' MUNIB AKHTAR, J.--- Two sets of applications fall to be decided in these connected suits. One set of applications have been filed by the respective plaintiffs seeking to have their electricity supply restored after disconnection by the contesting defendant the Karachi Electric Supply Company Ltd.
("KESC"). In one (Suit 309 of 2012) the supply has not been discontinued and the relief sought is that power should not be disrupted. In some, but not all, of the suits ad interim orders were made directing KESC to restore electricity supply. The second set of applications has been moved by KESC seeking recall and withdrawal of the orders of restoration of supply.
2. Mr. Arshad Tayebaly, ably assisted by Mr. Amel Khan Kansi and Mr. Taimur Mirza, who appeared for the plaintiffs in all the suits except Suit 359 of 2012, submitted that the plaintiffs were industrial consumers to whom KESC had been supplying electricity for a number of years. It was not in dispute that each plaintiff was fully paid up on the bills sent by KESC. Learned counsel submitted that as presently relevant, the electricity bill received by the plaintiffs had two components. One was by way of fixed charges, and this was an amount that was charged by KESC for purposes of maintaining the load sanctioned for that plaintiff. Earlier, this amount was, as the name suggests, a fixed amount which would appear as such on the bill each month and be paid accordingly.
However, it appears that since about December, 2010 onwards, the formula for computing the fixed charges has been changed by the regulator, the National Electric Power Regulatory Authority ("NEPRA"), such that, in effect, the amount varies according to the maximum load taken by the consumer at any given point during the entire month. In other words, the fixed charges are levied on the basis as though the maximum load registered for the plaintiffs' consumption at any given moment on any given date was the load utilized on each day of that month. The second component of the bill is of course the current charges which are the charges for the electricity actually consumed during that month by the consumer.
3. Learned counsel submitted that on or about 17-2-2012 each of the plaintiffs received a notice ("the Notice"), in identical form, from KESC which expressly stated that it had been issued under section 20 of the Electricity Act, 1910 ("1910 Act") read with Chapters 8 and 14 of the Consumer Service Manual ("CSM"). The CSM has been issued by and under the authority of NEPRA in the exercise of statutory powers vested in it by the Regulation of Generation, Transmission and Distribution of Electricity Power Act, 1997 ("1997 Act") and the National Electric Power Regulatory Authority Licensing (Distribution) Rules, 1999 ("1999 Rules") framed thereunder. It will be advantageous to reproduce the contents of the Notice, and as issued to the plaintiff in Suit 329 of 2012, it stated as follows:--- "Notice to consumers under section 20 of the Electricity Act, 1910 read together with Chapters 8 and 14 of the Consumer Service Manual ("CSM") issued by NEPRA- Irregular Load Consumption and Under Utilization of Sanctioned Load CONSUMER # BH000233 ACCOUNT # 2506474241260."
' For the benefit of all its consumers, KESC is introducing system improvements across the board to remove inequalities in load distribution and ensure operational efficiencies through upgrading and optimizing the electricity distribution system for all consumers so as to provide uninterrupted power supply and higher quality of services to all concerned.
' In accordance with section 20 of the Electricity Act, 1910 read together with Chapters 8 and 14 of the CSM, if a consumer uses electricity for a purpose other than for which it was sanctioned, or if the consumer has changed the load without authorization, or has no further requirement for the provision of electricity at the sanctioned load, then the licensee may on reasonable notice enter the premises of the consumer to examine and inspect any measuring apparatus or supply lines etc. To determine actual load being consumed against sanctioned load and where necessary, remove any measuring apparatus and/or supply of electricity.
' Through this 3 day notice, KESC hereby calls upon you to allow KESC inspection team access to your metering equipment and premises so as to determine the actual load being consumed by you against sanctioned load. It is also relevant to point out that from an examination of your billing record for the past 12 months, it appears that you no longer require the sanctioned load which was previously allocated to you by KESC and your actual load, consumption for a prolonged period has been materially below the sanctioned load.
' Based on the foregoing, we have duly authorized our inspectors/technicians to visit your premises in the forthcoming days to double check your metering connections and consumption/load requirements against sanctioned limits in your presence to determine the facts on the ground.
Please note that any failure by you to abide by the terms of this notice has serious consequences under the relevant provisions quoted above and KESC may if it deems fit disconnect power supply to you in the event of non-compliance hereof without further reference to you at your sole risk as to cost and consequences.
' Once KESC representative has conducted a site inspection and determined the current position of your power consumption/load needs, please note that KESC may where the sanctioned load is no longer required, disconnect power supply whether in whole or in part without further reference to you. Any security deposit where applicable lying to your account with KESC may in the 'event of such disconnection be refunded or adjusted against any dues owed by you to KESC as appropriate.
' It may kindly be appreciated that any surplus sanctioned load which is cancelled as a result of the above procedure will become available for allocation by KESC to other consumers in its network so as to match sanctioned load with demand and ensure a level playing field for all consumers without any discrimination. We therefore, thank you in advance for your cooperation in this matter."
4. Learned counsel submitted that except for one plaintiff, each of the other plaintiffs allowed KESC staff to enter their premises and permitted the inspection to be carried out in terms of the Notice. In the case of the plaintiff who initially refused to do so (being the plaintiff in Suit 329 of 2012), its electricity supply was disconnected. However, another notice was received by this plaintiff on or about 9-3-2012, and thereupon its premises were also inspected. Learned counsel submitted that each of the plaintiffs was, on inspection, handed a document which stated that it was an undertaking-cum-indemnity, and informed orally that if it did not fill in and sign the said document, its electricity supply would be disconnected. Again, it is appropriate to reproduce this document ("the Undertaking") in full:--- "This "Undertaking and Indemnity" is given at Karachi on this day of March, 2012, by Limited, having Consumer No and Meter/Account No, ' WHEREAS KESC has in the recent past provided me with various notices for irregular power consumption and non-utilization of sanctioned load in which regard KESC had expressed its intention to disconnect power supply/reduce the sanctioned load for the future in accordance with my past billing history.
