Board, has vehemently opposed the

appeal contending that it was not that the appellant had made any

attempt to commit theft of energy or tampered with the meter. It was

merely a fault/negligence on the part of the respondent-Board that the

proper connection of the meter had not been made and after

connecting the meter properly the meter readings had shown 3 times

the consumption of electricity shown earlier. Thus, it was a case of

recovery of the amount that was due in accordance with law and as

per the actual total consumption of energy. The High Court was

justified in re-appreciating the facts without formulating a substantial

question of law in view of the provisions of Section 103 CPC. More

so, the appellant has not shown what prejudice has been caused to it,

if the High Court did not frame a substantial question of law and no

opportunity of hearing was given to it by the Board before revising the

5

bill. Thus, no interference is called for and the appeal is liable to be

dismissed.

7. We have considered the rival submissions made by the learned

counsel for the parties and perused the record.

LEGAL ISSUES:

Second Appeal: Sections 100 & 103 C.P.C.:

8.These provisions provide for the conditions precedent for

entertaining a Second Appeal and the specific manner of its disposal.

Section 100 CPC reads as follows:

“100. Second Appeal.-(1) Save as otherwise

expressly provided in the body of this Code or by

any other law for the time being in force, an

appeal shall lie to the High Court from every

decree passed in appeal by any Court subordinate

to the High Court, if the High Court is satisfied

that the case involves a substantial question of

law.

(2)……………………………………..

(3)In an appeal under this section, the

memorandum of appeal shall precisely state

the substantial question of law involved in

the appeal.

(4)Where the High Court is satisfied that a

substantial question of law is involved in

any case, it shall formulate that question.

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(5)The appeal shall be heard on the question

so formulated and the respondent shall, at

the hearing of the appeal, be allowed to

argue that the case does not involve such

question.

……………………………………………………”

Section 103 CPC reads as under:

“103. Power of High Court to determine issue of

fact.—In any second appeal, the High Court may,

if the evidence on the record is sufficient,

determine any issue necessary for the disposal of

the appeal,—

(a) which has not been determined by the lower

appellate court or both by the court of first

instance and the lower appellate court, or

(b) which has been wrongly determined by such

court or courts by reason of a decision on such

question of law as is referred to in Section 100.”

9.In Kondiba Dagadu Kadam v. Savitribai Sopan Gujar &

Ors., AIR 1999 SC 2213, this Court held as under:-

“It has to be kept in mind that the right of appeal

is neither a natural nor an inherent right attached

to the litigation. Being a substantive statutory

right it has to be regulated in accordance with law

in force at the relevant time. The conditions

mentioned in the section must be strictly fulfilled

before an appeal can be maintained and no Court

has the power to add to or enlarge those grounds.

The appeal cannot be decided on merit on merely

equitable grounds.”

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10.Further, there can be no quarrel that the right of appeal/revision

cannot be absolute and the legislature can impose conditions for

maintaining the same. In Vijay Prakash D. Mehta & Jawahar D.

Mehta v. Collector of Customs (Preventive), Bombay, AIR 1988

SC 2010, this Court held as under:-

“Right to appeal is neither an absolute right nor

an ingredient of natural justice, the principles of

which must be followed in all judicial or quasi-

judicial adjudications. The right to appeal is a

statutory right and it can be circumscribed by the

conditions in the grant ..……......The purpose of

the Section is to act in terrorem to make the people

comply with the provisions of law.”

11.A similar view has been reiterated by this Court in Anant Mills

Co. Ltd. v. State of Gujarat, AIR 1975 SC 1234; and Shyam

Kishore & Ors. v. Municipal Corporation of Delhi & Anr., AIR

1992 SC 2279. A Constitution Bench of this court in Nandlal & Anr.

v. State of Haryana, AIR 1980 SC 2097, held that the “right of

appeal is a creature of statute and there is no reason why the

legislature, while granting the right, cannot impose conditions for

the exercise of such right so long as the conditions are not so

onerous as to amount to unreasonable restrictions rendering the right

almost illusory”.

