THE NEGOMBO MUNICIPAL COUNCIL, Appellant, and K. M. J. FERNANDO, Respondent

096-NLR-NLR-V-63-THE-NEGOMBO-MUNICIPAL-COUNCIL-Appellant-and-K.-M.-J.-FERNANDO-Respondent.pdf


512 H. N. G. FERNANDO, J.—Negombo Municipal Council v. Fernando
1961 Present: H. N. G. Fernando, J., and L. B. de Silva, J.'XH.E NEGOMBO MUNICIPAL COUNCIL, Appellant, andKL. M. J. FERNANDO, Respondent
S. C. 48—D. G. Negombo, 18709
Electricity—Contract between a local authority and a consumer, for supply of electricenergy—Scope of right of licensee to discontinue supply—Incapacity of licenseeto impose conditions not authorised by statute—Electricity Act, No. 19 of 1950,8S. 30, 32, 33, 36, 45, 46, 47, 49, 60, 64 (I)—Municipal Councils Ordinance,No. 23 of 1947.
A local authority, when it enters into a contract for the supply of electricenergy, is precluded, from imposing on the consumer conditions or terms whichare not authorised expressly by the provisions of the Electricity Act, No. 19 of1950, or by regulations framed in accordance with the provisions of section 46 ofthat Act. The local authority is not entitled to rely upon such unauthorisedconditions in order to justify any discontinuance of supply of electric energy incontravention of section 33, even though the consumer has agreed to be bound bythem.
Conditions providing (1) for discontinuance of supply of energy if the consumerobstructs the licensee from connecting other consumers to the service main, and(2) for the licensee’s exemption from liability in case of discontinuance of supply,are unauthorised conditions unless they are provided for in regulations madeunder section 46 of the Electricity Act.
A regulation made under section 60 of the Electricitj Act cannot validlyauthorise any action inconsistent with the express provisions in the Act itself.But even conceding that such inconsistency can be authorised by a regulationmade under section 60, Regulation 7 under head (vi) of the set of regulationsframed under section 60 and published in the Gazette of the 10th April, 1953, doesnot contain any indication of an intention to alter or evade section 46.
A consumer is entitled to claim from a licensee damages resulting from anunauthorised discontinuance of supply of electric energy.
/^PPEALi from a judgment of the District Court, Negombo.
H. W. Jayewardene, Q.C., with A. K. Premadasa, N. R. M. Daluwatteand JD. S. Wijewardene, for defendant-appellant.
W.T. P. GoonetiUehe, for plaintiff-respondent.
Cur. adv. trull.
September 8, 1961. H. N. G. Fernando, J.—
The plaintiff in this case applied in October 1953 for a supply of electricityto his premises and undertook in his application to abide by the conditionsrelating to the supply which were set out in the application form pro-vided for the purpose by the Negombo Municipal Council. The formincluded inter alia the following conditions :
“ 7 (a) The department reserves the right to connect more than oneconsumer to a service main wherever the supply to the original appli-cant is not affected thereby. Where it becomes necessary to make aconnection to an existing service cable in a private compound the
H. N. G. FERNANDO, J.—Negombo Municipal Council v. Fernando
613
Council undertakes to reinstate the ground in a proper and satisfactorymanner. If a consumer objects to, prevents or obstructs in any way thedepartment from connecting other consumers to the service main, suchconsumer «ha-11 render himself liable to discontinuance of supplywithout notice
“ 7 (d) Every endeavour will be made to ensure an efficient andcontinuous supply of energy to consumers but the council will not beresponsible for any interruption of supply. The council shall not beheld liable to any person for any loss or damage occasioned, directlyor indirectly, by the total or partial interruption of supply, or by thecouncil’s failure to supply or discontinuance of supply
A supply of electricity was accordingly provided to the house occupiedby the plaintiff.
