Saji Geevarghese vs Accounts Officer & Ors

SAJI GEEVARGHESE ... APPELLANT

VERSUS

ACCOUNTS OFFICER (Telephone Revenue) & ORS. ...RESPONDENTS

J U D G M E N T

R.V.RAVEENDRAN, J.

Delay condoned. Leave granted. Heard the learned

counsel. This appeal relates to a telephone subscriber's

grievance in regard to excess billing.

2. Appellant received a bill dated 11.7.1995 for

Rs.91,621/- in regard to his telephone (No.239473 of

Pattazhi, Kollam). On 28.7.1995 the appellant lodged a 2

complaint with the first respondent alleging excess

metering and/or misuse in regard to his telephone. He

stated that no action had been taken in spite of his

meeting the concerned Junior Engineer and complaining about

the bill. He requested that the demand for the payment of

the Bill may be kept `pending' till enquiry into his

complaint. (According to the appellant, he had earlier

received another excess bill (dated 11.1.1995) for

Rs.79170/- and he had orally complained about it, but paid

the amount in view of an assurance of the telecom

department to enquire into his complaint). The first

respondent sent a reply dated 8.8.1995 informing him that

the matter was being enquired into and called upon him to

settle the bill, pending such enquiry. When matters stood

thus, the appellant was served another bill dated 11.9.1995

for Rs.581,717/- for 403630 calls. As the amounts of bills

dated 11.7.1995 and 11.9.1995 were not paid, the telephone

was disconnected on 27.9.1995. The respondents also issued

a notice dated 30.11.1995 demanding payment of the arrears

of Rs.677,338/- by 13.12.1995. They also threatened to

permanently close the telephone and recover the amount as

revenue arrears, if the amount was not paid. Though

appellant reiterated his request for action on his

complaint, the department, by letter dated 15.3.1996 merely 3

reiterated the demand for payment. Appellant therefore

approached the High Court for relief. The High Court by

order dated 26.4.1996 disposed of the petition with a

direction to the Telecom department to refer the dispute to

statutory arbitration under section 7B of the Telegraph

Act, 1885.

3. In pursuance of the above, the department appointed

the fourth respondent as Arbitrator on 1.8.1996 and

referred the excess billing dispute in regard to the

following three bills for arbitration:

Date of Bill Number of Calls Bill Amount

(i) 11.01.1995 54300 Rs. 79,170/-

(ii) 11.07.1995 62270 Rs. 91,621/-

(iii) 11.09.1995 403630 Rs.5,81,717/-

The appellant contended before the Arbitrator that the

bills for 1994 would show that the number of calls made

(bimonthly) were only 1580, 2860, 3310 and 13220, as per

bills dated 11.5.1994, 11.7.1994, 11.9.1994 and 11.11.1994.

Even in 1995, that is, for the periods 25.12.1994 to

24.2.1995 and 25.2.1995 to 24.4.1995, the number of calls 4

were only 2800 and 4100 as per bills dated 11.3.1995 and

11.5.1995. He pointed out that the Bill dated 11.1.1995 for

the period 25.10.1994 to 25.12.1994, bill dated 11.7.1995

for the period 25.4.1995 to 25.6.1995 and bill dated

11.9.1995 covering the period upto 25.8.1995 showed an

unbelievably large number of calls as having been made

(54300, 62270 and 403630 respectively). He attributed the

unexplained spurts to some fault in the system (metering

circuit) or some collusive mischief by the telephone staff

in collusion with other users.

4. The telecom department contended before the

Arbitrator that there were no faults or defects in the

system and as the telephone was connected to an electronic

exchange there was no chance of misuse or excess metering.

They alleged that the appellant was a heavy caller and was

probably using the telephone for international calls and

unauthorized FAX facility. They submitted that there was no

error in the bills.