8

12.In Gujarat Agro Industries Co. Ltd. v. Municipal

Corporation of the City of Ahmedabad & Ors., (1999) 4 SCC 468,

this Court held that the right of appeal though statutory, can be

conditional/qualified and such a law cannot be held to be violative of

Article 14 of the Constitution. An appeal cannot be filed unless so

provided for under the statute and when a law authorises filing of an

appeal, it can impose conditions as well.

13.Thus, it is evident from the above that the right to appeal is a

creation of Statute and it cannot be created by acquiescence of the

parties or by the order of the Court. Jurisdiction cannot be conferred

by mere acceptance, acquiescence, consent or by any other means as it

can be conferred only by the legislature and conferring a Court or

Authority with jurisdiction, is a legislative function. Thus, being a

substantive statutory right, it has to be regulated in accordance with

the law in force, ensuring full compliance of the conditions mentioned

in the provision that creates it. Therefore, the Court has no power to

enlarge the scope of those grounds mentioned in the statutory

provisions. A second appeal cannot be decided merely on equitable

9

grounds as it lies only on a substantial question of law, which is

something distinct from a substantial question of fact. The Court

cannot entertain a second appeal unless a substantial question of law

is involved, as the second appeal does not lie on the ground of

erroneous findings of fact based on an appreciation of the relevant

evidence. The existence of a substantial question of law is a condition

precedent for entertaining the second appeal, on failure to do so, the

judgment cannot be maintained. The existence of a substantial

question of law is a sine-qua-non for the exercise of jurisdiction under

the provisions of Section 100 C.P.C. It is the obligation on the Court

to further the clear intent of the Legislature and not to frustrate it by

ignoring the same. (Vide: Santosh Hazari v. Purshottam Tiwari

(dead) by Lrs., AIR 2001 SC 965; Sarjas Rai & Ors. v. Bakshi

Inderjeet Singh, (2005) 1 SCC 598; Manicka Poosali (Deceased by

L.Rs.) & Ors. v. Anjalai Ammal & Anr., AIR 2005 SC 1777; Mst.

Sugani v. Rameshwar Das & Anr., AIR 2006 SC 2172; Hero

Vinoth (Minor) v. Seshammal, AIR 2006 SC 2234; P.

Chandrasekharan & Ors. v. S. Kanakarajan & Ors., (2007) 5 SCC

669; Kashmir Singh v. Harnam Singh & Anr., AIR 2008 SC 1749;

V. Ramaswamy v. Ramachandran & Anr., (2009) 14 SCC 216; and

10

Bhag Singh v. Jaskirat Singh & Ors., (2010) 2 SCC 250).

14.In Mahindra & Mahindra Ltd. v. Union of India & Anr.,

AIR 1979 SC 798, this Court observed:

“..... It is not every question of law that could be

permitted to be raised in the second appeal. The

parameters within which a new legal plea could be

permitted to be raised, are specifically stated in

Sub-section (5) of Section 100. Under the proviso,

the Court should be ‘satisfied’ that the case

involves a substantial question of law and not a

mere question of law. The reason for permitting

the substantial question of law to be raised, should

be recorded by the Court. It is implicit therefrom

that on compliance of the above, the opposite

party should be afforded a fair or proper

opportunity to meet the same. It is not any legal

plea that would be alleged at a stage of second

appeal. It should be a substantial question of law.

The reasons for permitting the plea to be raised

should also be recorded.”

