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Petitioner: AL-ABID SILK MILLS LTD. VS Respondent: KARACHI ELECTRIC SUPPLY COMPANY LTD. and another
Court Name: Sindh High Court Judge(s): Syed Hassan Azhar Rizvi Title:AL-ABID SILK MILLS LTD. vs KARACHI ELECTRIC SUPPLY COMPANY LTD. and
another Case No.: Suit No,366 and C.M.As. Nos.3649, 3666 and 3667 of 2012 Date of Judgment:2012-05-10 Reported As: 2012 CLC 1738 Result: Application allowed Judgment ORDER ' SYED HASAN AZHAR RIZVI, J.--- By this order I intend to dispose of the above mentioned three applications listed at serial Nos.1 to 3. C.M.A. No,3649 of 2012 filed by the plaintiff under Order XXXIX, Rules 1 and 2 read with section 151, C.P.C. Is for grant of injunction with the prayer to restrain the defendant No,1 from interfering with the plaintiff's use of its generators situated on its own property as well as from carrying on with its illegal failure to supply electricity to the plaintiff and C.M.As. Nos.3666 and 3667 of 2012, moved on behalf of the defendant No,1, seeking discharge/suspension of orders dated 12-4-2012 and 17-4-2012 passed by this Court. 2. In nutshell the facts of the case is that plaintiff-company is one of the largest manufacturers of textiles and fabric in Pakistan. The factory premises is situated at Plot No,A-39 Sindh Industrial Trading Estate and also possesses a neighbouring Plot No,A-34, SITE, which is approximately 135 meters from Plot No,A-39. The said factory requires a steady supply of power and if power is not consistently provided the factory cannot function. It is further averred that due to national electricity crises, KESC has failed to provide a steady supply of power to plaintiff's company. It is also averred that in order to meet the situation. The plaintiff and other factory owners decided to set up and run its own electricity generators so that it could continue its day to day business and for this purpose the plaintiff obtained a licence from the electric Inspector. Since there was limited space at Plot No,A-39 the plaintiff set up the said generators at No,434, which is in the possession and ownership of the plaintiff. The plaintiff also obtained permission from SITE for installing an underground cable to provide electricity to Plot No,A-39 from its generators located at Plot No,A-34. He urged that the electricity so generated is not being sold or provided to any other party and only
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use for the plaintiff-company. It is also mentioned that once plaintiff's generators became operative, the plaintiff applied to KESC through letter dated 10-4-2006 for a reduction in its connected load, but no reply to the said request received. On 10-4-2012 defendant No, 1 's representatives visited the plaintiffs factory situated at Plot No,A-39 and issued a Notice bearing No,GM/IBC/SITE/2012/153 under sections 41, 43 and 44 of the Electricity Act, which reads as under:- "You are receiving electricity at your Plot No,A-39, SITE from another distant premises A-34 B, SITE which is the violation of Electricity Act as KESC is the licensee to transmit & distribute electricity in licensed area." ' To impugn the said notice the plaintiff has filed this suit for declaration. Permanent injunction and damages against the defendants with the following prayers:--- "(i) to declare that the plaintiff's use of a generator in its own private capacity, for its own use and on its own neighbouring land is not in violation of the provisions of the Electricity Act; (ii) to declare that Al Abid's undertaking to KESC issued on 10 April, 2012, and under duress and coercion, is illegal, void ab initio and without any legal force; (iii) to permanently restrain the KESC from interfering with the plaintiff's use of its generators situated on its own property (as described hereinabove) and 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; (iv) in addition to and without prejudice to the prayers made hereinabove, grant damages of Rs,100 million, with the right to revise such amount upwards as discussed hereinabove. (v) grant the cost of this suit; and (vi) any other relief which this Hon'ble Court may deem to be appropriate in the circumstances." 3. I have heard Mr. Rashid Anwer, learned counsel for the plaintiff and Mr. Muhammad Ali Lakhani, learned counsel for the defendant No,1 . 