' AND WHEREAS at my request, KESC has agreed to postpone disconnection of power supply in relation to irregular power consumption and under utilization of sanctioned load in consideration of the Undertaking set forth herein.
' NOW THEREFORE I hereby irrevocably and unconditionally undertake as follows:---
(1) That I henceforth shall utilize my sanctioned load upto minimum 50% and commence normal utilization of power supply from KESC to the satisfaction of KESC subject to my regular payment of monthly power consumption bills as generated by KESC.
(2) That KESC shall be entitled to review my performance under this Undertaking on a monthly basis to ensure my continuing compliance with the above.
' That I hereby indemnify KESC against any losses or damages of whatsoever nature it may incur by reason of its reliance on this Undertaking.
(4) That this Undertaking is in addition to and not in derogation of any other rights or remedies that KESC may be entitled to under the law and in particular the provisions of the Consumer Service Manual issued by NEPRA and the provisions of the Electricity Act, 1910."
5. Learned counsel submitted that except in one case (Suit 309 of 2012) the plaintiffs refused to give the Undertaking and accordingly in line with the threat made by KESC, their respective power supplies were disconnected. (The power supply of the plaintiff in Suit 309 of 2012 was of course, not disrupted.) The disconnections took place on different dates but there is no dispute that the power supply was cut off many day or, in some cases, several weeks prior to the institution of the present suits.
6. Learned counsel submitted that the reason why the plaintiffs' electricity supplies were disconnected was the allegation in each case by KESC that the sanctioned load was being under- utilized by them. He contended that no determination as such was made in this regard by KESC nor was any notice making such an allegation issued to the plaintiffs. Learned counsel further submitted that it was clear from the counter-affidavit that had been filed by KESC that its case was that the plaintiffs were using their electricity connections for a purpose other than that for which it had been sanctioned. He submitted that this was one of the grounds on which the electricity supply could be disconnected in terms of Chapter 8 of the CSM but he emphasized that under- utilization of the, sanctioned load was not the same thing as using the electricity connection for a purpose other than that for which it was sanctioned. His case therefore was that the basis on which electricity supply had been disconnected had no foundation either in law or on the facts, since no factual determination in this regard had been made by KESC and in any case the interpretation placed by KESC on the applicable provisions of the CSM was entirely erroneous.
7.Developing his point, learned counsel first took up section 20 of the 1910 Act. He submitted that if at all, the only provision therein that could apply was clause (c) of subsection (1), which allowed KESC to cut off supply and remove its supply lines, meters, etc. "where a supply of energy is no longer required". He submitted that this clause did not apply to the plaintiffs for a number of reasons. Firstly, there had been no factual determination as to whether or not the supply of energy was required. Secondly, it was for the consumer itself, and not KESC, to make such a determination.
And thirdly, even if (which was not admitted) the electricity supply from KESC was being used only for standby purposes, it was nonetheless still "required". Therefore, the plaintiffs' case, on any view of the matter, did not come within the ambit of the provision relied upon. In this context learned counsel referred to the fixed charges being levied by KESC (and regularly paid by the plaintiffs) and submitted that this component of the bill was itself sufficient to establish that the supply of energy from KESC was required by the plaintiffs. He also contended that the Notice was only a notice to enter the premises for the purposes therein stated which did not include making a determination as to whether the supply of energy was required or not. Referring also to subsection (2), learned counsel submitted that section 20 did not confer any power on KESC to disconnect the electricity supply of any consumer.
8. Learned counsel further contended that the Undertaking demanded from the plaintiffs was an act of coercion for which there was no authority or warrant in either the 1910 or 1997 Acts or the CSM or any applicable rules or regulations. He submitted that the plaintiff in Suit 309 of 2012 had been coerced into executing the Undertaking under imminent threat of discontinuance of supply. He submitted further that in its counter-affidavit as also the application seeking recall of the ad interim orders, KESC had taken the position that it could not restore the power supply to the plaintiffs since the loads that had been sanctioned to them had been given to new consumers.
Learned counsel contended that this was a mere ploy to defeat or frustrate any orders that might be made by the Court. He submitted that although the electricity supplies of the plaintiffs had been disconnected on various dates, all the new connections were given on 30-3-2012, i,e, on the very day on which ad interim orders were made by the Court. Learned counsel submitted that the applications on which such new connections had been granted dated back in some cases to 2010.
Thus, the entire exercise was a mere sham which was intended to try to create new facts on the ground and purported third party interests so that interim relief would be refused.
9, Learned counsel submitted that the exercise being carried out by KESC was not limited to the plaintiffs but also affected a. Large number of other industrial consumers who were issued notices in the same terms and compelled to execute the undertaking-cum-indemnity on the same basis.
He submitted that the aggrieved parties, through their concerned trade associations, approached NEPRA which twice made interim orders, once on 5-3-2012 and then on 12-3-2012, restraining KESC from disconnecting power supplies and restoring power where this had been done. Instead of obeying these orders, KESC filed a constitutional petition in this Court, being C.P. No,D-956 of 2012, in which interim orders were made on 15-3-2012 suspending NEPRA's order dated 12-3-2012. Learned counsel submitted that none of the plaintiffs was party to the aforesaid petition but he clarified that by means of the present suits, the plaintiffs did not challenge or impugn the issue of KESC's disobedience of the orders issued by NEPRA. He prayed that al, the ingredients for interim relief were applicable in the plaintiffs' case and they were entitled to appropriate interim relief.
10. Mr. Asim Mansoor, who appeared for the plaintiff in Suit 359 of 2012, adopted the submissions made by Mr. Arshad Tayebaly and emphasized certain factual aspects peculiar to his case. He submitted that the plaintiff operated two distinct manufacturing operations on its premises, only one of which was being supplied power by KESC. The other operation was being run entirely on self-generated power. He submitted that even the billing issued by KESC itself showed that the power being consumed was at least equal to 50% of the sanctioned load that was now being demanded. Thus, in his case, there could be no grievance that the power supply was being used for standby purposes. It appears that the plaintiff's premises were inspected once again by a KESC team on 9-4-2012 and learned counsel submitted that this inspection also established the correctness of the plaintiff's case. Learned counsel also submitted that the power generation unit installed at the plaintiff's premises ran entirely on diesel fuel and not on gas.