In his plaint filed in July 1956 the plaintiff alleged that on 9th June1956 the defendant council had unlawfully discontinued the supply ofelectricity to the plaintiff’s premises. On this ground the plaintiff askedin his prayer for damages in Rs. 6,000 alleged to have been suffered by wayof inconvenience, humiliation and loss of reputation and also for damagesfor Rs. 50 per day for the deprivation of the use of electric lights and electricappliances. The damages actually claimed under the second head werealleged to have been incurred in the purchase of private electrical plantbut the learned Judge held that this purchase had not been proved.However after inspection of the premises the learned Judge determinedthat the provision of alternative lighting for the plaintiff’s house mustreasonably have cost about Rs. 10 per day and damages of Rs. 510 weredecreed against the defendant council on this basis.
It is common ground that the supply of electricity to the plaintiff’spremises was discontinued on 9th June 1956 but the circumstances inwhich the disconnection was made were hotly disputed at the trial.According to the plaintiff, the council’s electrical foreman came to thehouse at about 1.30 p.m. with some workmen and informed the plaintiffthat it was proposed to take a connection from the plaintiff’s premisesby means of a wire along the rafters of his house to the adjoining premisesthe occupant of which had applied for a supply of energy. This the plain-tiff refused to permit, according to him for the reason that it would bedangerous to effect such a connection particularly because of the risk tohis young children. Later, he alleged, the electrical superintendent alsocame and asked the workmen to keep a ladder by the wall of his houseand this also the plaintiff refused to permit.
The position taken up for the council was that it had been decided togive a connection to the neighbouring house from the plaintiff’s premisesby taking a line over the roof of the plaintiff’s house. The council’s officerstestified that the plaintiff refused to permit this to be done when theworkmen wished to effect the connection on the morning of the 9th ofJune. The electrical foreman came later but was asked not to step into
614 H. N. G. FERNANDO, J.—Negombo Municipal Council v. Fernando
the plaintiff’s premises. Thereafter the superintendent and the engineeralso came and at that stage found about five or six persons on the premisesarmed with clubs. They explained to the plaintiff that what they pro-posed was only to take a wire over the plaintiff’s roof but the plaintiffrefused to permit any connection to be taken over his roof.
After exhaustive consideration of the relevant evidence the learnedDistrict Judge had found that what the defendant’s officers intended todo was to run a wire along the beam of the plaintiff’s house in order togive the connection to the neighbouring premises. I can see no reasonfor doubting the correctness of the finding actually reached that this wasindeed the course which the defendant’s officers proposed in the firstinstance at any rate. Counsel for the defendant has argued for the pur-poses of the appeal that the evidence established that on the last visit madeby the council’s officers they did inform the plaintiff that they proposedonly to take a line over the roof. Although there is no precise finding asto whether or not this proposal was conveyed to the plaintiff on the occasionof the last visit, I feel sure, having regard to the reasons which moved thelearned trial Judge to disbelieve the foreman as to the purpose he had inmind originally, that the Judge would not have found that on the occa-sion of the last visit of the defendant’s officers they did in fact intend onlyto take a line over the plaintiff’s roof. The defendant while admittingthat an estimate had been prepared for the work involved, did not producethe estimate and did not call the officer who had prepared it. Further-more the learned Judge went so far, and for reasons which appear quitejustifiable, as to decide that some officer of the council had made analteration upon a minute from the Commissioner of Local Governmentwith the object of supporting the defendant’s position that the intentionhad been only to take a line over the plaintiff’s roof. Having regard tothe very strong findings of fact which were actually reached by the Judge,it is unreasonable to suppose that he could have held that on the occasionof the last visit of the council’s officers they changed their mind and haddecided to give in to the plaintiff’s objection to a line being taken alongthe beams of his house.
For present purposes therefore I must assume that the action which theplaintiff prevented the council’s officers from taking was only the action oftaking a line along the beam of his house. Having regard then to theprovisions of paragraph 7 (a) of the agreement the simple question whicharises is whether that paragraph does in fact confer power not merelyto connect a new consumer to the service main provided for the plaintiff’ssupply but confers further power to effect the connection by affixing wiresand other necessary equipment upon the physical premises occupied by theplaintiff. To my mind the paragraph falls short of including such apower to interfere with or damage in any way the property occupied by theplaintiff. But for reasons which "will presently appear, the questionwhether such powers of incidental interference are contained inparagraph 7-does not in fact arise for our decision.