4. Learned counsel for the plaintiff has firstly contended that plaintiff-company has called in question the notice of disconnection dated 10-4-2012 issued by defendant No,1 (hereinafter referred to as KESC) against the plaintiff for illegal 'transmission' of electricity as alleged in the said notice. He submitted that KESC has maliciously misinterpreted the law and that no acts of illegal 'transmission' have been committed by the plaintiff to supply electricity to its second factory which is situated on the other side of the road through its gas generators. In this regard, he made reference to the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (hereinafter referred to as the NEPRA Act), which provides that a licence from NEPRA is necessary if someone is engaged in 'generation', 'transmission' or 'distribution within the meaning of the NEPRA Act. He submitted that plaintiffs activities clearly fall within the exemption for self-use in the case of 'generation' and distribution'. He also contended that the definition of "transmission" within the meaning of the NEPRA Act can only take place if "transmission facilities" are used. Furthermore "transmission facilities" are defined as those facilities which operate at or above the "minimum transmission voltage" of sixty-six kilovolts. Since the plaintiff's generators transfer power at eleven kilovolts, therefore they clearly do not fall within the definition of "transmission facilities" and hence no "transmission" within the meaning of the NEPRA Act is taking place and thus there is no violation of KESC's licence. He contended that the plaintiff had not violated the provisions of section 30 of the Electricity Act, 1910 and thus was not liable to be punished under the provisions of sections 43 and 44 as the second Proviso to section 30(1) grants a clear exemption to those persons who have obtained the permission of the Provincial Government. In the present case, the plaintiff has already obtained permission from the Provincial Government, thus section 43 is not applicable as there has been no violation of section 30. It is submitted that section 44 is, in any case, not applicable as it only deals with a situation where someone tampers with a KESC meter or a KESC line, which has admittedly not been done in the present case. He urged that both sections 43 and 44 only provide
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for the imposition of a fine and not for disconnection. He also urged that, without prejudice to the above argument, even if there is a violation of KESC's transmission licence then action in this regard can only be taken by NEPRA and not by KESC. He submitted that KESC tried to disconnect the plaintiff's gas generator cables and only refrained from doing so when the plaintiff was coerced into giving the undertaking attached as Annexure 'F' to the plaint: He. Therefore, submitted that the use of the plaintiff's gas generators to provide power to both of its plots is lawful and KESC should be restrained from interfering therewith. 5. Learned counsel for the plaintiff next contended that whether or not KESC can disconnect the plaintiff's power supply on the ground that it is using the connection for standby purposes only. He submitted that the plaintiff's case is different from that of other industrial consumers who use captive power plants to meet their entire load and who use KESC only when their captive power plant is non-functional. He submitted that the plaintiff's gas generators do not have a sufficient capacity to meet the plaintiff's entire load requirements and the plaintiff uses its gas generators to meet a significant portion of the load and the rest is supplied by KESC. He vehemently urged that the plaintiff uses KESC's electricity on a continuous basis and not only on a standby basis. He, therefore, submitted that the effect of the judgment of the learned Single Judge in Suit No,329 of 2012 has no applicability in the present case. Learned counsel, to distinguish plaintiffs case from that of the plaintiffs in Suit No,329 of 2012, has submitted that as far back as 2006, the plaintiff requested KESC for a 50% reduction in its sanctioned loa . Which request was ignored by KESC in 2006 and now plaintiff has sent another similar request last week. He submitted that the fact of the matter is that KESC ignored the 2006 request because if the same had been granted the plaintiff would have had to pay a lower monthly fixed fee: It is submitted that KESC having benefited by charging a higher fixed fee all these years is now estopped from changing its stance. He also urged that the plaintiff's case is however on an even stronger footing because not only does the contract not prohibit using the KESC connection for standby purposes but the KESC bill itself has two components: a fixed part and a variable part. The fixed part is payable irrespective whether or not the plaintiff uses any electricity. It is submitted that therefore KESC is being adequately compensated irrespective of whether or no the plaintiff uses any electricity. 