Nithyalakshmi Textile Mills (P) Ltd. v. The Additional Superintending Engineer Tamil Nadu Electricity Board Coimbatore Electricity Distribution Circle (North), Coimbatore

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 22.10.2009CoramThe Honourable Mr.Justice K.K.SASIDHARANW.PNo.3109 of 2000 Nithyalakshmi Textile Mills (P) Ltd.,rep.by its Managing DirectorR.Narayanasamy2/22. Kottai ThottamKottaipalaym, VaiyampalayamCoimbatore-110....Petitioner-vs-1. The Additional Superintending Engineer Tamil Nadu Electricity Board Coimbatore Electricity Distribution Circle (North), Coimbatore-12.2. The Executive Engineer (O & M) Tamil Nadu Electricity Board Thudialur, Coimbatore.3. The Assistant Executive Engineer Tamil Nadu Electricity Board CEDC (North) Kovilpalayam, S.S.Kulam-641 107.4. Er.V.Lakshmi Narayanan The Assistant Executive Engineer Tamil Nadu Electricity Board CEDC (North), Kovilpalayam S.S.Kulam – 641 17....RespondentsPetition under Article 226 of the Constitution of India prayingto issue a writ of Certiorarified Mandamus calling for the records ofthe third respondent in L.No.2 Mi.Po/Ko., Pa/TH/F.DKT/D/98 dated9.12.1998 and relating to the order of the second respondent inLr.No.EE/O & M/TDCR/P.Sc No.401/Kottaipalayam/D.No.107/99 dated2.2.1999 and the consequential order of the first respondent inLr.No.Vu.Se.Po/Vu.Po.2/Varai 2/Kattu.S.C.No.401/Kottaipalayam/A.1439/ 99 dated 23.12.1999 and quash the same and direct therespondents to return the amounts paid by the petitioner to the TamilNadu Electricity Board, pursuant to the orders of the respondents. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner:Mr.K.SelvarajFor respondents:Mr.J.Ravindran for TNEBORDERThe petitioner challenges the order dated 23.12.1999 on the fileof the first respondent confirming the order passed by the secondrespondent dated 2.2.1999 whereby and whereunder they were directedto pay penal charges for unauthorised use of electricity more thanthe sanctioned load.FACTUAL BACKGROUND:-2. The petitioner is a Textile Mill and holder of serviceconnection bearing S.C.No.401 with a sanctioned load of 110 H.P. Theusage of the petitioner at all point of time was below the sanctionedlimit. There was some misunderstanding between the petitioner and thefourth respondent with respect to the application submitted forsanctioning an additional load of 39 H.P as per application dated24.8.1998. The fourth respondent has been dragging them from pillarto post so as to compel them to come to his terms.3. While so, on 22 October, 1998 the Anti Power Theft Squadinspected the premises and it was alleged that the petitioner wasindulged in usage of unauthorised load of 23.3 H.P and the capacitorwas not connected to the electric circuit. In accordance with thereport submitted by the inspection team the fourth respondent issueda show cause notice on 10 December, 1998 alleging that there wasunauthorised load of 23.3 H.P in respect of the service connection ofthe petitioner and an enquiry was contemplated. The petitionersubmitted his explanation wherein they have denied the entireallegations. As per proceedings dated 9.12.1998, the fourthrespondent directed the petitioner to pay a sum of Rs.25,713/- onaccount of non connection of capacitor.4. Subsequently a show cause notice was issued by the secondrespondent and an enquiry was conducted in respect of the violationspointed out by the inspection team. After such enquiry, the secondrespondent passed an order of assessment on 2.2.1999 directing thepetitioner to pay a sum of Rs.1,48,391/- in ten monthly instalments.The said order was challenged before the first respondent by way of astatutory appeal. However the first respondent dismissed the appealas per order dated 23.12.1999. Aggrieved by the said order, theassessee is before this Court.SUBMISSIONS:-5. Learned counsel for the petitioner contended that theappellate order does not contain any reason much less justifiablereason to sustain the order passed by the second respondent.According to the learned counsel the provisions of the supply code https://hcservices.ecourts.gov.in/hcservices/ was clearly violated and the respondents have not followed theprocedure to be adopted before determining the alleged loss. Thelearned counsel further contended that it was mandatory on the partof the Anti Power Theft Squad to test the strength of the motor withthe help of a tong tester and only in the event of such a test, itwould reveal as to whether there was any violation at the instance ofthe petitioner. 