TT N. G. FERNANDO, J.—Negombo Municipal Council v. Fernando 515
On the assumption however that such incidental interference is notjustified by paragraph 7 (a), counsel for the defendant has argued thatparagraph 7 (d) confers an immunity from liability from any lossor damage occasioned by a discontinuance of supply, whether or not thediscontinuance be lawful and authorised by the contract. Consideringthat any discontinuance authorised by the contract would not renderthe council liable in damages, it is difficult to resist the argument that theintention of paragraph 7 (d) was to exclude liability even for unauthoriseddiscontinuance of supply. But again that view does not determine thematter in favour of the defendant council.
The Municipal Council of Negombo is the successor in office of the formerUrban Council and by virtue of relevant provision in the MunicipalCouncils Ordinance, No. 23 of 1947, all by-laws previously made by theNegombo Urban Council and not inconsistent with the Ordinance itselfcontinue in force as by-laws made by the new Municipal Council. TheUrban Council had made the by-laws P (3), by-law (2) of which pro-vides that a person desirous of obtaining energy from the council shouldmake an application in such form as may be provided for the purpose bythe council and it is not disputed that the form of the application signedby the plaintiff which incorporated the conditions which I have mentionedabove was the same form as was previously utilised by the NegomboUrban Council under these by-laws. Having regard therefore to therelevant provisions of the Municipal Councils Ordinance concerning thesupply of electricity by the Negombo Municipal Council it can be assumedfor present purposes that so far as that Ordinance is relevant, the by-lawsand the form utilised by the defendant council and the conditions it con-tains are all within the powers of the council and that accordinglythe plaintiff, when he signed the form of application, bound himself interalia by condition 7 (d) and is therefore disentitled to sue for damages.
Reference has now to be made to a special statute, The Electricity Act,No. 19 of 1950, enacted to “ regulate the generation, transmission, trans-formation, distribution, supply and use of electric energy ”. Under thisAct a local authority is prohibited from supplying electric energy unlessauthorised in that behalf by a licence granted by a Minister. The earlierpart of the Act provided for the conditions and circumstances in whichlicences to supply electricity may be granted and confers on a licenseepowers necessary to enable electricity installations aDd supply equipmentto be established and maintained. Then follow certain sections which arein my opinion of the utmost importance in considering the rights, dutiesand privileges inter se of a local authority which is a licensee and of con-sumers or of prospective consumers within its administrative area. It isnecessary therefore to reproduce these provisions in extenso :
“ 30. The supply of electrical energy by the holder of a licenceshall, in every case, be in accordance with—•
(a) the provisions of this Act and of the regulations made thereunder,
516 H. N. G. FERNANDO, J.—Negombo Municipal Council v. Fernando
such general conditions as may be prescribed under the Actand declared to be applicable to all licences of the class ordescription to which that licence belongs ; and
such special conditions as may be set out in that licence anddeclared to be applicable to that licence.
“ 32. A licensee shall not be compelled to give a supply of energyto any premises unless he is reasonably satisfied that the consumer’slines, fittings and apparatus therein are in good order and condition,and are not likely to affect injuriously the use of energy by otherpersons or the supply thereof by the licensee.
** 33,(1) A licensee shall, upon being required to do so by the
owner or occupier of any premises situated within one hundred andfifty feet from any distributing main of the licensee in which he is forthe time being required to maintain or is maintaining a supply ofenergy for the purposes of general supply to private consumers, giveand continue to give a supply of energy for those premises in accordancewith the provisions of the licence and of the regulations, and he shallfurnish and lay any service lines that may be necessary for the purposeof supplying the maximum power which may be required by suchowner or occupier and may be supplied under the licence.
“ 36. The prices to be charged by a licensee for energy supplied byhim shall not exceed those specified in his licence as appropriate to theseveral methods of charging provided therein :
" 46.(1) A licensee may make regulations to be observed by the
consumers as to—
(а)the conditions of supply ;
(б)the terms and length of contracts required to be entered into ;
and
any other matters relating to the supply to consumers.