15.In Madamanchi Ramappa & Anr. v. Muthaluru Bojjappa,

AIR 1963 SC 1633, this Court observed:

“………Therefore, whenever this Court is

satisfied that in dealing with a second appeal, the

High Court has, either unwittingly and in a casual

manner, or deliberately as in this case,

contravened the limits prescribed by Section 100,

it becomes the duty of this Court to intervene and

give effect to the said provisions. It may be that in

some cases, the High Court dealing with the

second appeal is inclined to take the view that

11

what it regards to be justice or equity of the case

has not been served by the findings of fact

recorded by courts of fact; but on such occasions

it is necessary to remember that what is

administered in courts is justice according to law

and considerations of fair play and equity however

important they may be, must yield to clear and

express provisions of the law. If in reaching its

decisions in second appeals, the High Court

contravenes the express provisions of Section 100,

it would inevitably introduce in such decisions an

element of disconcerting unpredictability which is

usually associated with gambling; and that is a

reproach which judicial process must constantly

and scrupulously endeavour to avoid.”

16. In Jai Singh v. Shakuntala, AIR 2002 SC 1428, this Court held

as under:

“….it is only in very exceptional cases and on

extreme perversity that the authority to examine

the same in extenso stands permissible - it is a

rarity rather than a regularity and thus it can be

safely concluded that while there is no prohibition

as such, but the power to scrutiny can only be had

in very exceptional circumstances and upon

proper circumspection.”

17.While dealing with the issue, this Court in Leela Soni & Ors.

v. Rajesh Goyal & Ors., (2001) 7 SCC 494, observed as under:

“20. There can be no doubt that the jurisdiction of

the High Court under Section 100 of the Code of

Civil Procedure (CPC) is confined to the framing

of substantial questions of law involved in the

12

second appeal and to decide the same. Section 101

CPC provides that no second appeal shall lie

except on the grounds mentioned in Section 100

CPC. Thus it is clear that no second appeal can be

entertained by the High Court on questions of fact,

much less can it interfere in the findings of fact

recorded by the lower appellate court. This is so,

not only when it is possible for the High Court to

take a different view of the matter but also when

the High Court finds that conclusions on questions

of fact recorded by the first appellate court are

erroneous.

21. It will be apt to refer to Section 103 CPC

which enables the High Court to determine the

issues of fact:

xx xx xx

22. The section, noted above, authorises the High

Court to determine any issue which is necessary

for the disposal of the second appeal provided the

evidence on record is sufficient, in any of the

following two situations: (1) when that issue has

not been determined both by the trial court as well

as the lower appellate court or by the lower

appellate court; or (2) when both the trial court as

well as the appellate court or the lower appellate

court have wrongly determined any issue on a

substantial question of law which can properly be

the subject-matter of second appeal under Section

100 CPC.”

18.In Jadu Gopal Chakravarty v. Pannalal Bhowmick & Ors.,

AIR 1978 SC 1329, the question arose as to whether the compromise

decree had been obtained by fraud. This Court held that though it is a

question of fact, but because none of the courts below had pointedly

13

addressed the question of whether the compromise in the case was

obtained by perpetrating fraud on the court, the High Court was

justified in exercising its powers under Section 103 C.P.C. to go into

the question. (See also Achintya Kumar Saha v. M/s Nanee

Printers & Ors., AIR 2004 SC 1591)

19.In Shri Bhagwan Sharma v. Smt. Bani Ghosh, AIR 1993 SC

398, this Court held that in case the High Court exercises its

jurisdiction under Section 103 C.P.C., in view of the fact that the

findings of fact recorded by the courts below stood vitiated on account

of non-consideration of additional evidence of a vital nature, the

Court may itself finally decide the case in accordance with Section

103(b) C.P.C. and the Court must hear the parties fully with reference

to the entire evidence on record with relevance to the question after

giving notice to all the parties. The Court further held as under:

“…..The grounds which may be available in

support of a plea that the finding of fact by the

court below is vitiated in law, does not by itself

lead to the further conclusion that a contrary

finding has to be finally arrived at on the disputed

issue. On a re-appraisal of the entire evidence the

ultimate conclusion may go in favour of either

party and it cannot be pre-judged, as has been

done in the impugned judgment..”.