5. The Arbitrator made an award dated 9.1.1997. After

referring to the facts he concluded : "On deep analysis of

the case, I found that there was no proper monitoring of

the calls originated from the petitioner's telephone by 5

Telegraph Authority and I found that the appellant was

eligible for rebate and by extending the benefit of doubt,

I allow 40000 calls in favour of the petitioner, in the

disputed bill dated 11.9.1995 issued for Rs.5,81,717/-... I

do not find any justification to allow any rebate in favour

of the petitioner for the disputed bills dated 11.1.1995

and 11.7.1995." Accordingly, he upheld the three bills for

Rs.79,170/-, Rs.91,621/- and Rs.5,81,717/-, and granted

limited relief to an extent of 40,000 calls in regard to

the bill dated 11.9.1995.

6. The appellant challenged the said award before the

Kerala High Court. A learned Single Judge of the Kerala

High Court by order dated 24.7.2002 dismissed the

appellant's writ petition, being of the view that it was

not possible to disturb the findings recorded by the

Arbitrator who was a quasi judicial authority, in judicial

review under Article 226 of the Constitution of India. The

appellant filed a writ appeal which was also dismissed on

16.6.2005. The Division Bench upheld the award on the

following reasoning:

"The petitioner's telephone was having STD/ISD facility. There is no evidence of misuse of the instrument either by the department staff or by any outsider. Enquiry was also conducted on the basis of the complaint of the petitioner. If the petitioner had 6

got any doubt regarding the system, he could have availed of the dynamic locking facility which he has not availed......"

The said judgment is under challenge in this appeal.

7. Section 7B of the Telegraph Act, 1885 makes the awards

of Arbitrators final and conclusive between parties. The

only remedy available to a subscriber aggrieved by an award

is to seek judicial review by way of a writ petition. The

High Court will not however sit in appeal over the Award,

but will only examine its correctness and legality, within

the limited confines of judicial review. (Vide M.L. Jaggi

vs. Mahanagar Telephone Nigam Ltd - 1996 (3) SCC 119). We

have examined the award keeping in view the aforesaid

principles. The facts disclosed by the telecom department

in the affidavits filed by the department before the High

Court, show that the award of the Arbitrator suffers from

non-application of mind which had led to several apparent,

in fact, glaring errors of fact and law. We may refer to

some of them briefly.

8. The award of the Arbitrator upholds the bill dated

11.7.1995 for Rs.91,671/- relating to the period 26.4.1995

to 25.6.1995 and directs the subscriber to pay the said 7

amount. The affidavits the department clearly shows that

the bill dated 11.9.1995 for 403630 calls, is a

consolidated bill for the period 25.12.1994 to 25.8.1995

and it includes the amount due for the calls made during

the period covered by the bill dated 11.7.1995 (as also the

period covered by two other bills dated 11.3.1995 and

11.5.1995). In other words, having regard to the bill dated

11.9.1995 for 403630 calls, the earlier bills dated

11.3.1995, 11.5.1995 and 11.7.1995 for 2800, 4100 and 62770

calls got cancelled. As the period covered by the bill

dated 11.7.1995 was covered by the subsequent bill dated

11.9.1995, the Arbitrator ought to have held that bill

dated 11.7.1995 was not payable. But he has mechanically

and without application of mind, upheld the bill dated

11.7.1995 as also the bill dated 11.9.1995 without noticing

that the bill dated 11.7.1995 cannot survive in view of the

bill dated 11.9.1995.

9. The Arbitrator upheld the bills dated 11.7.1995 and

11.9.1995 by accepting the explanation of the telecom

department that completion of several revolutions of the

meter had been missed and that had lead to underbilling in

the bills dated 11.3.1995, 11.5.1995 and 11.7.1995 and that

was rectified in the consolidated bill dated 11.9.1995. 8

According to the department, the meter was a five digit

meter and could record the numbers running from `0' to

`99999'. After reaching `99999', the meter would again

start recording from `0'. By way of illustration, it was

stated that for the period 25.4.1995 to 25.6.1995 covered

by the bill dated 11.7.1995, the opening reading was 82886

and closing reading was 45655. The bill dated 11.7.1995 was

prepared for 62770 units assuming that between the two

reading, the meter had completed an revolution, that is it

had reached 82886 to 99999 and then started from `0' to

45655. But it is alleged that between the two readings it

had completed one more complete revolution, that is the

meter ran from 82886 to 99999, then it ran one full round

from `0' to `99999', and then again started from `0' to

45655. According to the department the number of called

meter was therefore 162,769 units and not 62,770 units. For

this purpose, the department has relied on the fortnightly

meter reading record.