6. Learned counsel in order to clarify the instance of KESC that it has "blocked" certain capacity for the plaintiff on the basis of its sanctioned load and it is being prevented from selling this "blocked" capacity to anyone else and hence it is suffering a loss. It is submitted that this is completely incorrect. If KESC were ,to disclose the total amount of capacity it has sanctioned and its total generation capacity it would 'be seen that the sanctioned capacity is far greater than its generation capacity. He strongly urged that it is certainly not the case that KESC has surplus electricity which goes unutilized because industrial consumers are not using their full sanctioned load. He submitted that KESC cannot meet the existing demand as a result of which it has to resort to load-shedding every single day. He, therefore, submitted that KESC should be grateful to the plaintiff for not utilizing its full sanctioned load. To negate the contention of KESC, he submitted that undertaking which KESC wanted to execute and in terms of which. The plaintiff was supposed to agree' to use at least 50% of its sanctioned load, which shows that it is acceptable to KESC if the plaintiff agreed to use even 50% of its sanctioned load. This would have meant that the remaining 50% which KESC has supposedly "blocked" for the plaintiff's use would go to waste as neither the plaintiff was using the same and nor could KESC sell it to any third party. He submitted that if KESC's contentions were really true, it would never have made such an offer. 7. Learned counsel further argued that since KESC has no contractual basis on which it can justify its illegal demands it seeks to rely upon the provisions of section 20 of the Electricity Act and the provisions of the NEPRA Act. He submitted that even the judgment in Suit 329 of 2012 which was strongly relied upon by KESC concludes that the only provision under which KESC could rely upon is
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clause 8.1 of the Consumer Service Manual. Learned counsel respectfully submitted that the plaintiff's case is even stronger than this as the provisions of section 22 of the Electricity Act, 1910 actually prohibit KESC from disconnecting the connection as long as the plaintiff is paying its bills on time. He submitted that the above referred section is clearly applicable and as long as the plaintiff is paying a fixed charge every month, KESC is being compensated and hence it cannot disconnect the electricity supply. He also made reference to the order dated 17-4-2012 passed in Suit No,329 of 2012 and stated that learned Single Judge was pleased to hold that the use of KESC's connection as a backup source rather than as a primary source constituted a use "for a purpose other than for which it was sanctioned" in terms of Clause 8.1 of the Consumer Service Manual and hence it was liable to be disconnected. It is submitted that Clause 8.1 needs to be read in its entirety and along with Clauses 7.1 and 7.5 in order to be properly interpreted. It is respectfully submitted that had the learned Single Judge been properly assisted by counsel, he might perhaps, have reached a different conclusion. He also submitted that the Consumer Service Manual has been framed pursuant to Rule 9 of the National Electric Power Regulatory Authority Licensing (Distribution) Rules, 1999 which reads as under:--- "9. Obligation to connect and supply. --- (2) The consumer service manual shall contain instructions and guidance in respect of the following matters namely:-- (k) procedure for disconnection and the charges and penalties for theft of electric power or for use of electric power for purposes other than those specified in the application for connection and service." 8. He urged that the above-referred Rule only confers the power to frame a provision in the Consumer Service Manual to deal with a situation where electric power is used for purposes other than those specified in the application for connection and service. However, this has not been followed by NEPRA as the relevant Clauses of Clause 7 and 8. Learned counsel while referring the above noted clauses, has submitted that Clause 7.1 defines the Tariff as including the terms and conditions on the basis of which the electricity has been provided and it was incumbent upon KESC to establish either in the Terms and Conditions of the Tariff set by NEPRA or in the contract between the plaintiff and KESC that there was a provision which stipulated that the plaintiff could not use the connection for standby purposes. As has already been noted no such condition has been stipulated in the contract. It is therefore submitted that KESC cannot unilaterally seek to change the bargain between the parties by now imposing such a term. He further submitted that Clause 8.1 is not a complete code and has to he read in conjunction with Clause 7.5. He also submitted that a change of use within the meaning of Clause 8.1 would be if, for instance a 'residential' connection is used in a commercial establishment. He submitted that the first part of Clause 8.1 has three limbs. The second part of Clause 8.1 however only deals with disconnection procedures in relation to the first and third limbs (i,e, non-payment and excess consumption). It does not deal with the second limb (i,e, use for a purpose other than for which it was sanctioned). It is respectfully submitted that the reason for this is that the disconnection procedure for the second limb is covered in Clause 7.5. He, therefore, submitted with utmost respect to the learned Single Judge, that his conclusion that use of KESC's connection as a backup source rather than a primary source constitutes a use "for a purpose other than for which it was sanctioned" is not sustainable. 9. Learned counsel lastly argued that there are several cases wherein the Court has ordered restoration of the electricity supply, which include decisions given by three separate Division Benches of this Court including a decision in which one of the plaintiffs in one of the connected cases of Suit 329 of 2012 was given interim relief in that the Division Bench ordered the immediate restoration of his electricity. He placed reliance upon the cases of MUHAMMAD ASLAM v. KESC (2006 MLD 1540), ERUM HEIGHTS RESIDENTS WELFARE ASSOCIATION v. KESC (2001 CLC 321), MUHAMMAD