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20. In Kulwant Kaur & Ors. v. Gurdial Singh Mann (dead) by

LRs. & Ors., AIR 2001 SC 1273, this Court observed as under :

“Admittedly, Section 100 has introduced a definite

restriction on to the exercise of jurisdiction in a

second appeal so far as the High Court is

concerned. Needless to record that the Code of

Civil Procedure (Amendment) Act, 1976

introduced such an embargo for such definite

objectives and since we are not required to further

probe on that score, we are not detailing out, but

the fact remains that while it is true that in a

second appeal a finding of fact, even if erroneous,

will generally not be disturbed but where it is

found that the findings stand vitiated on wrong test

and on the basis of assumptions and conjectures

and resultantly there is an element of perversity

involved therein, the High Court in our view will

be within its jurisdiction to deal with the issue.

This is, however, only in the event such a fact is

brought to light by the High Court explicitly and

the judgment should also be categorical as to the

issue of perversity vis-à-vis the concept of justice.

Needless to say however, that perversity itself is a

substantial question worth adjudication — what is

required is a categorical finding on the part of the

High Court as to perversity.

The requirements stand specified in Section 103

and nothing short of it will bring it within the

ambit of Section 100 since the issue of perversity

will also come within the ambit of substantial

question of law as noticed above. The legality of

finding of fact cannot but be termed to be a

question of law. We reiterate however, that there

must be a definite finding to that effect in the

judgment of the High Court so as to make it

evident that Section 100 of the Code stands

complied with.” (Emphasis added)

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21. Powers under Section 103 C.P.C. can be exercised by the High

Court only if the core issue involved in the case is not decided by the

trial court or the appellate court and the relevant material is available

on record to adjudicate upon the said issue. (See: Haryana State

Electronics Development Corporation Ltd. & Ors. v. Seema

Sharma & Ors., (2009) 7 SCC 311)

22.Before powers under Section 103 C.P.C. can be exercised by

the High Court in a second appeal, the following conditions must be

fulfilled:

(i)Determination of an issue must be necessary

for the disposal of appeal;

(ii)The evidence on record must be sufficient to

decide such issue; and

(iii) (a) Such issue should not have been

determined either by the trial court, or by the

appellate court or by both; or

(b) such issue should have been wrongly

determined either by trial court, or by the

appellate court, or by both by reason of a decision

on substantial question of law.

If the above conditions are not fulfilled, the High Court cannot

exercise its powers under Section 103 CPC.

16

Thus, it is evident that Section 103 C.P.C. is not an exception to

Section 100 C.P.C. nor is it meant to supplant it, rather it is to serve

the same purpose. Even while pressing Section 103 C.P.C. in service,

the High Court has to record a finding that it had to exercise such

power, because it found that finding(s) of fact recorded by the court(s)

below stood vitiated because of perversity. More so, such power can

be exercised only in exceptional circumstances and with

circumspection, where the core question involved in the case has not

been decided by the court(s) below.

23.There is no prohibition on entertaining a second appeal even on

a question of fact provided the Court is satisfied that the findings of

fact recorded by the courts below stood vitiated by non-consideration

of relevant evidence or by showing an erroneous approach to the

matter i.e. that the findings of fact are found to be perverse. But the

High Court cannot interfere with the concurrent findings of fact in a

routine and casual manner by substituting its subjective satisfaction in

place of that of the lower courts. (Vide: Jagdish Singh v. Natthu

Singh, AIR 1992 SC 1604; Karnataka Board of Wakf v. Anjuman-

17

E-Ismail Madris-Un-Niswan, AIR 1999 SC 3067; and Dinesh

Kumar v. Yusuf Ali, AIR 2010 SC 2679).