11. Mr. Abid Zuberi, ably assisted by Mr. Ayan Memon, counsel for KESC strongly resisted the applications for interim relief and pressed the applications seeking recall of the ad interim orders.
Learned counsel submitted that the plaintiffs had not properly disclosed to the Court the most fundamental point in issue, which was that each of the plaintiffs was generating electricity from its own (i,e,, 'captive') sources of power generation. He emphasized that the notices issued by KESC had only been sent to those industrial consumers who were utilizing captive power generation. He submitted that these consumers were utilizing the electricity supply from KESC for standby purposes., i,e,, the KESC supply was used only when their own self-generation of power failed for any reason or needed to be supplemented. He contended that this was absolutely clear from the billing history of each of the plaintiffs and it was for this reason that KESC had been forced to issue the impugned notices. He emphatically denied that the plaintiffs had suffered any losses and pointed out that although electricity supply had been disconnected long before the filing of the suits (in some cases many weeks prior thereto), it was indisputable that the plaintiffs' manufacturing facilities had continued to operate during that entire period. Learned counsel submitted that KESC did not wish to disconnect the power supply of any consumer; it was after all in the business of supplying and selling electricity. However, the issuance of the notices was necessitated on account of the use of captive sources of generation by industrial consumers and the consequent losses and wastage of load suffered by KESC. Developing this point, learned counsel submitted that each power plant operated by KESC had a certain generation capacity which was distributed amongst various grid stations attached to that plant. Each grid station had different feeder stations attached to it and power was supplied to consumers through the feeders.
The sanction of a particular load to a consumer meant, in effect, that that capacity was locked-in for that consumer and could not be utilized for anyone else. Learned counsel submitted that if a consumer was properly utilizing its sanctioned load, then of course. There was no problem.
However, if a consumer chose to use its sanctioned load only for standby purposes, then electricity from KESC was hardly, if at all, being consumed by such a consumer but the idle capacity could not be utilized for purposes of a new connection. It was precisely because this situation arose in relation to the plaintiffs and other similarly placed consumers that KESC was forced to take action, He submitted that the first paragraph of the Notice clearly and categorically stated this position and explained the matter to the consumers. He submitted that even in terms of the Undertaking, KESC was not demanding full utilization of the sanctioned load but only utilization of a- minimum 50%. He denied that there had been any coercion or any use of unlawful means to force consumers (such as the plaintiff in Suit 309 of 2012) to execute the Undertaking. In this context, learned counsel further submitted that the captive power generation used by most of the industrial customers such as the plaintiffs needed gas as its fuel, and submitted that the total amount of gas being consumed on a daily basis by such customers far exceeded the gas supply made available to KESC for running its power plants. Thus, not merely were the plaintiffs and other such consumers keeping a substantial load or capacity idle but were also utilizing another scarce resource, i,e, natural gas, and its unavailability for KESC served to further exacerbate the power crisis. He submitted that the plaintiffs were not entitled to any relief whatsoever.
12. Learned counsel for KESC further submitted, in relation to the new connections that had been given, that the process of finalizing the long pending applications had started immediately after the disconnection of electricity supply to the plaintiffs and other such consumers. He submitted that this process took some time and was ultimately finalized close to 30-3-2012 and that was the only reason why new connections were given on that date. He emphatically denied any wrongdoing or attempt by KESC to disobey the Court or to frustrate any orders that might be made on the present applications.
13. As already noted, learned counsel submitted that the serious under-utilization by the plaintiffs of the sanctioned load was based on their billing history over several months and was not something that, could be denied. He therefore, contended that a proper determination of the relevant facts had indeed been made by KESC and it was only then that the notices were issued. With reference to section 20 of the 1910 Act, learned counsel submitted that upon its proper interpretation clause
(c) of subsection (1) fully empowered KESC both to disconnect the supply of power and also to enter the consumer's premises to remove the supply lines, meters, etc. He submitted, with reference to Chapter 8 of the CSM, that the plaintiffs' case came squarely within clause 8.1 thereof.
He submitted that this clause envisaged three different situations in which power supply could be disconnected, one of which was if the consumer used "the electric connection for a purpose other than for which it was sanctioned". His case was that the use of KESC connection for standby purposes by consumers using captive power generation was precisely such a situation. Learned counsel also referred to Chapter 14 of the CSM, the third provision that formed the basis of the Notice. He compared clause 14.1 with section 20 and submitted that although there were many similarities between the two, they were not identical. His case therefore was that each of section 20, Chapter 8 and Chapter 14 were separate and discrete provisions, which independently conferred powers on KESC to take action. It was for this reason that all three had been invoked in the Notice.
Learned counsel emphasized that the action taken by KESC was entirely lawful and proper and fully within the powers conferred upon it. He submitted that the request for the Undertaking was eminently reasonable since the plaintiffs and other similarly placed consumers were only being asked to undertake that they would consume electricity up to a minimum of 50% of the sanctioned load. Learned counsel submitted that on account of the mismatch between demand and supply KESC, as the power utility, had to balance the competing and sometimes conflicting requirements of its various consumers and also ensure that it acted in an equitable manner towards all. He submitted that the methodology adopted in the present case had been developed keeping in mind all the relevant factors and could not be faulted. Learned counsel also referred to certain case-law.
14. Exercising their right of reply, learned counsel for the plaintiffs submitted, that the three provisions relied upon in the Notice were not separate and independent powers but were interrelated and it was for this reason that all three had been invoked. It was submitted that it was clear from a reading of the Notice that the grievance of KESC was an under-utilization of the load and not its utilization for a purpose other than that for which it was sanctioned. With regard to the power conferred by clause 8.1, learned counsel referred to Chapter 7 of the CSM. This Chapter relates to the tariff to be charged by a distribution company such as KESC. It was pointed out that clause 7.1 defined "tariff' as meaning, inter alia, the rates, charges, terms and conditions and sale of electric power to consumers. Clause 7.5 dealt with misuse of tariff and sub-clause (a) thereof stated that "the consumer shall, in no case, use the connection for the purpose other than for which it was originally sanctioned. In case of violation, the consumer is liable for disconnection and/or penal action" (emphasis supplied). Learned counsel submitted that this provision made clear that the corresponding words as found in clause 8.1 had a narrow and limited meaning and were to be understood and applied only in the context of issues relating to tariff. For example, if a consumer was sanctioned a load for residential purposes but started using it for commercial or industrial purposes, that would be a misuse of the tariff for which the electric supply could be disconnected.