6. Learned counsel for the respondents justified the orderpassed by the statutory authorities. According to the learnedcounsel the proceedings clearly shows the violation committed by thepetitioner and as such it cannot be said that the authorities werenot justified in imposing penalty as found in the impugned order.ANALYSIS:-7. The order impugned in this writ petition pertains to theappellate proceedings on the file of the first respondent. The orderof assessment was passed by the second respondent. The petitionerhas, in their explanation, pointed out certain factors whichaccording to them would show that they were not indulged in the actalleged against them. The petitioner has also pointed out that theprescribed test was not conducted by the Anti Power Theft Squad andas such the very show cause notice issued by the second respondentwas not on the basis of materials. The second respondent conducted astatutory enquiry and found that there was no basis in the contentionraised by the petitioner and accordingly the order of assessment waspassed on 2.2.1999. 8. The order of assessment was challenged before the firstrespondent. The appeal remedy was provided in the terms andconditions of Supply of Electricity. The Officers authorised toinspect the service connection, issue of show cause notice, passingassessment orders and to function as appellate authority were allprovided in the terms and conditions. The manner of disposal of theappeal was also indicated. 9. Clause 12.01 provides the manner of disposal of appeal, whichreads thus:-"The appellate authority will dispose ofthe appeal (confirm, modify or set aside theassessment) after considering the memorandumof appeal and the material placed before himby the appellant and other materialspertaining to the enquiry. The appellateauthority will furnish the reasons leading tothe conclusion arrived at by him. It shallnot be obligatory for the appellate authorityto give a personal hearing; but if a requestis made for such hearing by the appellant, https://hcservices.ecourts.gov.in/hcservices/ the appellate authority will grant personalhearing to the appellant. The appellant maybe represented by an Advocate or any otherperson at such hearing, provided that theappellant files proper vakalath or power ofattorney, a the case may be."10. Therefore the appellate authority was obliged to considerthe contentions raised in the appeal and the materials placed beforehim in support of such contentions before passing the order. The saidprovision further mandates that the appellate authority has tofurnish reasons leading to the conclusion arrived at by him. The saidprovision is clearly an indication of the fact that the appellateauthority has to deal with the points raised by the appellant in theorder and there should be reasons in support of the finding.11. The impugned order passed by the first respondent dated23.12.1999 contains no reasons much less minimum reasons as indicatedin clause 12.1 of the terms and conditions. The appellate authoritysimply narrated the background of the case and confirmed the orderpassed by the second respondent without application of mind. When thepetitioner has made valid objections against the proceedings, theappellate authority was bound to consider those objections and shouldarrive at a factual finding. Since the appeal before the firstrespondent was a statutory appeal, the entire matter was at largebefore him. His order should indicate reasons which made him toconcur with the views expressed by the original authority. The firstrespondent was not expected to deal with the appeal in a mechanicalmanner and to confirm the order without expressing his mind or thereasons which actually weighed with him to take the decision.THE CONCEPT OF REASON:-12. Right to reason is a basic right of a litigant. Theproceedings before the Administrative Authorities are not anexception to the said principle. The authorities exercisingstatutory functions are expected to consider the factual matrix inthe light of the statutory provisions governing the subject andarrived at a decision on merits. The findings so recorded must besupplemented by reasons. The parties are expected to know the reasonsfor passing the order one way or the other. Reasons would minimisethe tendency of passing orders in an arbitrary manner. The partiesto the lis in turn would be able to challenge the order bydemonstrating that those reasons were per se incorrect orinsufficient to come to a particular finding. The task of theappellate or revisional authorities would also be reducedconsiderably, in case of expressing reasons in the order of theoriginal authorities. Therefore providing reasons would help allconcerned. https://hcservices.ecourts.gov.in/hcservices/ LEGAL POSITION:-13. The Supreme Court in Goyal Enterprises v. State ofJharkhand, {(2008) 13 SCC 570, at page 571} indicated that even inrespect of administrative orders reasons should be furnished. Thefollowing paragraph would make the legal position clear. "8. Even in respect of administrativeorders, Lord Denning, M.R. in Breen v.Amalgamated Engg. Union5 observed (All ER p.1154h): ‘The giving of reasons is one of thefundamentals of good administration.’ InAlexander Machinery (Dudley) Ltd. v. Crabtree6 itwas observed:‘Failure to give reasons amounts to denialof justice. Reasons are live links betweenthe mind of the decision-taker to thecontroversy in question and the decision orconclusion arrived at.’ Reasons substitute subjectivityby objectivity. The emphasis onrecording reasons is that if thedecision reveals the ‘inscrutableface of the sphinx’, it can, by itssilence, render it virtuallyimpossible for the courts toperform their appellate function orexercise the power of judicialreview in adjudging the validity ofthe decision. Right to reason is anindispensable part of a soundjudicial system; reasons at leastsufficient to indicate anapplication of mind to the matterbefore court. Another rationale isthat the affected party can knowwhy the decision has gone againsthim. One of the salutaryrequirements of natural justice isspelling out reasons for the ordermade; in other words, a speaking-out. The ‘inscrutable face of thesphinx’ is ordinarily incongruouswith a judicial or quasi-judicialperformance.”* 14. In Rani Lakshmi Bai Kshetriya Gramin Bank v. Jagdish SharanVarshney (2009 (4) SCC 240), the Honourable Supreme Court againunderlined the necessity to furnish reasons in support of the order https://hcservices.ecourts.gov.in/hcservices/ thus:-"The purpose of disclosure ofreasons, as held by a ConstitutionalBench of this Court in S.N.Mukherjee v.Union of India is that people must haveconfidence in the judicial or quasi-judicial authorities. Unless reasons aredisclosed, how can a person know whetherthe authority has applied its mind ornot? Also, giving of reasons minimisesthe chances of arbitrariness. Hence, itis an essential requirement of the ruleof law that some reasons, at least inbrief, must be disclosed in a judicialor quasi-judicial order, even if it isan order of affirmation." 15. In Secretary, Agricultural Produce Market Committee,Bailhongal vs. Quasami Janab Ajmatalla Salamulla and another (2009(12) SCALE 564) , the issue before the Supreme Court was regardingdetermination of compensation on account of compulsory acquisition.The High Court disposed of the first appeal reducing the compensationwithout any reason. In such factual scenario, the Supreme Courtobserved thus:- "5.We are conscious of the highpendency and work load on the HighCourts. Some learned Judges, in theireffort to speed up disposals and reducependency, tend to write cryptic andshort orders. While expedition andbrevity is to be encouraged andappreciated, the importance of reasonsin support of the decision cannot beignored. If judgments in first appealsare written without reference to facts(where decision is on facts) or withoutassigning any justifiable reason/s forthe decision, they will be open tolegitimate criticism. The litigantswill be puzzled by the lack ofreasoning and will lose faith in theinstitution. Further any appellatecourt will not be able to fathomwhether the judgment is correct or not.Courts, whose judgment are subject toappeal have to remember that thefunction of a reasoned judgment are :(i) to inform the litigant the reasonsfor the decision; (ii)to demonstrate https://hcservices.ecourts.gov.in/hcservices/ fairness and correctness of thedecision; (iii)to exclude arbitrarinessand bias; and (iv)to enable theappellate/revisional court to pronounceupon the correctness of the decision.Be that as it may."16. The issue as to whether the proceedings initiated againstthe petitioner was on the basis of materials, was very much beforethe first respondent. The said authority being the statutoryauthority empowered to hear the first appeal was expected to considerthe contentions raised by the petitioner point by point and wasobliged to give independent findings with reasons. Unfortunately nosuch attempt was made by the first respondent. Therefore I am of theview that the matter requires to be re-considered by the firstrespondent.DISPOSAL:-17. In the result, the order dated 23 December,1999 on the fileof the first respondent is quashed and the matter is remanded forfresh consideration. The first respondent is directed to givereasonable opportunity to the petitioner and pass a reasoned orderdealing with each of those contentions raised by the petitioner inrespect of the proceedings initiated by the second respondent.18. The writ petition is allowed as indicated above. No costs.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarTr/To1. The Additional Superintending Engineer Tamil Nadu Electricity Board Coimbatore Electricity Distribution Circle (North), Coimbatore-12.2. The Executive Engineer (O & M) Tamil Nadu Electricity Board Thudialur, Coimbatore.3. The Assistant Executive Engineer Tamil Nadu Electricity Board CEDC (North) Kovilpalayam, S.S.Kulam-641 107. W.P.No.3109 of 2000SSK(CO)EM/12.11.09