(2) No regulation made by a licensee under sub-section (1) shallhave effect until it has received the approval of the Minister or,where the licensee is a local authority, the approval of the Minister ofLocal Government given after consultation with the Minister.
“ 64.(1) A licensee who makes default in supplying energy to
any owner or occupier or premises to whom he is required to supplyenergy by or under the provisions of this Act or of his licence, shall beguilty of an offence punishable save as provided in section 73 witha fine not exceeding twenty-five rupees in respect of each day on- which or on any part of which any such default occurs **.
Tn , addition, section 60 also generally empowers the Minister to makeregulations.
EL N. G. FERNANDO, J.—Negombo Municipal Council v. Fernando
617
We were not referred during the course of the argument to any pro-visions of the earlier law (whether relating to Municipal Councils orUrban Councils or otherwise) bearing any resemblance to that which isnow contained in section 33 of the Electricity Act. Without reproducingagain the language of that section which is framed in the form of theimposition of an obligation on the licensee, that section in my opinionamounts to nothing less than provision which confers upon the occupierof premises in proximity to a distributing main a right to be given asupply of energy in accordance with the provisions of the licence (grantedby the Minister to the local authority) and of the regulations made under theAct. In other words an occupier has a right to point to the provisionsof the licence and to regulations made under the Act and to insist that ifhis case falls within the scope of those provisions the local authoritymust give and continue to give a supply of energy for his premises;and if the authority makes default in doing so the authority is liableto be prosecuted and punished under section 64.
It is important I think to appreciate the far-reaching change whichsection 33 effected in the relationship between the licensee and occupiersof qualified premises within its area. Having conferred the right to asupply by section 33 and having imposed a sanction found in section 64,the Legislature further assumed control of the matter of charges in section36 for the benefit presumbly of consumers. Thereafter in order toprotect the rights of a licensee and the public interest the Legislaturein section 45 provided for discontinuance where a consumer improperlyinterferes with the supply of energy or fails to comply with any regu-lations relating to the conditions of supply. Again in section 47 theLegislature provided necessary powers of inspection with the sanctionof discontinuance where inspection was not permitted and in section 49for discontinuance in the event of the non-payment of charges for asupply. I pass now bo consider section 46 which empowers the licenseeto make regulations to be observed by consumers as to (a) conditionsof supply, and (6) terms and length of contracts required to be enteredinto by consumers. Such regulations do not have effect unless approvedboth by the Minister in charge of the subject of Electrical Undertakingsand the Minister of Local Government.
The construction of section 46 which the plaintiff contends for is thatthe intention of the Legislature was to provide that where a licenseedesires to impose conditions or terms in contracts which are not authorisedby any other section of the Act the licensee must necessarily includesuch conditions in regulations framed under section 46 and approvedbv the two appropriate Ministers. Prima facie, having regard to theprovisions of the Act to which I have already referred disclosingan intention of the Legislature to cover in its enactment as many mattersas possible both in the interests of the consumer and the local authori-ties, there is much to be said in favour of this construction. For instance
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H. N. G. FERNANDO, J.—Negonvbo Municipal Council v. Fernando
while it is obvious that disconnection would be the only proper remedywhere a consumer fails to pay the charges due or improperly interfereswith the electricity supply or injures the licensee’s equipment, thisremedy was not left to be imposed even by regulation. The Legislatureitself provided the remedy. Section 45 also expressly refers to a failureon the part of the consumer to comply unth the regulations relating to theconditions of supply and expressly provides the remedy of discontinuanceof supply in such an event. Considering the nature of the privilegegranted to the consumer by section 33 it would not in my opinion bereasonable to suppose that even in the absence of a section such assection 46, the Legislature would have contemplated that a local autho-rity could impose conditions at its own will and pleasure. But theenactment of section 46 in my opinion places the matter beyond doubt.The Legislature was itself unable to frame before-hand all possible termsand conditions which may be included in a contract and chose insteadthe alternative of permitting the local authority (with the approval ofthe two Ministers) to frame regulations for that purpose.
If this be the proper construction of the Act, then the conditions 7 (a)and 7(d) of the agreement are unauthorised conditions, since they arenot terms or conditions provided for in regulations made under section46 ", in fact no regulations whatever have been made by the councilunder that section. Whether such unauthorised conditions can berelied upon by the council is a question with which I shall have to deallater in this judgment.