As regards the inability of KESC to restore power supply to the plaintiffs on account of the new connections, learned counsel submitted that this was patently not correct. It was contended that the mere fact that the power of some of the plaintiffs had been restored on account of the ad interim orders without the supply of power to the new connections being disrupted was sufficient to show that the situation was not as contended by KESC. Learned counsel further submitted that in any case KESC was charging fixed charges for the sanctioned load, which meant that it was being compensated for allocating a certain capacity for use by the plaintiffs. That was the whole purpose of the fixed charges. Learned counsel also referred to certain case-law.
15. I have heard learned counsel as above, examined the record with their assistance and considered the case-law that was relied upon. The matter of the supply of electricity by power utility companies was initially the subject-matter of the 1910 Act (wherein such companies are referred to as "licensees"). Now however, the matter is regulated largely by the provisions of the 1997 Act and under the supervision of the authority thereby established, i,e, NEPRA. In the terminology developed by NEPRA, licensees such as KESC are referred to as "DISCO". (Hereinafter, unless the context indicates otherwise, the words "licensee" and "DISCO" are used interchangeably with KESC.) Section 45 of the 1997 Act regulates the relationship between that Act and other applicable laws (which principally means the 1910 Act). First however, it will be convenient to gather in one place the relevant provisions. The provisions of the 1910 Act relevant for present purposes are as follows (emphasis supplied):--- "20. Power for licensee to enter premises and to remove fittings or other apparatus of licensee.-- - (1) A licensee or any person duly authorized by the licensee may, at any reasonable time and on informing the occupier of his intention, enter the premises to which energy is or has been, or is to be, supplied by him, for the purpose of:-
(a) examining, inspecting and testing the electric supply-line, meters, maximum demand indicators or other measuring apparatus, electric wires, fittings, works and apparatus for the supply or use of energy, whether belonging to the licensee or to the consumer; or
(b) ascertaining the amount of energy supplied or the electrical quantity contained in the supply or the apparatus; or
(c) removing, where a supply of energy is no longer required, or where the licensee is authorized to take away and cut-off such supply, any electric supply lines, meters, maximum demand indicators or other measuring apparatus, fittings, works or apparatus belonging to the licensee: ' Provided that, where a consumer's apparatus is involved, no person shall be deemed to have been so authorized by the licensee unless, at the time of entry into such premises, he is in possession of a written authorization from the secretary, manager or any other officer of the licensee not below the rank of Divisional Officer in the Public Works Department: ' Provided further that previous permission of the District Magistrate shall be necessary for making such entry into the premises of a domestic consumer.
(2) Where a consumer refuses to allow a licensee or any person authorized as aforesaid to enter his premises in pursuance of the provisions of subsection (1) or, when such licensee or person has so entered, refuses to allow him to perform any act which he is authorized by that subsection to perform, or fails to give reasonable facilities for such entry or performance, the licensee may, after the expiry of twenty four hours from the service of a notice in writing on the consumer, cut-off the supply to the consumer for so long as such refusal or failure continues, but for no longer."
16. The relevant provisions of the 1997 Act are as follows (emphasis supplied):--- "21. Duties and responsibilities of distribution licensees.--- (1) The Authority may, after such enquiry as it may deem appropriate and subject to the conditions specified in this Act and as it may impose, grant a licence for the distribution of electric power.
(2) The licensee shall---
(d) establish, within three months of the issue of its licence for distribution of electric power and make available to the public, instructions specifying---
(i) procedures for obtaining service; and
(ii) the manner and procedure for metering, billing and collection of the licensee's approved charges and disconnection in case of non-payment of charges, electric power theft and use of energy for purposes other than for which it was supplied and procedures for re-connection and recovery of arrears and other charges; ....
45. Relationship to other laws.--- The provisions of this Act, rules and regulations made and licenses issued thereunder shall have effect notwithstanding anything to the contrary contained in any other law, rule of regulation, for the time being in force and any such law rule or regulation shall, to the extent of any inconsistency, cease to have any effect from the date this Act comes into force and the Authority shall, subject to the provisions of this Act, be exclusively empowered to determine rates, charges and other terms and conditions for electric power services "
' Rule 9 of the 1999 Rules provides in material part as follows (emphasis supplied): "9. Obligation to connect and supply.---(1) Within forty five days after the date of issue of the distribution licence, the licensee shall develop and submit the consumer service manual to the Authority for approval.
(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...."
17. The CSM has been developed by NEPRA in the exercise of powers under section 21 of the 1997 Act and Rule 9 of the 1999 Rules. The provisions of the CSM as presently relevant are as follows (emphasis supplied):--- "CHAPTER 7 7.1. TARIFF.
' Tariff means the rates, charges, terms and conditions for generation of electric power, transmission, interconnection, distribution services and sales of electric power to consumer's by a DISCO. DISCOs shall charge only such tariff from consumers as is approved by NEPRA and duly notified by Government of Pakistan from time to time. DISCOs shall apply to NEPRA for any change of tariff to be charged from different categories of consumers.
7.5. MISUSE OF TARIFF
(a) The consumer shall, in no case use the connection for the purpose other than for which it was originally sanctioned. In case of violation, the consumer is liable for disconnection and/or penal action.
(b) DISCO shall serve seven (7) days clear notice to the consumer who is found misusing his approval/sanctioned tariff. However, DISCO shall immediately change the tariff and shall determine the difference of charges of the previous period of misuse to be recovered from consumer. However, in the absence of any documentary proof the maximum period of such charges shall not be more than TWO billing cycles.
