Holding

The Supreme Court set aside the arbitral award and the High Court orders, finding the award void for non‑application of mind and gross errors, and modified the billing to 60,000 units.

Summary

The appellant, a telephone subscriber, challenged three telephone bills that he alleged were excessive due to meter reading errors. The dispute was referred to statutory arbitration under Section 78 of the Telegraph Act, 1885, where the arbitrator allowed a modest rebate on only one bill and upheld the others. The appellant appealed, arguing that the arbitrator failed to apply his mind, made glaring factual and legal errors, and that the department’s negligence deprived him of the right to contest the excess billing. The Supreme Court held that the award was liable to be set aside because of non‑application of mind and the resulting injustice, and it modified the billing by capping the chargeable units at 60,000 for the disputed period. Consequently, the High Court’s orders and the arbitral award were set aside, and the department was directed to issue a revised bill.

Issues considered

Whether a High Court can disturb an arbitral award made under Section 78 of the Telegraph Act, 1885 in a writ petition under Article 226 of the Constitution.
Whether the arbitral award suffered from non‑application of mind and evident errors of fact and law warranting its setting aside.
Whether the subscriber is entitled to relief from excessive billing when the department failed to monitor meter readings and the award was erroneous.

Legislation cited

Constitution of Indias. 226
Indian Telegraph Act, 1885s. 78

Subjects

excess billingarbitral awardjudicial reviewTelegraph Actnon‑application of mindconsumer protectiontelephone subscriberbilling dispute

Judgment

' \

[2008) 15 S.C.R. 1 ,

.. SAJI. GEEVARGHESE A
, •.
' II.
ACCOUNTS. OFFICER (TELEPHONE' REVENUE). & ORS.
(Civil Appeal No. 5912 of 2008) · · ·

SEPTEMBER.30, 2008 · ·
B
.. · .jR.V.. RAVEENDRAN AND LOKESHWAR SINGH
. .. . . . . PANTA, JJ.) .

Telegraph Act, 1978; s.7B:
..
Excess billing -. Telephone sub~criber making a c
. complaint alleging. excess metering/misuse of his telephone
line but rpade payment Receipt of another bill by subscriber
· also showing excess.- billing - Complaints in writing -
·Department informing the subscriber to settle.the,biil pending
•enquiry-(Yet another bill showing excess billing received by 0
subscriber-· Department raising demand for payment of bills
.- Challenged by subscriber - High Court directing
·Department to refer the dispute to statutory arbitration in terms
ofprovision u/s.7 of the Act;- Arbitrator made an award
allowing rebate in one of the disputed bills dated 11.9.1995 E
: but upheld other bills - Challenge to - Dismissed by Single
·Judge: of. the High Court holding that findings of Arbitrator,. a
quasi-judicial authority, cannot be disturbed by' the High
Court in exercise of power of judicial review under Article 226
: of the Constitution - Affirmed by Division Bench of the· High
-Court- Correctness of,... ·Held: In terms ofs.7B of the Act, F
·award made by tlje Arbitrator is final and conclusive - Only
remedy available to the party aggrieved by the award is to
·seek judicial review by filing a writ petition -Award suffers from
non-applicaticm of mind by the Arbitrator leading to apparent
erroroffacts and law-Bill dated 11.9.1995 is a consolidated G
bt11 covering earlier bills dated 11. 7.1995, 11~5.1995 and
11.3.1995,. which stood cancelled - Arbitrator erred in
· upholdil)g the bill dated 11.7.1995 without noticing that the
same was'
. .
already included in the bill dated 11.9.1995 -
1 H
2 SUPREME COURT REPORTS [2008] 15 S.C.R.

A Arbitrator ought to have considered the question as to what
relief should have been given to the subscriber when errors
in billing due to lack of monitoring and inspection of the
department noticed - Had the spurts in· calls been detected
Jn time, verification/inspection/monitoring mechanism could
B have been activated and real reasons for spurts would have
been known and the subscriber would not have lost his )-
valuable right to complaining against excessive billing -
Though the Arbitrator recorded a finding that there was no
monitoring done by the department in spite of noticing spurts
c which led to defective billing but it gave only a marginal
rebate to subscriber - These visible errors on the face of the
award have totally been ignored by the High Court by wrongly
applying this principle that the Court can not sit over Arbitral
award - In such a situation, justice can be done by restricting
0
the billing in regard to the bills against which written complaint -+
was filed promptly, to the average of the bills for one year prior
to the disputed period - The department. directed to send
revised bill accordingly - Constitu(ion of India, 1950 - Article
226-Arbitrator-Award- Court's power to review.