The construction which Mr. Jayewardene for the council seeks toplace upon section 46 would give it but little effect. According to hiscontention the section was designed to serve two purposes which I maybriefly summarise as follows :—
because there were contracts between local authorities andconsumers entered into prior to the new Act of 1950, section 46, it iscontended, would enable a local authority to provide for new conditionsbinding consumers, in addition to conditions already contained in suchcontracts ;
even prospectively the section could be utilised to alter by meansof statutory regulations provisions in contracts previously entered into.Although, it is argued, there may be a legal necessity to resort to section46 for the two special purposes mentioned, a local authority may forother purposes impose its own conditions in contracts by virtue ofits rights as a Municipal Council to enter into contracts, and the conditionsin paragraph 7 of the agreement are therefore valid even though notauthorised by section 46.
If such were the only objects which the Legislature had in mind inenacting section 46, it is surprising that no reference is made in thesection to any intention that regulations could be made in order to add
H. N. G. FERNANDO, J.—Negombo Municipal Council v. Femando
519
or subtract from pre-existing contracts. Indeed I myself much doubtwhether, once there has been a contract which is otherwise valid, section46 confers any power to make any regulation detracting fromcontractual rights already enjoyed by the consumer. There is not inthis section, as there is in section 46, any expression of intention to over-ride prior contracts. If this doubt be a proper one, then the argumentfor the council would render section 46 devoid of any meaning.
Even in the agreement in question in the present case there are manyconditions the validity of which is clearly referable to the express provi-sions of the Act, and the authorisation of regulations made under section46 is not in law necessary in order to enable conditions of that kind tobe included in a contract. Indeed, having regard to the matters dealtwith in sections 45, 47, 49 and 50, the Act itself contains more or lessadequate provision for the discontinuance of supply in appropriatecases. Even if condition 7 (a) be a valid condition imposed under section46, the power of discontinuance conferred by section 45 would auto-matically operate. By providing in section 45 a sanction for a failureto comply with regulations relating to the conditions of supply and insection 46 for regulations as to such conditions and to the terms ofcontract, the Legislature has expressly laid down a means by whichany gaps left in its express enactments may be duly filled.
Section 46 contains express provision for a case where a licenseedesires to impose conditions or terms not already authorised by the Actitself but with the safeguard that such regulations require the sanctionof the two Ministers. It is in my opinion quite unreasonable to holdthat nevertheless the Legislature had an intention that if a licenseewishes to impose conditions or terms it can do so without resort to thelegal means provided in that behalf by section 46.
The plain meaning of section 46 is that if a local authority desires toimpose conditions and terms not contemplated in the Act, it may frameregulations incorporating such terms and conditions, but only if thetwo Ministers approve. The question is whether a local authority hasany additional or residuary power to impose conditions. To hold thatit has would lead to absurdity ; for if so, it would either be able to ignorethe two Ministers completely, or else even if the Ministers decline toapprove any proposed conditions, it could nevertheless flout the viewsof the Ministers and proceed to impose its own conditions. Wouldnot such a course be obviously in conflict with section 33 ? Whenthat section declares that a supply must be given and continued to begiven in accordance with the provisions of the regulations, it is surelyunlawful for the authority to say that it will give a supply only inaccordance with conditions it chooses to impose.
It has been argued that, even though section 33 may have contemplatedthat a supply must be given in accordance with regulations, and not inaccordance with conditions determined by a local authority of its own
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TT_ N. Q. FERNANDO, J.—Negombo Municipal Council v. Fernando
motion, the legal position has been altered subsequently. This argu-ment is based on the regulations framed under section 60 of the Actand published in the Gazette of April 10th 1953. Regulation 7 underhead (vi) of this set of regulations provides inter alia that every consumer** shall comply with all the conditions under which electric energy is suppliedby a licensee ”.