CHAPTER 8
81. DISCONNECTION.
' A premises is liable to be disconnected if the consumer is a defaulter in making payment of the energy consumption charges bill(s), or if he is using the electric connection for a purpose other than for which it was sanctioned, or if he has extended his load beyond the sanctioned load even after receipt of a notice in this respect from the DISCO.
CHAPTER 14 14.1 Access to the Consumer's Premises.
A duly authorized employee of the DISCO shall be entitled at all reasonable times, and on informing the occupier of his intention (after giving a notice of clear 3 days), to enter the premises to which energy is or has been, or is to be supplied by the DISCO, for the purpose of:
(a) examining inspecting and testing the electric supply lines, meters, maximum demand indicators or other measuring apparatus, electric wires, fittings, works or an apparatus for the supply or use of energy, whether belonging to the DISCO or to the Consumer, or
(b) ascertaining the amount of energy supplied or the electrical quantity contained in the supply or the apparatus, or
(c) removing, where a supply of energy is no longer required, or where the DISCO is authorized to take away and cut-off supply, any electric supply lines, meters, maximum demand indicators or other measuring apparatus, fittings, works or apparatus belonging to the DISCO, or
(d) along all other things necessary or incidental to the proper supply or maintaining such supply to the consumer's premises.
14.10. Disconnection of supply for Non-Compliances.
(a) DISCO may disconnect supply to a consumers if,
(b) The consumer has not fulfilled an obligation to comply with this Manual; and
(c) The DISCO has given the consumer 7 business days' written notice of disconnection (such notice to be in addition to the notice already given), and
(d) The consumer fails to comply with the notice."
18. The principal question that requires determination is whether the plaintiffs (and other similarly placed consumers) are utilizing their sanctioned loads for standby purposes and if so, whether KESC can disconnect their power supplies on such basis or obtain an undertaking from them that they will utilize the sanctioned load up to a stipulated minimum. The use of KESC's power supply for standby purposes means, for purposes of this decision, that the consumer is obtaining, his electricity needs from a source other than KESC (which would invariably mean the self-generation of power) and KESC's power supply is used essentially or largely if, for any reason, that other power supply fails or is interrupted or needs to be supplemented. (I may note that in what follows I do not distinguish between the submissions made by Mr. Arshad Tayebaly and Mr. Asim Mansoor, since what they had to say was complementary.)
19. When the 1910 Act is examined, there does not appear to be any provision therein which would empower the licensee to disconnect its power supply to a consumer who was using it for standby purposes. This is of course not surprising at all since such a situation could scarcely have been in contemplation when the 1910 Act was enacted or for many decades thereafter. The ability to self- generate power, as can happen nowadays, and the need to do so is a relatively recent phenomenon, which has arisen only in the past few decades when demand for electric power began to outstrip supply, and matters deteriorated to the extent that this ceased to be an intermittent situation and became a more or less continuous state of affairs. I turn, therefore, to the 1997 Act and in particular to the provisions of clause 8.1 contained in Chapter 8 of the CSM to determine whether such a power vests in KESC. This clause envisages three situations in which a DISCO may disconnect power supply: (a) if default is made in the payment of the electricity bill; (b) if the consumer uses "the electric connection for a purpose other than for which it was sanctioned"; or (c) if the consumer has extended his load beyond that which was sanctioned despite having received notice in this regard. As is clear, the crucial question is the correct interpretation, and scope and extent, of the second sub-clause. Learned counsel for the plaintiffs referred to Chapter 7 and in particular to clause 7.5(a) to contend that the second sub-clause of clause 8.1 had a narrow and restricted meaning, which was limited only to issues relating to the tariff. Since, admittedly there are no issues relating to the tariff in the present cases, learned counsel contended that clause 8.1 could not apply. After having considered the matter, I find no warrant to give the second sub-clause of clause 8.1 a narrow or restrictive meaning. As noted above, the CSM has been issued in terms of Rule 9 of the 1999 Rules. Clause (k) of sub-rule (2) of this Rule uses the words "electric power", whereas clause 8.1 of Chapter 8 uses the words "electric connection". At the same time, the other provision in terms of which the CSM has been issued, section 21 of the 1997 Act, uses the word "energy", and there are also certain other differences in the relevant portions of section 21, Rule 9 and clause 8.1 (emphasized for convenience above). Learned counsel for KESC submitted that the words used are progressively narrower in scope as one goes from the section to the rule to the clause. While this may be so, in my view, these provisions, as presently relevant, are to be understood in the same sense. The use of "energy" (section 21), "electric power" (Rule 9) and "electric connection" (clause 8.1) mean essentially the same thing, the focus being on that what is being supplied by KESC. In my view, the words of the second sub-clause of clause 8.1 are broad enough to include not merely tariff issues but also a situation wherein the consumer uses the licensee's power supply for standby purposes. The use of the sanctioned load for such a purpose is clearly substantially different from the use for which the load was sanctioned, which could only be the actual and continuing consumption, in the normal course of business, of power from the connection provided by the licensee. It is also to be noted that clause 7.5 of Chapter 7 of the CSM itself specifically provides for the procedure to be followed if electricity supply is to be disconnected for tariff misuse. It would therefore be redundant if in the very next Chapter the same provision were essentially repeated and intended to be used only for the same limited purpose. It was also contended by learned counsel for the plaintiffs that the word "use" could not mean "non- use", which was KESC's grievance, i,e,, that the plaintiffs were not using the sanctioned load.
However, the "use" of the sanctioned load for standby purposes (which is KESC's case) is just as such "use" (though of a different nature) as is "use" of the load in the normal or ordinary course. Use for standby purposes is not "non-use". In my view therefore, on its proper interpretation, the scope and extent of the second sub-clause of clause 8.1 of Chapter 8 of the CSM is broad enough to include a situation where the power supply from the licensee is being used for standby purposes.
