1. THESE appeals by the opposite parties to Complaint No. 278 of 1999 are directed against Distt. Forum, Kota''s order dated 4.7.2001.
2. THE undisputed facts are that Western Railway, Kota Division (the complainant) is the consumer of the services of the Madhya Pradesh
Electricity Board (the ''Board'') for supply of electrical energy in bulk at complainant''s premises at Suwasra Traction Sub-station for the purpose
of Railway traction in the Varodara-Ratlam-Nagda-Kota route. As per terms and conditions of the agreement, made between them on 5.6.1987,
the complainant railway was required to pay the bill of charges within 21 days of the date of the bill failing which a surcharge at the rate of 2 per
cent of the amount of bill was chargeable from the complainant.
For the month of September, 1998 the Board raised a demand of Rs. 87,69,519/- against the complainant through two bills one for Rs.
85,11,605/- and the other for Rs. 2,57,914/- both dated 16.10.1998. The due dates for making payments of the amounts in the two bills by
cheque was 3.11.1998 and in cash or by Demand Draft it was 6.11.1998. The complainant Railway obtained on 3.11.1998 11 Demand Drafts
from the State Bank of Bikaner and Jaipur, Branch at Kota (Kota bank) for the aforesaid amount of Rs. 87,69,519/- and delivered the same to
the Board on 6.11.1998. The drafts had been drawn on State Bank of Indore, Branch Mandsaur (M.P.) (Mandsaur bank). The complainant
delivered the DDs for Rs. 87,69,519/- to the Board on 6.11.1998 i.e., by the due date. The Board delivered the same to their Banker namely
State Bank of India, Mandsaur (SBI Mandsaur) for collection. The Mandsaur Bank, however, declined to honour the drafts for want of any
''Advice'' to them from Kota bank in that behalf. They, therefore, returned the same to SBI, Mandsaur on 7.11.1998. However, the Mandsaur
bank received the drafts back on 8.11.1998 and remitted the amounts of the drafts to State Bank of India, Mandsaur, which credited the same in
Board''s account on 9.11.1998.
In the bills for the month of October 1998, the Board charged a sum of Rs. 1,37,294/- from the complainant on account of ""surcharge for delayed
payment (SDP)"". The complainant paid the aforesaid amount under protest and filed the complaint alleging deficiency in service on the part of the
present appellants and the Kota Bank.
3. THE Distt. Forum held that the appellants and the Mandsaur bank had rendered deficient service to the complainant. It, therefore, required the
appellant to refund the sum of Rs. 1,37,294/- with interest at the rate of 12 per cent per annum payable from the date of payment thereof or adjust
the same against the future liability of the complainant and also pay cost at Rs. 500/- to them.
The Forum required the Mandsaur bank also to pay compensation at Rs. 10,000/- and cost at Rs. 500/- to the complainant. The complaint as
against Bank was dismissed. We heard the parties and examined the material on the record of the Forum. Board''s Appeal No. 1182 of 2001:
4. THE learned Counsel for the appellant Board vehemently urged that as back as on 23.1.1996 the Board had taken the decision to accept the
payment of Board''s dues through DDs/bankers cheques, issued on a Bank other than the State Bank of India, Mandsaur (for Mandsaur Circle)
provided the same was deposited at least three days earlier to due date of payment by cash and any delay in crediting the amount in the Boards
Account by due date will attract surcharge as per rules. In support of such argument reliance was placed on Board''s letter dated 13.2.1996.
We find that the learned D.F. has categorically pointed out that the decision of the Board dated 23.1.1996, referred to above, was never
communicated by the Board to the consumer Railways. Even in the first part of this letter the appellants themselves had accepted that payment of
bills through demand drafts were treated at par with payment in cash in the past. The alleged decision of the Board was neither reflected in
Board''s bye-laws/regulations/rules nor was ever expressed through the conduct of the appellant. The drafts were undisputedly prepared on
3.11.1998 and were delivered to the Board on 6.11.1998. Though the drafts were drawn on State Bank of Indore at Mandsaur and not on State
Bank of Indore at Mandsaur, yet the Board raised no objection against the drafts at the time of receiving them from the complainant on 6.11.1998
and delivered the same to their banker for collection from another Bank that too was located at Mandsaur. These facts clearly speak that payment
of the two bills had duly been made by the consumer Railways through DDs by the ""due date"", as was mentioned in the bills.
Liability of the consumer Railways to pay surcharge on delayed payments of the bills in question, in fact, arose from Clauses 23 and 24 of the
Agreement dated 5.6.1987 the relevant parts of which run as under:
Clauses 23-The Board will, as far as possible within the fifteen days after the expiration of each calendar month, deliver to the consumer a bill of
charges stating the number of units supplied to the consumer by the Board in accordance with the readings of the said meters and the amount
payable, therefore, accordingly to the tariff applicable together with other charges payable by the consumer to the Board and the consumer shall
pay the same within 21 days from the date of the bill......."" Clause 24(b)-If the Consumer fails to pay any bill as provided in Clause 23 he shall be
liable to pay a surcharge of two per cent per month from the date of the bill. If the bill is not paid within twenty-one days of the date of the bill, the
Board shall give the consumer seven days notice of intention to discontinue the supply of electrical energy and at the expiry of such period, if full
payment has not been made, may forthwith disconnect the supply until full payment of all dues outstanding and the charges for the work of
disconnection and reconnection has been made.
