W.B.S.E.B. V. FAKIR CHAND RICE MILLS AND ORS INSC 325; 1996 JT 569; 1996 SCALE 67

Name of Case: W.B.S.E.B. V. FAKIR CHAND RICE MILLS AND ORS INSC 325; 1996 JT 569; 1996 SCALE 67

Facts: Appellants asked for a sum of Rs. 28,68,246.06 from the Respondents claiming pilferage in the meter reading of electricity given to them. Respondents initiated a suit based on the demand. The Trial Court directed the Respondents to pay a sum of Rs. 2,60,000 and odd. The decision was upheld in appeal. Dissatisfied, the appellants approached the High Court and were awarded an increased sum of Rs. 5,50,000. Further challenged High Court's order at the Supreme Court through special leave.

Issue: Whether High Court was right in directing the payment of Rs. 5,50,000 without adjudicating any of the substantive matters behind the demand?

Holding: No, the High Court erred in not addressing the issues and merely treating the matter at their own discretion without the proper adjudication necessary.

Rationale: The Supreme Court held that the order by the High Court did not evaluate the merits of the demand made by the appellants for the sum of Rs. 28,68,246.06. SC emphasised that with regard to monetary claims like this, a balance must be maintained. Court held that when the Appellants are obligated to provide electricity to the Respondents, the Respondents are in correspondingly obligated to pay the amount subject to determination of controversy in the suit. Respondents were directed to deposit a sum of Rs. 12,00,000 within a period of 2 months from the order, accounting for the prior order from the HC for Rs. 5,60,000 if applicable. No costs awarded