20. Learned counsel for KESC also sought to find the necessary statutory power in section 20(1)(c) of the 1910 Act. Specifically, he referred to the words "where a supply of energy is no longer required" to contend that the scope of clause (c) extended to a situation where the licensee's power supply was being used for standby purposes. I cannot however accept this interpretation. Firstly, I have already noted, the standby situation could not have been envisaged at the time that the 1910 Act came into force and indeed for several decades thereafter. I accept that the interpretation of statutes, especially those dealing with technical matters, should be that they are "always speaking", i,e, that their meaning should be adapted and developed (if at all possible) to take into account subsequent developments. But even on this basis, the words relied upon do not advance the case put forward by learned counsel. The reason is that the words would apply only if the supply of energy is no longer "required". However, even in a standby arrangement, the supply of electricity is required, though intermittently and sporadically as and when the other (self- generated) power supply falters, fails or needs to be supplemented. Therefore, even if this interpretation were to be regarded as correct (as to which I must express my serious doubts), the standby arrangement would not come within the scope thereof.
21. But secondly, and more importantly, the key question is the proper meaning of section 20(1)(c) when read as a whole. Learned counsel for KESC submitted that this clause conferred power on KESC both to disconnect electricity supply where it was no longer required or where the licensee was authorized to take away and cut-off such supply, as well as to remove the licensee's electric supply lines, meters, measuring apparatus, fittings etc. I cannot, with respect, accept this interpretation. When section 20 is read as a whole, it is clear that the power conferred by subsection (1) is of a limited nature. It is firstly to examine, inspect and test the electric supply lines, meters, etc. On the consumer's premises (clause (a)), or secondly, to ascertain the amount of energy supplied or electrical quantity contained in the supply (clause (b)), or thirdly, to remove any electric supply lines, meters, etc. (clause (c)). The last mentioned clause is subject to an additional condition, which is that such removal can only take place where either the supply of energy is longer required or the licensee is authorized to take away and cut-off such supply. In other words, the words in clause (c) relied upon by learned counsel for KESC are in the nature of a condition precedent for the exercise of the power of removal thereby conferred. But quite obviously, the condition precedent must exist before clause (c) can be invoked. To put it differently, clause (c) does not permit the licensee to simultaneously determine that the supply of energy is not required (or that it is authorized to take away and cut-off such supply), and remove the supply lines, meters etc. These are two separate and discrete exercises, which can only be carried out sequentially and in its own terms. The power to remove is the second exercise, and is contingent upon the first exercise having been lawfully and properly completed. The first exercise is of course, a determination whether the power supply is no longer required or the licensee is authorized to take away or cut-off such supply. If no such determination has been made, then clause (c) cannot be invoked at all. The point is further strengthened by subsection (2) which allows the licensee to disconnect the power supply of a consumer who does not allow it to enter his premises as provided for in subsection (1) or to do any of the acts thereby permitted, but provides in its concluding portion that the cut-off of supply to the consumers can only be "for so long as such refusal or failure continues, but for no longer". If clause (c) had the meaning ascribed to it by learned counsel for KESC, then that would effectively make the last portion of subsection (2) redundant in many situations. An interpretation that has such an effect is to be avoided on the basis of well-settled principles of interpretation.
22. In my view therefore, the only provision from which KESC can derive the power to disconnect electricity supply to a consumer who was using the sanctioned load for standby purposes is clause 8.1 of Chapter 8 of the CSM. The next question is as to how this power is to be exercised. Quite obviously, this requires a factual inquiry and calls for a proper determination to be made specifically in this regard by KESC. Having examined the record, in my view learned counsel for the plaintiffs are correct in asserting that 116 such determination was properly made in the present cases. Learned counsel for KESC contended that the billing history of the plaintiffs, stretching over a period of several months, clearly showed that the sanctioned load was being used for standby purposes and that it could scarcely be claimed by the plaintiffs that they were not using their own sources of power generation. However, be that as it may, it was in my view incumbent on KESC to have given a proper notice in this regard to the plaintiffs and to make a determination after giving them an opportunity to respond and confronting them with the material that it wished to rely upon.
The determination would have to be a reasoned order. This is of course nothing but an application of the principles of natural justice which must be read into every statutory provision and the exercise of any statutory power (unless there are compelling reasons or express provisions to the contrary). In my view, such a requirement is clearly envisaged by the second sub-clause of clause 8.1. After all, the question is that of the disconnection of power supply. This is not something to be lightly undertaken or permitted without the licensee complying with all the procedural requirements. Furthermore, it is also to be noted that once KESC has given the notice of hearing and made its determination in terms thereof, it still cannot disconnect the power supply without giving the final notice envisaged by clause 14.10 of Cliapter 14 of the CSM. Thus, it is clear that two notices are contemplated in each case or situation where the DISCO wishes to disconnect power supply. The first is the notice which initiates the exercise (under the relevant provision of the CSM) and the second is the notice under Chapter 14 whereby the exercise is culminated. In my view, the provisions of clause 14.10 are mandatory. In the present case the record clearly indicates that KESC did not make any determination as was, in my view, required by law. Learned counsel for KESC sought to rely on the Notice itself in this regard but that can scarcely meet the requirements of natural justice. Furthermore, admittedly no notice as required under clause 14.10 was given. Since KESC was in breach of the mandatory requirements of law, it follows that the exercise of disconnection carried out (or threatened) was unlawful and improper.
23. As noted above, learned counsel for KESC submitted that section 20 of the 1910 Act on the one hand and Chapters 8 and 14 of the CSM on the other confer separate and independent powers on KESC to take action for the disconnection of electrical supply. Something therefore needs to be said on this account, which relates to the proper interpretation of section 45 of the 1997 Act. This section was examined by a learned Division Bench of this Court in Standard Chartered Bank v. Karachi Electric Supply Corporation Limited PLD 2001 Karachi 344, by which a number of connected petitions were decided. The petitioners therein contended that the powers of KESC to set the tariff under the provisions of the 1910 Act were no longer available by reason of the relevant provisions of the 1997 Act which vested these powers in NEPRA. The learned Division Bench came to the conclusion that the relevant provisions of the 1910 Act stood impliedly repealed by reason of the provisions of the 1997 Act (at pg. 366). In addition, the learned Division Bench also (at pg. 367) referred to section 45 and concluded that even on the basis thereof, the provisions of the 1910 Act ceased to apply. Learned counsel for KESC submitted that against this decision appeals were taken to the Supreme Court which were allowed by means of the judgment dated 11-12-2006. The decision of the learned Division Bench was set aside and the matters remanded to this Court for decision afresh. However, it is to be noted that the judgment was set aside on account of objection taken by learned counsel for KESC that notice has not been issued to the Attorney General for Pakistan, NEPRA and Government of Sindh by the learned Division Bench and this point was conceded by the other side. Thus, it will be seen that the matter was not decided on the merits by the Supreme Court but on a concession, though of course the impugned judgment was set aside. It appears that after the matter was remanded, NEPRA issued the relevant notifications relating to the tariff and the petitions were disposed off essentially as having become infructuous by orders dated 7-5-2010 and thereafter.