A combined reading of the above clauses of the agreement between the parties would show that it was with a view to enforce payment of the
monthly bills by the consumer within the specified time of 21 days that penal consequences in the form of levy of surcharge and discontinuance of
supply of electrical energy by the Board were contemplated. The requirement of seven days notice by the Board to the Consumer before
disconnecting the supply of electrical energy to him in the event of his failing to pay the monthly bill of dues outstanding to the Board within the
specified period of 21 days. (Clause 24) in fact takes the rigours of penal consequences relating to the levy of surcharge also. It means that simply
technical and/or bona fide default by the consumer in making payment of the bill within the specified or stipulated period of 21 days should not,
ordinarily, attract the penal consequences of levying surcharge and discontinuing the supply of electrical energy by the Board to the consumer. It is
the well recognised principle of interpretation of penal provisions contained in Statute of Agreement between the parties that such provisions should
be strictly construed and where two views on the interpretation of a provision are possible the one favourable to the subject should be preferred to
the other. Viewed thus also, the efforts made by the Consumer Railway to pay the two bills by the due date, their making payments of the bills
through 11 DDs dated 3.11.1998 to the Board by the due date, and Board''s receiving the payment of such drafts on 9.11.1998 did not attract the
penal provision of Clauses 23 and 24 of the Agreement and, therefore, the levy of ""surcharge for delayed payment"" by the Board was not legally
and factually justified. In this behalf we concur with the findings recorded and conclusions arrived at by the learned District Forum and would
accordingly dismiss Board''s Appeal. Bank of Indore''s Appeal No. 1119 of 2001 :
5. IT was urged by the learned Counsel for the State Bank of Indore, Mandsaur that it seems to have escaped the view of the Forum that there
was no privity of contract between the Consumer Railway (the ''complainant'') and the State Bank of Indore, Mandasur so as to create relationship
of consumer and provider of service between them respectively. The learned Counsel further submitted that whatever relationship might have been
there in the present case, it was between the Railways and the Kota Bank, which had prepared the drafts on their instructions. The Kota Bank, in
the context of the present matter, may, at the most, be considered to be the principal and the answering Bank its agent in the matter of rendering
services to the consumer Railways. The learned Counsel added that although 11 drafts were prepared by the Kota Bank as early as on 3.11.1998
and such demand drafts had been drawn on the appellant-Bank in violation of complainant''s instructions but no ''advice'' was sent by the Kota
Bank to the appellant which it was required to send as per practice adopted in conducting inter banking business by financial institutions as per
relevant rules and regulations. Under such circumstances the return of the demand drafts by the appellant-Bank to Railway''s Bank for want of
''advice'' from the Kota Bank was justified and should not be considered as an act of deficiency in service on its part. We find force in the
arguments advanced by the learned Counsel.
6. IT was evident that the Consumer Railways had hired the service of the Kota Bank for preparation of drafts for payment of the two bills to the
Board. IT appears that earlier the DDs used to be drawn on State Bank of India, Mandsaur and the Consumer Railways had required the Kota
Bank to prepare the demand drafts accordingly. But the Kota Bank had drawn the demand drafts on State Bank of Indore at Mandsaur, which
was their ''Associate Bank'' at Mandsaur and in its turn the State Bank of Indore, Mandsaur was the Associate Bank of State Bank of India at
Mandsaur, which was the banker of the Consumer Railways. Thus all the problems were created by Kota Bank by drawing the draft upon State
Bank of Indore at Mandsaur in violations of the direction of the Consumer Railways. Kota Bank''s letters of regret dated 22.2.1999 and
22.6.1999 unfold the unfortunate story of this avoidable litigation. Moreover, the Kota Bank should have sent the ''advice'' to the Bank of Indore
at Mandsaur, which they did not. IT is really surprising that instead of expressing regret to the Bank of Indore the Kota Bank took the stand that
there ws no contract between the Consumer Railways and the Kota Bank to issue ''advice'' to its Associate Bank.
Anyway letter dated 3.3.1999 by the State Bank of Indore to the Consumer Railways explains all the story and narrates that they themselves had
contacted the Kota Bank in the matter of the 11 demand drafts and after such counselling with them, they had themselves requested Railways
Banker to resubmit the drafts for payment and did make the payment on 9.11.1998.
In view of the above discussion we find no fault with the appellant Bank in the matter of rendering service to the Consumer Railways. The
impugned order in this respect is required to be set aside.
7. IN the result, whereas Board''s Appeal No. 1182/2001 is dismissed with cost on parties. Appeal No. 1119/2001 by the State Bank of INdore
at Mandsaur is allowed with cost on parties. Impugned order as against them is set aside. Ordered accordingly.