E Appellant, a telephone subscriber, received a bill
dated 11.1.1995 showing excess billing. He had
complained orally to the department but paid the bill. He
received another bill dated 11.7.1995 also showing
excess billing. He lodged a complaint with respondent
F No.1 alleging excess metering and/or misu~e of the
telephone line. Respondent No.1 informed that the matter
has been enquired into and call~d upon him to settle the
bill. In the meantime, he was served with yet another
excess bill dated 11.9.1995. Appellant did not pay these
G bills and requested for action on his complaint. However,
the respondent issued a notice demanding payment of
arrears. Appellant approached the High Court. The High
Court directed the respondent to settle the dispute by
arbitration. The department appointed an Arbitrator and
H referred the bills in question for arbitration. The Arbitrator
SAJI GEEVARGHESE v. ACCOUNTS OFFICER 3
.( (TELEPHONE REVENUE) & ORS .

found that the appellant was eligible for rebate by giving A
the benefit of doubt in respect of disputed bill dated
11.9.1995 only, but upheld the other two disputed bills.
Aggrieved, the appellant challenged the award. Single
Judge of the High Court held that it was not possible to
disturb the findings recorded by the Arbitrator who was B
a quasi- judicial authority, in judicial review under Article
""('
226 of the Constitution of India. On appeal, Division Bench
of the High Court upheld the award. Hence the present
appeal.

Allowing the appeal, the Court c
HELD: 1.1. Section 78 of the Telegraph Act, 1886
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 D
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. The facts disclosed by the
telecom department in the affidavits filed by the E
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
-1'.
of fact and law. [Para 7] (12-H; 13-A-C]

M.L. Jaggi v, Mahanagar Telephone Nigam Ltd., (1996] F

-
~

~
3 sec 119, relied on.

1.2. The affidavits of 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 G
and it includes the amount due for the calls made during
the period covered by the bill dated 11. 7.1995. 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 H
4 SUPREME COURT REPORTS [2008] 15 S.C.R.

A c.overe~ 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. Sut
he ha~. mechanically and without application of mind,
upheld the blll dated 11. 7.1995 as also the bill dated
8 11.9.1995 without noticing that the bill dated 11.7.1995
cannot survive in view of the bill dated 11.9.1995.
[Para 8) [13-D-G]

1.3. The bill dated 11. 7.1995 was prepared for 62770
C . units assuming that between the two reading, the meter
had completed one revolution, that is it had reached
82886 to 99999 and then started from ·o· to 45655. But it
is alleged that between the· two readings it had completed
~>ne more complete revolution, that is the m~ter ran from
S2S86 to 99999, then it ran ·one full round ·from ·o· to
D ·99999•, and then again started from 'O' to 45655.
According to the department the 'number of calls
recorded in the met~r was. therefore 162, 769 units and
riot 62, 770 UJJits. But the missing of one revolution
cannot offer any explanation· on the part of the
E Department 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
reading was 75985 al)d the closing reading was 6550~.
F There is no way the completion of revolution could have
been ignored and the nu!llber of un'hs 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 bili was only for 2800
G units. This remains unexplained. [Paras 9 and 10] [13-H;
14-A-D; 15-A-C] '>- '
~
1.4. The Bill. dated 11.5.1995 covered the period
25.2.1995 to 25.4.1995. The opening readi,ng was 65508
and the closing reading was 82886. It is stated by the
H
SAJI GEEVARGHESE v. ACCOUNTS OFFICER 5
(TELEPHONE REVENUE) & ORS.

department that during the billing period one revolution A
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· B
not explained. Therefore, it is clear that missing or
-·(
overlooking the completions of revolutions could not be
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 c· ·
irregularity in the bills for the periods covered by the Bills
dated 11.3.1995 and 11.5.1995~
. .
..
[Para 10] [14-G, H; 15-A, B]
~ .,

1.5. The Arbitra'tor having recorded a finding tha,t there
was a lack of monitoring by the department in respect of
calls originating from Appellant's telephone, has failed to D
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 E
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 ~ectify such underbilling.
[Para 11) [15-0, E] F

2.1. The Department's guidelines for disposing of
excess billing complaints give an indication as to the
consequences of lack of monitoring and inspection
whenever there were unexplained spurts. They also lays G
down the procedure when spurts in calls are noticed.
[Para 12l [15-F]

2.2. 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, H
·6 SUPREME COURT REPORTS · · [2008] 15 S.C.R.