24. If a finding of fact is arrived at by ignoring or excluding relevant

material or by taking into consideration irrelevant material or if the

finding so outrageously defies logic as to suffer from the vice of

irrationality incurring the blame of being perverse, then the finding is

rendered infirm in the eyes of law. If the findings of the Court are

based on no evidence or evidence which is thoroughly unreliable or

evidence that suffers from the vice of procedural irregularity or the

findings are such that no reasonable person would have arrived at

those findings, then the findings may be said to be perverse. Further if

the findings are either ipse dixit of the Court or based on conjecture

and surmises, the judgment suffers from the additional infirmity of

non-application of mind and thus, stands vitiated. (Vide: Bharatha

Matha & Anr. v. R. Vijaya Renganathan & Ors., AIR 2010 SC

2685)

25.In view of above, the law on the issue can be summarised to the

effect that a second appeal lies only on a substantial question of law

18

and it is necessary to formulate a substantial question of law before

the second appeal is decided.

The issue of perversity itself is a substantial question of law

and, therefore, Section 103 C.P.C. can be held to be supplementary to

Section 100 C.P.C., and does not supplant it altogether. Reading it

otherwise, would render the provisions of Section 100 C.P.C.

redundant. It is only an issue that involves a substantial question of

law, that can be adjudicated upon by the High Court itself instead of

remanding the case to the court below, provided there is sufficient

evidence on record to adjudicate upon the said issue and other

conditions mentioned therein stand fulfilled. Thus, the object of the

Section is to avoid remand and adjudicate the issue if the finding(s) of

fact recorded by the court(s) below are found to be perverse. The

court is under an obligation to give notice to all the parties concerned

for adjudication of the said issue and decide the same after giving

them full opportunity of hearing.

Natural Justice:

26. The principles of natural justice cannot be applied in a vacuum

without reference to the relevant facts and circumstances of the case.

19

Thus, they cannot be put in a strait-jacket formula. “Natural justice is

not an unruly horse, no lurking landmine, nor a judicial cure-all. If

fairness is shown by the decision-maker to the man proceeded against,

the form, features and the fundamentals of such essential procedural

propriety being conditioned by the facts and circumstances of each

situation, no breach of natural justice can be complained of.” The

two rules of natural justice, namely, nemo judex in causa sua, and

audi alteram partem now have a definite meaning and connotation in

law and their contents and implications are well understood and firmly

established; they are nonetheless non-statutory. The court has to

determine whether the observance of the principles of natural justice

was necessary for a just decision in the facts of the particular case.

(Vide: The Chairman, Board of Mining Examination and Chief

Inspector of Mines & Anr. v. Ramjee, AIR 1977 SC 965; Union of

India & Anr. v. Tulsiram Patel, AIR 1985 SC 1416; and Managing

Director, ECIL, Hyderabad v. B. Karunakar, AIR 1994 SC 1074).

27. There may be cases where on admitted and undisputed facts,

only one conclusion is possible. In such an eventuality, the application

of the principles of natural justice would be a futile exercise and an

empty formality. (Vide: State of U.P. v. Om Prakash Gupta, AIR

20

1970 SC 679; S.L. Kapoor v. Jagmohan & Ors., AIR 1981 SC 136;

and U.P. Junior Doctors’ Action Committee v. Dr. B. Sheetal

Nandwani & Ors., AIR 1991 SC 909).

28. However, there may be cases where the non-observance of

natural justice is itself prejudice to a person and proof of prejudice is

not required at all. In A.R. Antulay v. R.S. Nayak & Anr., (1988) 2

SCC 602, this Court held as under:

“….No prejudice need be proved for enforcing the

fundamental rights. Violation of a fundamental

right itself renders the impugned action void. So

also the violation of the principles of natural

justice renders the act a nullity.”

29.Similarly, in S.L. Kapoor (supra), this Court held:

“The non-observance of natural justice is itself

prejudice to any man and proof of prejudice

independently of proof of denial of natural justice

is unnecessary. It ill comes from a person who has

denied justice that the person who has been denied

justice is not prejudiced.”