24. Since the decision of the learned Division Bench has been set aside, I am free to regard the matter of the interpretation of section 45 as res inlegra. At first sight this section appears to be fairly straightforward and apparently poses no special difficulties. However, a closer examination indicates that this is not the case. There are at least two points which require consideration. The first difficulty arises on account of the stipulation that the provisions of any other law, rule or regulation shall to the extent of any inconsistency cease to have effect "from the date this Act comes into force". Insofar as the 1997 Act itself is concerned these words do not of course pose any difficulty: with effect from the date on which the said Act came into force, the provisions of any other law, rule or regulation ceased to have effect to the extent of any inconsistency. But what about rules or regulations framed under the 1997 Act? Any such rule or regulation must necessarily have been framed some time after the 1997 Act came into force, and in many cases the relevant rules and regulations were framed many years after that date. Now, the provisions of any rule or regulation framed under any other law, if inconsistent with the rule or regulation framed under the 1997 Act would cease to have effect to the extent of the inconsistency. However, if section 45 is read literally, this would date the cessation back to the date on which the 1997 Act came into force (which was 16-12-1997). This could mean, for example, that if a rule is framed under the 1997 Act in, say, 2002, and is inconsistent with a rule framed under any other law, the latter would cease to have effect not from that year but from 16-12-1997. Clearly, this could potentially create a vacuum in the law for no apparent reason. The second aspect of section 45 that poses difficulty is the meaning to be given to the words "cease to have any effect". Ordinarily, these words are taken to mean that the inconsistent provision stands repealed. But suppose that NEPRA frames a rule or regulation that is inconsistent with a provision in, for example, the 1910 Act itself. What would be the result? Obviously, the ;tile framed by NEPRA, being subordinate legislation, could not repeal a provision in the primary legislation, i,e,, the 1910 Act and the result could therefore be that there would be two inconsistent provisions in the field with potentially serious consequences for the persons affected.
25. Taking the foregoing points into consideration, I am of the view that section 45 must be given a purposive rather than a literal interpretation. The legislative intent is clear; anything contained in, or done under, the 1997 Act is to prevail and have overriding effect over anything contained in any other law, rule or regulation. In my view,,the words "cease to have any effect" must be taken to mean only that the earlier provision, to the extent of the inconsistency, goes into abeyance and remains suspended, without being repealed, as long as the provision of the 1997 Act or any rule or regulation framed thereunder remains in the field, and this suspension arises on and from the date on which the inconsistency arises. This would apply even in the case of a rule or regulation framed under the 1997 Act being inconsistent with a provision in primary legislation such as (e.g.) the 1910 Act: the latter would remain in abeyance as long as the rule or regulation continues to be in force.
26. On the foregoing basis, when section 20 on the one hand and the provisions of Chapters 8 and 14 of the CSM on the other are compared, it appears to me that there are certain points on which there is inconsistency between section 20 and Chapter 14 in particular. To the extent that these provisions are inconsistent, the provisions of the CSM must prevail and those of section 20 must be regarded as having been suspended or gone into abeyance. I cannot therefore accept the submission made by learned counsel for KESC that section 20 and Chapters 8 and 14 independently confer separate and discrete powers on KESC. Rather, the provisions have to be read together and in case there is any inconsistency, it is the CSM that must be applied. It therefore follows that in my view, the procedure for disconnection of electricity supply, if a consumer uses the sanctioned load for standby purposes, must be that laid down in the CSM and not section 20.
27. It is also to be noted that in the second paragraph of the Notice, KESC has asserted that it can disconnect the power supply if (a) a consumer uses electricity for a purpose other than for which it was sanctioned, or (b) if the consumer has changed the load without authorization, or (c) has no further requirement for the provision of electricity at the sanctioned load. Learned counsel for KESC in particular referred to the second of the three situations (change of load without authorization). In my view, the stance adopted by KESC is not correct. The CSM only permits the DISCO to disconnect the electricity supply if the load utilized exceeds the sanctioned load, but that is of course not the case at hand. If the load is underutilized, that in and of itself does not permit the power supply to be disconnected. Even the third situation is not correctly stated: the last words "at the sanctioned load" find no support in the CSM or even the 1910 Act. Indeed, the use of these words makes the third situation indistinguishable, for all practical purposes, from the second in the facts and circumstances of the present case. In my view, it is only the first situation that could, for the reasons already stated, be a legitimate ground for disconnection of electricity supply in terms of the CSM.
28. It also follows from the foregoing that the assertion made by KESC in the third paragraph of the Notice, that the consumer concerned "no longer require[s] the sanctioned load which was previously allocated to [it] by KESC and [its] actual load consumption for a prolonged period has been materially below the sanctioned load" is different from, and extraneous to, the sole legitimate ground on which KESC could disconnect the power supply. In my view, KESC has incorrectly conflated two separate and distinct situations, namely, underutilization of the sanctioned load, and its use for a purpose other than for which it was sanctioned, i,e,, as a standby arrangement. Quite obviously, if the sanctioned load is being used for standby purposes, that will result in the load being underutilized. But it must be kept in mind that the two situations are separate and distinct. For example, a particular consumer may simply be facing (for any number of different reasons) a slowdown in its business operations, and this may last for months on end. An economic downturn, whether in Pakistan or internationally, can easily lead to such a situation. The consumer may well be using the KESC power supply as its only (or primary) source of electricity. Yet, its sanctioned capacity would be seriously underutilized. Had KESC made a proper determination as required by law (as explained in para 22 above), the correct position would undoubtedly have emerged for each plaintiff. But, as is clear from the Notice, KESC simply chose to work backwards from the consumption pattern without giving the plaintiffs an opportunity of hearing to reach a conclusion that may, or may not, have been warranted. The objection taken by learned counsel for the plaintiffs in this regard must therefore be sustained.'