A 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 th~ real reason for the spurt. Any amount of
B subsequ~nt monitoring may not be of any use to identify
the real "-use for the spurt unless the cause is faulty ·y
.\ meter/s.yslem and that fault had continued. [Para 12A]
[18•G, H; 19-A, Bl

2.3. In the instant case, the stand of the department
C 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 'O' (zero); that
the meter had completed one rev~lution each during the
~riods 10.1.1995 to 25.1.1995; 10.3.1995 to 25.3.1995;
D 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 neither noticed nor
recorded by the department and consequently they had
sent bills showing lesser number of calls than the actual
E 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
F been missed while billing; and that therefore, it prepared
f
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
G thus clear that during the billing period for the bill dated
11.9.1995 (2~.6.1995 to 25.8.1995), the appellant did not
make 403630 calls, but had made only 33960 calls. [Para
13] [19-B, C, D, E, F]
· 2.4. When excess billing was noticed by the
H Subscriber in the Bill dated 11.1.1995 he complained to
SAJI GEEVARGHESE v. ACCOUNTS OFFICER 7
(TELEPHONE REVENUE) & ORS.

the Junior Engineer concerned, but paid the bill. He did A
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. Only thereafter the department
inspected the system and initiated verification of a
recording. On such verification, it claims to have found
no excess billing, but underbilling during the period
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. C
[Para 13] [20-D, E, F]

2.5. 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 D
bimonthly billing of about 10000 to 15000 calls or 40000
to 60000 calls for the said eight months. [Para 14] [21-D]

2.6. The difference in consequences where
retrospective correction results in regularization or E
normalisation of the bills, and where retrospective
correction leads to excessive billing is significant. [Para
15] [21-F]
2.7. If the completion of revolutions had been noticed
and if the bills for such high number of calls had been F
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 G
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 H
8 SUPREME COURT REPORTS . [2008] 15 S.C.R

A alleged completion of revolutions· resulting in steep
spurts. In fact the guidelines clearly state that if there was
a spurt even in one fortnigh! reading, ·action should be
taken. In this· case spurts conti.nued for about 16
fortnights, but remained urmotice_d, by the department.
. B ·. Consequences of such defaults -~nd negligence by the
· d~partment cannotbe. visited uporfthe subscriber by way
· of increased claims for back-periods. [Para· 16) [22-D, E,
F,G] . ::, · '"' ·
2.8. Where the department has· clear and acceptable
C evidence in support of omission!:' 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
o 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 inspectio'n of the system, cannot be
burdened with a revised increased billing. [Para 17) [23-A,
E B, CJ
3.1. In the instant case, the Arbitrator clearly recorded
a finding that there was no monitorfng by the department
inspite ·of spurts.and that had led to defective billing.'But
he gave only.a marginal rebate of.10% without any logical
F 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 the face of the ."
award, which ought to have s'hocked the judicial
G conscience have been totally ignored by the 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. [~ara·1a1 [23-D, E, F]
H 3.2.
..
To put an encltcj·th~ litigation'
. . : .
and ·to do complete
·· ... '.'
.. ,
SAJI GEEVARGHESE v. ACCOUNTS OFFICER 9
(TELEPHONE REVENUE) & ORS.

justice, this Court propose to modify the Bills. The faulty A
billing was pn account of the negligence of the
department; ahd 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 B
by restricting the billing to the average of the bills for one
'f year prior to the disputed period. There is no proper
billing for two months, during the previous year, it is
proposed to take the average of last five bimonthly bills
before the disputed period. This shows the average C.
bimonthly use to 15054, rounded off to 15, 000.
Accordingly, the orders of the High Court and the Award
of the Arbitrator are set aside and directed as follows :

(a) As the bill dated 11.1.1995 for Rs,79, 170/- has
been paid without any protest in writing, and the written D
complaint was filed only six months later, the appellant
cannot avoid liability, even if there might have been some
steep spurts during that period; and

(b) In regard to the period 25.12.1994 to 25.8.1995 E
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. The department is directed to send a revised
bill relating to the said period to the subscriber. [Paras 19
F
and 20] [23-G, H; 24-A, B, C, D, E, F]
Case Law Reference :
[19961 3 sec 119 relied on Para 7
CIVIL APPELLATE JURISDICTION : Civil Appeal No. G
. _, 5912 of 2008.