30.In view of the above, in case there is a non-compliance of a

statutory requirement of law or the principles of natural justice have

been violated under some circumstances, non-compliance of the

aforesaid may itself be prejudicial to a party and in such an

21

eventuality, it is not required that a party has to satisfy the court that

his cause has been prejudiced for non-compliance of the statutory

requirement or principles of natural justice.

Present Case:

31.The High Court was much impressed by the chart submitted by

the respondent-Board after correcting the connection, which reads as

under:

Month Unit | Month Unit

|

8/92 3124 | 7/932231

9/92 1841 | 8/932486

10/92 1812 | 9/93 2063

11/92 1270 | 10/937418

12/92 2032 | C.T. Connection corrected

1/93 1264 | 11/93 6171

2/93 1368 | 12/93 4656

3/93 1644 | 1/94 3012

4/93 1647 | 2/94 3359

5/93 1911 | 3/94 842

6/93 2152 | 4/94 567

------------------------------------------------------------------

On perusing the same, the High Court reached the conclusion

that prior to correct the connection, the meter was recording only 1/3

rd

of the total energy consumed, which seems to be factually incorrect.

22

32. Shri Gulati, learned counsel for the Board, could not answer

our query that in case the report/chart prepared by the Board is taken

to be correct, under what circumstances the meter reading in the

months of March and April 1994 had been 1/5

th

of the total

consumption of energy shown in August 1992 and 1/3

rd

of September-

October 1992 and 1/4

th

of December 1992. In fact, the reading for the

month of April 1994 had been 1/13

th

of the reading shown in the

month of October 1993. Meter reading for the month of October

1993, just prior to correction had been the highest i.e. 7418 units, and

after correction, readings should have been higher than the said figure.

33. The trial court while dealing with the issue after considering the

facts and appreciating the evidence on record came to the following

conclusions :

“………In case connection to one of the CT

was found to be reversed then defendants were

required to install a check meter. With the

installation of check meter, Board can opine that

the disputed meter is recording 1/3

rd

and only one

CT was contributing for recording of energy.

According to the Assistant XEN., disk of the meter

was consuming 42 seconds. From the very

beginning that is from the installation of the meter

account of the disputed meter was overhauled.

Counsel for the Board failed to site any authority

that if there is wrong connection by the Board then

account is to be overhauled from the date of the

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installation of the meter, secondly, no provision of

the Electricity Sales Manual cited from which it

could be ascertained that if the disk of the meter

consumes 42 seconds for one revolution then it is

to be presumed that the connection to the CT are

wrong. If one only CT was contributing for

recording of energy then best way for the board

was to install a check meter. After comparing the

recording of energy by both the meters, the Board

can only opine that the meter installed is not

correct one and is not correctly recording the

energy. So simply by saying that the disk of the

meter consuming 42 seconds for one revolution,

connection to the CT is not correct. Connection

were corrected on the day of checking i.e. on

5.10.93 but chart produced by the Board shows

that in the month of 3/94 units consumed were only

842 and in the month 9/92 units consumed were

1841. So, chart shows that after correcting the

connection energy consumed is not regular. The

only conclusion which should be drawn is that

account of the meter was wrongly over hauled

from the date of the installation of the meter.”

(Emphasis added)

34. The first appellate court concurred with the aforesaid findings

of the fact. However, the High Court without framing a substantial

question of law and without making any reference to Section 103

C.P.C. decided the case against the appellant by merely placing

reliance on the aforesaid chart. The two courts below had correctly

understood and appreciated the contents of the said chart and the High

Court has interfered with the concurrent findings of fact in a most

casual and cavalier manner. Such a course was totally unwarranted

24

and uncalled for. The High Court committed a grave error in

considering the findings of fact recorded by the courts below to be

perverse.