10. But the missing of one revolution cannot offer any

explanation as to why the Bill dated 11.3.1995 was only for

2800 units and the Bill dated 11.5.1995 was only for 4100

units. The Bill dated 11.3.1995 covered the period

25.12.1994 to 25.2.1995. For this period, the opening 9

reading was 75985 and the closing reading was 65508. There

is no way the completion of revolution could have been

ignored and the number of units was (99999-75985)+(65508)=

89523. There is no way the number of units could be shown

as only 2800 for the period 25.12.1994 to 25.2.1995. But

the bill was only for 2800 units. This remains unexplained.

The Bill dated 11.5.1995 covered the period 25.2.1995 to

25.4.1995. The opening reading was 65508 and the closing

reading was 82886. It is stated by the department that

during the billing period one revolution was completed and

therefore, the number of units was (99999-65508) + (82886)

= 117378. Even if the completion of the revolution was

missed, the Bill for the period should have been for 17378

units (that is 82886-65509). But the bill for 11.5.1995 is

only for 4100 units. This is also not explained. Therefore,

it is clear that missing or overlooking the completions of

revolutions could not the real reason for the alleged

underbilling for the periods covered by the bills 11.3.1995

and 11.5.1995. This becomes relevant because the Arbitrator

did not find any irregularity in the bills for the periods

covered by the Bills dated 11.3.1995 and 11.5.1995 which

were for 2800 units and 4100 units. But the department

ultimately charged the subscriber for 89523 calls (as

against 2800 calls shown in the Bill dated 11.3.1995) and 10

for 117378 calls (as against 4100 calls shown in the Bill

dated 11.5.1995) for the said periods under the Bill dated

11.9.1995.

11. The Arbitrator having recorded a finding that there

was a lack of monitoring by the department in respect of

calls originating from Appellant's telephone, has failed to

consider its serious consequences on the subscriber, with

reference to the facts of the case. He has routinely given

a 10% rebate by directing a rebate of 40000 calls in the

bill dated 11.9.1995 on account of "benefit of doubt". This

is arbitrary. He ought to have considered the question as

to what should be the relief when the errors in billing

were due to lack of monitoring and inspection of the

department and the department claimed there was a huge

underbilling for a back-period and sought to rectify such

underbilling.

12. The Department's guidelines give an indication as to

the consequences of lack of monitoring and inspection

whenever there were unexplained spurts. They also lays

down the procedure when spurts in calls are noticed. On

10.4.2008, this Court directed the department to produce

the departmental guidelines for disposing of excess billing 11

complaints. Initially the respondent produced the current

guidelines dated 19.10.2005 along with an affidavit. By

subsequent order dated 3.9.2008, this Court directed the

respondents to produce the guidelines in force during the

disputed billing period (1994-95). In response to it, the

department has produced the circular dated 9.4.1986 as the

relevant guidelines applicable, along with its affidavit

dated 23.9.2008. We extract the relevant provisions from

the said circular:

"4.Avoiding excess billing complaints

4.1) In general, excess billing complaints arise from telephones having STD facility. They arise because of:

(a) the subscriber, his family, friends and employees having used STD and not being conscious of the extent to which they have used it, or

(b) a fault in the metering circuit, or some transient fault in the system; and

(c) possible deliberate mischief by other subscribers in league with our staff.

xxxxxxxxx

4.3) We have to be vigilant about 4.1(b) and ensure that as far as possible, metering circuits are tested and kept in proper order.

4.4) In regard to 4.1(c) we must ensure that all possible points at which such mischief can take place are suitably guarded. D.Ps must be looked, access to unauthorised persons to sensitive areas in the Exchange should be avoided and in case of any suspicion about a particular member of the staff, suitable action must be taken.

5. Advance action in case of a possibility of an excess billing complaint.

5.1) Detailed instructions have been issued separately in regard to watching the meter readings of various 12

subscribers and action to be taken on them.