From the final Judgment and Order dated 16.6.2005 of the
· High Court of Kerala at Ernakulam in W.A. No. 767 of 2005.
,_,'
Dr. M.P. Raju, Abraham M. Pattiyani, Manju A. Pattiyani, H
I
10 SUPREME COURT REPORTS [2008] 15 S.C,R.

A Jose Abraham, Suma Jose and Ashwani Bhardwaj for the
Appellant.

K.C. Kaushik, Rahul Kaushik, Shilpi Kaushik, Ashok Kumar
Singh and P.V. Dinesh for the Respondents.
B The Judgment of the Court was delivered by
y
R.V. RAVEENDRAN, J. 1. Delay condoned. Leave
granted. Heard the learned counsel. This appeal relates to a
telephone subscriber's grievance in regard to excess billing.
c 2. Appellant received a bill dated 11.7.1995 for Rs.91,621/
- in regard to his telephone (No.239473 of Pattazhi, Kellam).
On 28. 7.1995 the appellant lodged a 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
D 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/-
E 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 >-· )
F stood thus, the appellant was served another bill dated
11.9.1995 forRs.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
G 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 reiterated the l \•

H demand for payment. Appellant therefore approached the High
I'
SAJI GEEVARGHESE v. ACCOUNTS OFFICER 11
(TELEPHONE REVENUE) & ORS. [RV. RAVEENDRAN, .J.]

Court for relief. The High Court by order dated 26.4.1996 A
disposed of the petition with a direction to the Telecom
department to refer the dispute to statutory arbitration under
section 78 of the Telegraph Act, 1885.

3. In pursuance of the above, the department appointed
8
the fourth respondent as Arbitrator on 1.8.1996 and referred
the excess billing dispute in regard to the following thr.ee bills
for arbitration:

Date of Bill Number of Calls Bill Amount
c
(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/-
D
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 E
25.2.1995 to 24.4.1995, the number of calls 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 F
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.
G
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 H
12 SUPREME COURT REPORTS [2008] 15 S.C.R.

A using the telephone for international calls and unauthorized FM
facility. They submitted that there was no error in the bills.

5~ The Arbitrator made an award dated 9.1.199,7. After
referring to ttieJacfa he concluded : "On deep analysis of the
case,· 1 found that there was no proper monitoring of the calls
8
. origi~.ated fio'm the petitioner's telephone by 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 disp!Jted bill dated 11.9.1995 \:----
issued for Rs.5,81,717/-... I do riot find any justification to allow
C any rebate in favour of the petitioner for the disputed bills dated
11.1.1995 and 1t 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.
b "" ·1,.
'
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
E 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:
F · "The petitioner's telephone was having STD/ISO facility.
\......-.-
There is no evidence of misuse of the instrument either by
the department staff or by any outsider. Enquiry was also '
b~::
~1y-,
"

G
conducted on the basis of the complaint of the petitioner.
If the petitioner had got any doubt regarding the system,
he could h~ve availed of the dynamic locking facility which
,,. '

t- ! ;.
he has not availed ...... "
(
l '
The said judgmentis under challenge in this appeal. .I'

7. Section 78 of the Telegraph Act, 1885 makes the 1(
H

..
14 SUPREME_ COURT REPORTS [2008] 15 S.C.R.