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JAWAID v. KESC (HCA 54 of 2012) HAJI SHER MUHAMMAD v. WAPDA (PLD 1988 Lahore 511) WAPDA v. AMIN ICE FACTORY (2001 MLD 1287). He respectfully submitted that the Division Bench judgments suggest that right to electricity may be tantamount to being a fundamental right covered by Article 9 of the Constitution (Right to Life). 10. Learned counsel submitted that the plaintiff has made out it a prima facie case, the balance of convenience is in its favour (as KESC will not suffer any harm by providing electricity as it will be paid for the same) and the plaintiff will suffer irreparable harm (as it will have to shut down its factory on those days of the week when there is gas load-shedding and/or when its gas generators need maintenance and this will cause it to default on its export commitments and thereby lose its customers to its competitors). He therefore respectfully prayed that this Court may be pleased to allow the plaintiff's Injunction Application and to dismiss the defendant No,1' s two applications. 11. On the other hand, Mr. Muhammad Amin Lakhani learned counsel for the defendant No,1 has challenged the maintainability of the application for temporary injunction. He argued that the prayer sought through the instant application when read in conjunction with the main , prayer to the suit has a cumulative effect of the final prayers in the suit. He argued that the prayers contained in the application co-relate direction with the prayers contained in the main suit. He submitted that whilst entering upon an adjudication of the listed application, this Court will look into the merits of the case and whilst determining a prima face case for the plaintiff, appreciate the validity or otherwise of KESC action. He submitted that the plaintiffs primary motive through the instant suit is to seek a restraint against KESC from disconnection its power supply and if the temporary injunction as prayed for is granted by this Court the plaintiff would then be granted the final relief as contained in prayer clauses (i). (ii) and (iii) as the temporary injunction sought by the plaintiff is mandatory in form. He has drawn my attention to the case report in PLD 1993 Karachi 190 and the principle settled therein for grant of mandatory injunction against Corporation. He submitted that as per the principle reported in the said citation, the plaintiff is not entitled to grant of a mandatory injunction inter alia on the grounds that at such time when the plaintiff had approached this Court, the supply of electricity had already been disconnected. He also submitted that on the day when the instant suit was filed the plaintiff was without KESC's power supply. He, therefore, submitted that in view of the above cited case, this court may not grant a 'status quo Ante' to restore a situation that did not exist at the time when the instant suit was filed. 12. Learned counsel contended that the facts on ground are different from the facts as pleaded and argued before this Court by the plaintiff.; ' He contended that the plaintiff has, maliciously and with designs to derive unlawful benefits suppressed facts and has not made necessary disclosures before this Court. He also contended that proof of such fact lies in the conduct of the plaintiff, who has notwithstanding its right to a rejoinder/rebuttal, failed to deny and or derogate against the factual pleas put forth by KESC and the only point in issue raised by the plaintiff is the interpretation of the law relevant, i,e, The Electricity Act, 1910. The Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 and the Consumer Services Manual. He further contended that the plaintiff has sought to mislead this Court by pressing the issue of notice dated 10-4-2012 and wrongly contended that the disconnection cased upon its power supply from KESC is as a result of the issuance of the said notice. He contended that admitted fact of the matter is that the disconnection of the plaintiffs power supply from KESC and the notice dated 10-4-2012 are two distinct issues and have no relevance or nexus with each other and this fact is confirmed from a bare reading of the application wherein the plaintiff itself identifies the two issues and distinct and separate. He submitted that the plaintiff has merely sought to wrongly conjoin the two issues and convolute the same to further its malicious designs and motives. He submitted that it is clarified that the