35. Shri Gulati has placed much reliance on the conditions of supply

of the electrical connection and, particularly, on Clause 23 which

reads:

“Where the accuracy of meter is not

involved and it is a case of incorrect connections

or defective CTs PTs, genuine calculation mistakes

etc., charges will be adjusted in favour of

Board/consumer, as the case may be, for the

period the mistake/defect continued. Additional

charges will be recovered by serving a

supplementary bill cum show cause notice. The

consumer may also be allowed to pay the amount

in installments.”(Emphasis added)

36.The aforesaid Clause 23 of the conditions of supply, stipulated

in the agreement of supply of energy also, clearly provides that Board

must issue a show cause notice to the consumer before the issuance of

a revised bill. It is an admitted case that no opportunity of hearing had

been provided to the appellant. The demand notice dated 7.1.1993

reads as under:

“In relation to abovementioned subject, it is to

inform you that your tubewell’s connection

Account No. MS-19 was checked by the

undersigned and the line supervisor. As per report

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working of the meter was found to be slow and the

meter was recording 1/3

rd

of the consumption. This

account of your’s as per report the amount is to be

calculated by overhauling account from 8/92 to

9/93. A supplementary bill of total amount of

Rs.73,198.00 is being sent to you alongwith this

letter for payment and it is requested to make the

payment of the bill with in the due date of

payment. This be treated as very urgent.”

37.It is evident from the above-said demand notice that no show

cause notice had been given to the appellant before revising the bill.

The Board has examined Mr. J.L. Mehta, Assistant Executive

Engineer, as DW.1 before the trial court and the relevant part of his

cross examination reads as under:

“……We did not inform the committee prior to our

visit. However, the operator of the committee was

present at that time. We did not inform the

Municipal Engineer at the time of checking,

however, the operator could have called the

Municipal Engineer at that time. The detail along

with the bill was served to the plaintiff, however,

the bill alone does not indicate about the

calculation……...”

38.It is, thus, evident from the aforesaid deposition of the witness

produced by the respondent-Board that no prior intimation of

checking had been given to the appellant, nor was any responsible

officer present at the time of checking. A copy of the checking

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report/chart was not given to the appellant for filing of objections nor

was any show cause notice given along with the demand notice. Thus,

it is a clear cut case of violation of the principles of natural justice as

well as of clause 23 of the conditions of supply. Admittedly, no check

meter had ever been installed and thus, it could not be held that the

meter did not record the quantity of energy actually consumed. In

view of the above, we do not find any force in the submissions made

by Shri Gulati that the appellant must show the prejudice caused to it

by not framing the substantial question of law by the High Court and

not giving it the opportunity of hearing prior to the sending of the

revised bill.

39.If we consider the case in the totality of the circumstances

involved herein, we are of the considered opinion that the trial court

as well as the first appellate court had considered all factual and legal

issues involved in this case. While deciding the case, the courts below

had appreciated the relevant evidence including the chart prepared and

so heavily relied upon by the respondent-Board in correct perspective.

As the Board did not install a check meter, the readings shown by the

meter after correction of the connection could not be held to be

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correct. Subsequent to the correction, the readings had not been

regular. Thus, the revised bill could not be held to be showing the

correct quantity of energy actually consumed by the appellant. In

such a fact-situation, there was no occasion for the High Court to

decide the second appeal without framing the substantial question of

law and it was not a case which could warrant consideration under

Section 103 C.P.C. Thus, the judgment and decree impugned are

liable to be set aside.

40.In view of the above, the impugned judgment and decree dated

12.1.2001 passed in Regular Second Appeal No.1618 of 1998 by the

High Court of Punjab & Haryana at Chandigarh are hereby set aside

and the judgment and decree of the courts below are restored. The

appeal is allowed. In the facts of this case there shall be no order as to

costs.

……………………………..J.

(P. SATHASIVAM)

…………………

…………..J.

(Dr. B.S. CHAUHAN)

New Delhi,

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October 19, 2010

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