5.2 These broadly consist of

(a) Meter readings being taken every fortnight;

(b) Identifying all subscribers whose current fortnightly readings show a sudden spurt; and

(c) In case of such sudden spurts being noticed, placing the telephone line on observation and deputing responsible staff to the subscriber's premises to check up that there has been no special occasion which might have given rise to such spurts.

5.3) In order to establish the Department's credibility and to satisfactorily investigate complaints about excess billing it is necessary that these steps are taken conscientiously. It appears that in many stations, while meter readings are being taken regularly every fortnight, the difference is not being struck and all cases of spurts are not being brought out.

5.4) In all cases, the meter readings registers must provide for the difference being noted. Somebody should be held personally responsible to identify and report all cases of spurts to the officer-in-charge. Failure in this regard must be taken notice of. If an excess billing complaint reveals a spurt, which had not been reported, suitable educational and disciplinary notice should be taken of the concerned staff.

5.5) As far as possible all telephone lines showing a sudden spurt should be put on observation. For this purpose immediate steps must be taken to provide suitable observation equipment in all exchanges having STD facilities, so that once a spurt is noted, the line is actually put on observation.

xxx xxx"

6. Investigation of an excess billing complaint

.. .. .. ..

6.5 In this connection, it has been decided that no field investigation is called for to determine whether there was any occasion for a special spurt after a complaint has been received. This should have been made, if justified, immediately after the spurt was 13

noticed in the fortnightly readings. It has been noticed that no useful purpose is served by undertaking such investigations after an excess billing complaint has been received.

Guidelines for decisions and conveying the same 7.1 In all cases in which the investigations reveal that

(a) there has been significant spurt in a particular period;

(b) in case of a spurt, there had been some special occasion which might have given rise to a genuine spurt; and

(c) the observations indicate genuine STD calls having been made from the subscriber's number no rebate may be granted and the complaint may be suitably informed with due courtesy explaining briefly the investigations carried out and the results thereof.

7.2 On the other hand, if it is found that there had been, in fact, a spurt for reasons unknown or there is a reasonable doubt as to the possible faults on the metering circuit or the subscribers' equipment or a reasonable doubt exists about the possibility of some mischief, the competent officer may grant suitable rebate."

12. What becomes apparent from the guidelines, is the

obligation on the part of the department to record the

meter reading fortnightly and if there is a sudden spurt,

place the telephone line under observation and depute

responsible staff to check whether there was any special

reason giving rise to the spurts. The reason is apparent.

Only contemporaneous investigation and checking can

disclose the real reason for the spurt. Any amount of 14

subsequent monitoring may not be of any use to identify the

real cause for the spurt (unless the cause is faulty

meter/system and that fault had continued).

13. In this case the stand of the department is that meter

is capable of recording a maximum of 99999 units, and after

completing one revolution of 99999 units, the meter will

again start from the reading `0' (zero); that the meter had

completed one revolution each during the periods 10.1.1995

to 25.1.1995, 10.3.1995 to 25.3.1995, 25.4.1995 to

10.5.1995 and 25.5.1995 to 10.6.1995; that the completion

of such revolutions in January, March, April-May and May-

June of 1995 was not noticed nor recorded by the department

and consequently they had sent bills showing lesser number

of calls than the actual numbers. The department claims

that after receiving the complaint dated 28.7.1995 from the

appellant, it inspected the installation and also verified

the meter readings and discovered that the completion of

four revolutions in January, March, April-May and May-June,

1995, had been missed while billing; and that therefore, it

prepared a consolidated bill dated 11.9.1995 for the period

25.12.1994 to 25.8.1995 (covering the four bimonthly

periods of bills dated 11.3.1995, 11.5.1995, 11.7.1995 and

11.9.1995), setting right the omissions and errors. It is 15

thus clear that during the billing period for the bill

dated 11.9.1995 (25.6.1995 to 25.8.1995), the appellant did

not make 403630 calls, but had made only 33960 calls. The

actual position according to the department is as follows

(extracted from the affidavit dated 10.8.1999 filed in the

High Court) :