Mr. Jayewardene’s contention has been that the expression “ condi-tions under which electric energy is supplied by a licensee ” in thisregulation includes any condition de facto imposed by the licensee,whether or not it is a condition authorised by the Act or by section 46.There might have been some force in this contention if the language ofthe regulation had been that a consumer must comply with “ suchconditions as the licensee may impose ”, But as the regulation stands,the question is whether the regulation confers an implied power on thelicensee to impose conditions, or else merely requires a consumer to complywith the conditions contemplated in the Act. I do not agree that aregulation under section 60 can validly authorise any action inconsistentwith the express provisions in the Act itself (in this context section 46).But even conceding that such inconsistency can be authorised by aregulation made under section 60,. this particular regulation does notcontain any indication of an intention to alter or evade section 46. If,as I have already held, section 33 and section 46 have the effect that asupply must be given in accordance with regulations, the “ conditions ”referred to in the regulation must clearly mean conditions imposed byregulations. A piece of delegated legislation can never be construed ina sense contrary to the express provisions of the statute, unless thelanguage renders such a construction irresistible and unavoidable. Inthis instance, the language can be construed in a sense which is inperfect conformity with the statute, namely that the “ conditions ofsupply ” are the lawful conditions contemplated in the Act.
For the reasons stated, I am satisfied that the defendant council hadno authority under the Electricity Act to insert in the agreement thetwo conditions 7 (a) and 7 (d) on which the council relies for its actionof discontinuing the supply to the plaintiff’s premises. It remains tobe considered whether, though unauthorised by the Act, those condi-tions were nevertheless effective to bind the plaintiff who had agreed tobe bound by them.
But for the licence granted to the council under the Act,- the councilwould have no right to supply electricity, and would indeed be commit-ting an offence in so doing. The fact that a Municipal Council isempowered by the 1947 Ordinance to supply electricity and to enterinto contracts for that purpose is of no avail, since those powers cannotnow be exercised save in conformity with the Electricity Act, which is alater special enactment governing the supply of electricity. The** scheme ” of the Act, as I have held, is that a licensee is bound to supplyelectricity in accordance with conditions laid down by the Legislature
H. N. G. FERNANDO, J.—-Negombo Municipal Council v. Fernando
621
itself or else prescribed by regulations made under the Act; and just asthe mode and conditions of supply are comprehensively controlled bythe Act, so also is the relationship between the licensee and theconsumer similarly controlled.
Tn so far as the council acted in breach of the Act by discontinuingthe plaintiff’s supply without the necessary authority of a conditionlawful under the statute, the council committed an offence under theAct for which it could have been prosecuted and punished. In such aprosecution, conditions 7 (a) and 7 (d) would have provided no defence,for in imposing them the council contravened the provisions of section 33.That being so, it is in my opinion not open to the council to plead theseconditions as a defence in a civil action for damages.
In form, it may appear that the rights of the plaintiff flow from hiscontract; but the contract in this context should be nothing more thanthe reduction into the form of a document of the terms of the relation-ship contemplated by the statute. What the plaintiff complains of isnot merely the breach of the agreement, but rather the breach of theobligation imposed by the Act on the licensee and the breach of the rightconferred by the Act on himself. Indeed, there is no compelling needfor any formal contract between licensee and consumer, howeverconvenient and useful such a document may be. A contract outsidethe terms contemplated by the statute would not bind the council;equally a condition which is unauthorised by the statute does not bindthe consumer.
The correctness of the proposition just stated can I think be mademanifest. Suppose that the council had fixed in the agreement, andthe plaintiff had agreed to pay, some special charges not prescribed byor under the Electricity Act, and had imposed in the agreement a condi-tion for discontinuance on non-payment of such charges. Undoubtedly,the council could not successfully recover such charges in a civil action.How then could the council successfully plead the discontinuance clauseif in the same action the plaintiff had counter-claimed for damages forunlawful discontinuance ? The fact that, in the present case, the con-dition appears to this Court to be perfectly reasonable cannot conferon it legal validity or effect.—the reason being that the Legislature hascommitted to the two Ministers the function of deciding whether such acondition is or is not reasonable and should or should not be made aterm of the contract.
For these reasons I would dismiss the appeal with costs.
L. B. de Silva, J.—I agree.
Appeal dismissed.