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disconnection caused upon the plaintiff's power supply is for reasons that are independent of the notice dated 10-4-2012 and do not concern themselves with the act of illegal "Transmission" of electricity being committed by it. He, therefore, submitted that a parallel needs to be drawn in between the two issues and the same must be necessarily distinguished and separated for a fair and reasonable adjudication. 13. Mr. Muhammad Ali Lakhani, Advocate, in response to 'the arguments of Mr. Rashid Anwer learned counsel for the plaintiff with regard to the transmission of electricity from one property to another, has contended that it is an admitted fact that plaintiff is currently engaged in 'transmitting' illegally electricity from the second property to the first property. He contended that the first property and the second property are situated in the same vicinity, but they are at a fair distance from one another, which can be verified from the "Site Inspection Report" attached with the KESC's counter affidavit to the Application. He also contended that it is an admitted fact that the plaintiff maintains Four (4) 900 KW "Gas Generators" at the second property and through a steady supply of gas is generating and transmitting electricity to the first property for the purposes of its manufacturing processes being carried out thereon. He further contended that the plaintiff is currently acting as an independent power generator and is, therefore, infringing upon KESC's exclusive rights to conduct sale of electricity in Karachi. He urged that any action that derails and/or denies benefits to a party exercising exclusivity with regards to a particular matter shall constitute infringement of its rights in law and the law binds all persons not duly licensed to not engage in "Transmission" of electricity. In this regard, he submitted that KESC relies upon the provisions of section 2(26) of the NEPRA Act. Which defines the term "Transmission". The term "Transmission", for the present purposes means and includes the ownership, management or control of transmission facilities. He submitted that as necessary corollary, it would be advantageous to appreciate section 2(27) as well, wherein the term "Transmission Facility" has been defined to mean and include electrical transmission facilities operating at or above the minimum transmission voltage. He submitted that the term "Minimum Transmission Voltage" has been defined in section 2(19) to mean sixty-six kilovolts or such other voltage that the Authority may determine to be the minimum voltage at which electrical facilities are operated when used to deliver electric power in bulk. He urged that at this juncture that the plaintiff is using (Four) 04 900 KW "Gas Generators" and is transmitting over 2800 KW from the second property to the first property. He, therefore, submitted that the violation of law, insofar as the NEPRA Act is concerned by the plaintiff is apparent on the face of it. 14. Learned counsel further made reference to section 16 details the need of a "Transmission Licence" and restricts all persons from transmitting electricity without the necessary grants from the competent authority. He urged that it is not the plaintiff's case that it possesses a valid and lawful "Transmission Licence". He submitted that the plaintiff relies upon two Letters dated 25-6- 2004 and 10-2-2012 wherein the Electricity Inspector Karachi has allowed it to install "Gas Generators"- at the second property, but the plaintiff hits wrongly and maliciously represented the foregoing Letters as necessary grants in terms of the NEPRA Act. He submitted that insofar as the NEPRA Act is concerned, the "Authority" is the National Electric Power Regulatory Authority in terms of section 2 (i) thereof. He also submitted that even otherwise, the above letters merely entitle the plaintiff, if at all, to install "Gas Generators" on the second property and do not under any circumstances entitle the plaintiff to "Transmit electricity". He also made reference to section 30 of the Act of 1910, which enforces that no person, other than a licensee duly authorized under the terms of his license, shall transmit or use energy at a rate exceeding two hundred and fifty watts. He submitted that the imposition is on "Transmitting"- and various conditions have been provided for in section 30 under which a person cannot "Transmit" electricity. He emphasized that the
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foremost prerequisite is the issuance of a valid license granted by the Authority. He also relied upon sections 43 and 44 (a) and (b). 15. Learned counsel, developing the above point, submitted that the term "Transmit" does not find a definition in either the NEPRA Act and/or the Act of 1910. He, however, submitted…
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