Bill date Period Units consumed Units consumed as per bills after taking note served on the of completion of subscriber revolutions

11.3.1995 25.12.1994 to 2800 89523 25.2.1995 11.5.1995 25.2.1995 to 4100 117378 25.4.1995 11.7.1995 25.4.1995 to 62700 162769 25.6.1995 11.9.1995 25.6.1995 to - 33960 25.8.1995

What emerges is this : When excess billing was noticed by

the Subscriber in the Bill dated 11.1.1995 (for the period

25.10.1994 to 25.12.1994) he complained to the Junior

Engineer concerned, but paid the bill. He did not complain

when received the bills dated 11.3.1995 and 11.5.1995, as

they were showing normal number of calls. He again

complained when there was excess billing in the bill dated

11.7.1995 (for the period 25.4.1995 to 25.6.1995). Only

thereafter the department inspected the system and

verification of recording. On such verification, it claims 16

to have found not excess billing, but underbilling during

the period covered by the period 25.12.1994 to 25.2.1995,

25.2.1995 to 25.4.1995 and 25.4.1995 to 25.6.1995 covered

by the bills dated 11.3.1995, 11.5.1995 and 11.7.1995 and

consequently sent a revised consolidated bill dated

11.9.1995, by rectifying the alleged underbilling.

14. The significant adverse consequence is that the

appellant was denied the opportunity of complaining about

excess billing in regard to the period January to June,

1995. As noticed above, the department alleges that in view

of omissions noticed in the earlier bills, it sent a

revised consolidated bill dated 11.9.1995 for 403630 units

for the period 25.12.1994 to 25.8.1995. If the correct

number of calls had been recorded and reflected in the

respective bills relating to Dec-Feb, Feb-April, and April-

June 1995, the Appellant would not have been denied the

valuable right of objecting to the excessive billing as and

when the bills were presented. If the spurts had been

noticed and recorded in time, as it ought to have been

done, the verification/inspection/ monitoring mechanism

could and would have been activated and the real reason for

the spurts would have been identified. On account of the

failure to record the meter reading properly in time, the 17

opportunity to monitor, inspect and identify which of the

three reasons mentioned in clause 4.1 of the guidelines,

resulted in the spurt, was irretrievably lost. The

subscriber also lost the valuable right to complaining

against excessive billing and setting in motion appropriate

inspection, verification and corrections procedures. By

reason of the omissions and negligence by the officers of

the department, the appellant has been burdened with a bill

for 403630 units for 8 months (25.12.1994 to 25.8.1995) as

against the normal average bimonthly billing of about 10000

to 15000 calls or 40000 to 60000 calls for the said eight

months. According to the department, it merely corrected

the errors resulting from the omissions/negligence on the

part of its officers. But such correction has resulted not

in restoration of normal billing from a position of

underbilling, but in an extra-ordinarily excessive billing

against the subscriber denying him the legitimate

entitlement of objecting to it in time and getting it

corrected.

15. The difference in consequences where retrospective

correction results in regularisation or normalisation of

the bills, and where retrospective correction leads to

excessive billing is significant. We will try to 18

demonstrate the significance by an illustration. Let us

assume that the average bimonthly billing of a subscriber

was around 5000 units during 1993 and 1994; that due to

departmental omission or negligence, there was underbilling

during 1995 leading to bimonthly billings for about 1000

units only; and that subsequently the errors/omissions were

noticed and corrected and the bimonthly bills were sent for

about 5000 units. In such an event, the consumer obviously

cannot have a grievance, as the bills were being brought to

regular billing quantities. But let us take another

situation. Let us assume the average bimonthly billing was

around 5000 units in 1993 and 1994; that even during 1995

also, bimonthly bills were sent for around 5000 units; and

that in 1996 the department alleges that there was

underbilling in 1995 and sent bimonthly bills each for say

100000 units. Then how does the subscriber defend himself

against the claim? How can he set the verification and

correction mechanism in motion to establish that the calls

to an extent of 100,000 units were not made? The answer is

that he cannot. Obviously the department cannot put a

subscriber in a position where he cannot verify or seek

verification of revised claims relating to back-periods.