29. Learned counsel for KESC submitted that it was well-settled that a mandatory interim injunction is granted only rarely and exceptionally and sought to rely on certain case-law in this regard.
However, precisely because the principle is so well settled, there is in my view no need to refer to any specific authority and therefore, it is not necessary to examine the case-law in any detail.
Learned counsel also, relying on case-law, submitted that delay defeats equity and that what constitutes delay depends on the facts and circumstances of the particular situation. In an appropriate case even a few days' delay is fatal for purposes of interim relief. Again, this is a well- settled principle and therefore there is no need to consider the case-law cited. The only question is whether these principles are applicable in the facts and circumstances of the present case. In my view, they are not. The reason is that the matter here is the supply of electricity which is an essential feature of modern day life. From the record it appears that immediately after the disconnections, the plaintiffs (and other affected consumers) approached NEPRA through their trade association by way of a common complaint and sought interim relief from the regulator. It was not therefore that they remained inactive for several days before approaching this Court with their grievance. Furthermore, in my view, if a case is properly made out, then an order for the restoration of electricity supply should, given the importance of this form of energy in everyday life, follow in the ordinary course even by way of interim relief.
30. With regard to whether interim relief should be granted, learned counsel for KESC also submitted that as new connections had been given after the disconnection of supply to the plaintiffs and other similarly placed consumers, it was no longer possible for their electricity supply to be restored. In this regard learned counsel emphasized the system of distribution of electricity which has been noted in the paras above. In my view, there is much force in the contention put forward by learned counsel for the plaintiffs that if the situation were in fact as KESC presented, then it would have been impossible for it to even have restored power in terms of the ad interim orders but that was of course not the case and power was restored in compliance of the orders of the Court. Learned counsel for the plaintiffs also submitted, correctly in my view, that KESC was after all obtaining fixed charges for the sanctioned load and that this was a commitment made by KESC with the plaintiffs that should (and could) not be disregarded. With regard to the new connections, learned counsel for KESC candidly (and quite correctly) informed the Court that those connections had not yet been energized. In my view, the case sought to be made out by KESC is also somewhat undermined by the Undertaking that it wanted the plaintiffs to execute. The Undertaking only required the consumers to utilize a minimum of 50% of the sanctioned load; if so, then the entire sanctioned capacity would continue to remain allocated and available. Thus, even if all the plaintiffs (and other similarly placed consumers) had executed the Undertaking, but only consumed power up to 50% of the sanctioned load, that would still leave a substantial portion unutilized and (as per KESC's own case) unavailable for new consumers. This is hardly consistent with the stand being taken by it with regard to loss and wastage on account of unutilized capacity.
Learned counsel for KESC also stated on instructions, in response to a question from the Court, that it was technically possible to reduce the capacity of the sanctioned load. But that is not what KESC wants. It is quite content for the consumers to utilize only a minimum of 50% of the sanctioned load, and let the remaining half be "wasted", as it were. It is also to be noted that KESC would continue getting paid the fixed charges for 100% of the sanctioned load. All this lends further credence to the objection by learned counsel for the plaintiffs, already upheld above, that what KESC was really concerned about was underutilization of the capacity, and not the use of the sanctioned load as a standby arrangement.
31. In view of what has been stated in the foregoing, I conclude that the plaintiffs have made out a case for interim injunctive relief and the equities lie in their favour. At the same time however, such relief ought not to stand in the way of KESC making a proper determination of the facts in accordance with law, and then taking, if so warranted, appropriate action by exercising the powers vested in it under the CSM. Accordingly, I dispose off the applications under consideration in the following terms:---
(a) Subject to what is stated below, the electricity connections of those plaintiffs who are enjoying supply of power, whether on account of Court orders or otherwise, shall not be discontinued or disconnected.
(b) Subject to what is stated below, the electricity supply of those plaintiffs who are not being supplied power shall be restored within seven days from (but excluding) today.
(c) Nothing in (a) or (b) above shall prevent KESC from making a proper determination in accordance with the law as explained herein above as to whether any plaintiff is utilizing its sanctioned load for standby purposes.
(d) If in the case of any plaintiff it is determined in terms of (c) that it is utilizing the sanctioned load for standby purposes then its electricity supply may be discontinued in accordance with law and subject to what is stated below, or KESC may decrease or reduce its sanctioned load by such reasonable amount as may be appropriate.
(e) If any exercise in terms of (c) is initiated within seven days from (but excluding) today in relation to a plaintiff to whom (b) applies, then its electricity supply need not be restored in terms as therein stated until the exercise is concluded but it is clarified that if such exercise is initiated after more than seven days from (but excluding) today, the electricity supply must be restored, and such plaintiff shall be deemed to be a plaintiff to which (a) applies.
(f) If any exercise in terms of (c) is initiated, and any party, whether KESC or a plaintiff, is of the view that such exercise is being unnecessarily or unreasonably delayed, obstructed, prolonged or prevented, it may apply for such directions as the Court deems appropriate, which may include a modification, in whole or in part, of any directions contained in this para 31.
' If any exercise in terms of (c) ends in a determination adverse to a plaintiff whether in whole or in part, then that plaintiff will be entitled to its remedies in accordance with law, and if it is a plaintiff who is being supplied power, no action in terms of (d) shall be taken against it for a period of seven days from (but excluding) the date of communication of the determination. [H] Nothing herein shall prevent or disentitle any plaintiff from executing the Undertaking at any time and if it does so, then the Undertaking shall apply in its own terms to both the plaintiff and KESC.