16. If the completion of revolutions had been noticed and 19

if the bills for such high number of calls had been sent in

time, the appellant would have had an opportunity to

complain against the excess billing and consequently the

department would have been in a position to monitor the

system and ensure that the defects were rectified. In

addition it would have also been possible to verify as to

whether there was any misuse or deliberate mischief by the

staff and/or other subscribers, or whether the excess use

was actually by the subscriber himself. This very valuable

right was denied to the subscriber on account of the

failure of the department to notice the several alleged

completion of revolutions resulting in steep spurts. In

fact the guidelines clearly state that if there was a spurt

even in one fortnight reading, action should be taken. In

this case spurts continued for about 16 fortnights, but

remained unnoticed by the department. Consequences of such

defaults and negligence by the department cannot be visited

upon the subscriber by way of increased claims for back-

periods.

17. We hasten to add that the correction of errors in the

bills or additions of the omitted quantities is not by

itself illegal. If the corrections made on noticing the

omissions, when incorporated, results in raising a less 20

than average bill to around the normal billing, it may not

be open to question. Where the department has clear and

acceptable evidence in support of omissions or underbilling

which is capable of verification, it may be possible to

revise the back-period bills. But where the belated

correction of the alleged omissions leads to a huge

increase in the normal billing and where there is no

acceptable evidence supporting such increased claim, then

the subscriber having been denied the opportunity to

protest or object to the increased claim and secure

monitoring of the installation or inspection of the system,

cannot be burdened with a revised increased billing.

18. Coming back to this case, we are conscious that the

High Court was not sitting in appeal over the award of the

Arbitrator, and the learned Single Judge and Division Bench

of the High Court have upheld the award. But the Arbitrator

clearly recorded a finding that there was no monitoring by

the department in spite of spurts and that had led to

defective billing. But he gave only a marginal rebate of

10% without any logical reason for such a small rebate. He

also directed double payments. He also ignored the

admissions by the department. He upheld a retrospective

revision resulting in a huge claim. These visible errors on 21

the face of the award, which ought to have shocked the

judicial conscience have been totally ignored by the

learned Single Judge and by the Division Bench of the High

Court, by a wrong application of the principle that courts

will not sit in judgment over Arbitral Awards. The award of

the Arbitrator is therefore liable to be set aside.

19. We are of the view that no useful purpose would be

served at this distance of time by remitting the matter to

the Arbitrator. To put an end to the litigation and to do

complete justice, we propose to modify the Bills. As

noticed above the faulty billing was on account of the

negligence of the department; and as a result of such

negligence, the valuable right of the subscriber to object

to the increase and secure monitoring/inspection has been

taken away. Therefore, justice can be done in such a

situation only by restricting the billing to the average of

the bills for one year prior to the disputed period. As we

find that there is no proper billing for two months, during

the previous year, we propose to take the average of last

five bimonthly bills before the disputed period. This shows

the average bimonthly use to 15054, rounded off to 15,000.

20. We therefore allow this appeal, set aside the orders 22

of the High Court and the Award of the Arbitrator and

direct as follows :

(i) As the bill dated 11.1.1995 for Rs.79,170/- (for the

period 25.10.1994 to 25.12.1994) has been paid without any

protest in writing, and the written complaint was only six

months later, the appellant cannot avoid liability, even if

there might have been some steep spurts during that period.

(ii) In regard to the period 25.12.1994 to 25.8.1995

covered by the consolidated bill dated 11.9.1995, the

chargeable units are restricted to 60000 (sixty thousand)

in place of the bills dated 11.3.1995, 11.5.1995, 11.7.1995

and 11.9.995.

(iii)The department is directed to send a revised bill

relating to the said period (25.12.1994 to 25.8.1995) by

cancelling the bills dated 11.3.1995, 11.5.1995, 11.7.1995

and 11.9.1995 already sent.

(iv) Respondents shall pay Rs.5000/- as costs to the

appellant.

.................................J. (R.V. RAVEENDRAN) 23

.....................................J. (LOKESHWAR SINGH PANTA) NEW DELHI, SEPTEMBER 30, 2008.