A dated 11.3.1995, 11.5.1995 and 11.7.1995 and that was
rectified in the consolidated bill dated 11.9.1995. According to
the department, the meter was a five digit meter and could
record the numbers running from 'O' to '99999'. After reaching
· '99999', the meter would again start recording from 'O'. By way
B 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 'r
dated 11. 7 .1995 was prepared for 62770 units assuming that
between the two reading, the meter had completed an
c revolution, that is it had reached 82886 to 99999 and then
started from 'O' 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 'O' to '99999', and then again started from 'O' to 45655.
According to the department the number of called meter was
D
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
\ E 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 reading was 75985
and the closing reading was 6550~. There is no way the
F 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
G 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 revoiution was missed; the· Bill for the period should have
H
SAJI GEEVARGHESE v. ACCOUNTS OFFICER 15
~ (TELEPHONE REVENUE) & ORS. [RV. RAVEENDRAN, J.]

been for 17378 units (that is 82886-65509). But the bill for A
* 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 B
not find any irregularity in the bills for the periods covered by
y
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 for 117378 calls (as against 4100
calls shown in the Bill dated 11.5.1995) for the said periods
c
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 D
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 E
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 ba~k-period and sought to rectify such
underbilling.
F
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
G
guidelines for disposing of excess billing 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
H
(4.3) We have to be vigil;~nt about 4.1 (b) and ensure that
E 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
F 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
G
billing complaint.

(5.1) Detailed instructions have been issued separately in
regard to watching the meter readings of various
subscribers and action to be taken on them.
H
SAJI GEEVARGHESE v. ACCOUNTS OFFICER 17
~ (TELEPHONE REVENUE) &Q~S. [RV. RAVEENDRAN, J.]

,.... (5.2 These broadly consist of A

(a) Meter readings being taken every fortnight;

(b) Identifying all subscribers whose current to~·nightly
readings show a sudden spurt; and
B
(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. c
(5.3) In order to establish the Department's credibility and
to satisfactorily investigate complaints about exce.ss billing
it is necessary that these steps are taken conscientiously.
It appears that in many stations, while meter readings are
r- being taken regularly every fortnight, the difference is not
D
being struck and all cases of spurts are not being brought
out.
I

(5.4) In all cases, the meter readings registers must provide
for the difference being noted. Somebody should be held E
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 F
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
G
4 suitable observation equipment in all exchanges having
STD facilities, so that once a spurt is noted, the line is
actually put on observation.

xxxxxx''
H
18 SUPREME COURT REPORTS [2008] 15 S.C.R.

A 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
B any occasion for a special spurt after a complaint has been
received. This should have been made, if justified, y
immediately after the spurt was noticed in th~ fortnightly
readings. It has been noticed that no useful purpose is
served by un.dertaking such investigations after an
c excess billing complaint has been received.

Gu_idelines for decisions and conveying the same

7.1 In all cases in which the investigations reveal that

D (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
E
(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.
F
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
G 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
H reading fortnightly and if there is a sudden spurt, place the
SAJI GEEVARGHESE v. ACCOUNT~ OFFICER 19
(TELEPHOf\lE REVENUE) & ORS. [RV. RAVEENDRAN, J.]

telephone line under observation and depute responsible staff A
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 subsequent monitoring may not be of any
use to identify the real cause for the spurt (unless the cause is s
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 C
start from the reading 'O' (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 D
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 E
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. lt is thus clear F
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): G

H
20 SUPREME COURT REPORTS [2008] 15 S.C.R.

A Bill date Period Units consumed Units consumed
as per bills after taking note
served on the of completion
subscriber of revolutions
11.3.1995 25.12.1994 to 2800 89523
B 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.ff1995
c 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
D 25.10.1994 to 25.12.1994) he complained to the Junior i
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
E period 25.4.1995 to 25.6.1995). Only thereafter the department
inspected the system and verification of recording. On such
verification, it claims to have found not excess billing, but
underbil/ing during the period covered by the period
25.12.1994 to 25.2.1995, 25.2.1995 to 25.4.1995 and
F 25.4.1995 to 25~~.1995 covered by the bills dated 11.3.1995,
11.5.1995 and .~W.7.1995 and consequently sent a revised
consolidated bill dated 11.9.1995, by rectifying the alleged
underbilling.

G 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
H
SAJI GEEVARGHESE v. ACCOUNTS OFFICER 21
(TELEPHONE REVENUE) & ORS. [R.V. RAVEENDRAN, J.]
~

___, period 25.12.1994 to 25.8.1995. If the correct number of calls A
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 B
to have been done, the verification/inspection/ monitoring
)'
mechanism could and would have been activated and lhe real
reason for the spurts would have been identified. On account
of the failure to record the meter reading properly in time, the
opportunity to monitor, inspect and identify which of the three
reasons mentioned in clause 4.1 of the guidelines; resulted in
c
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
D
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 E
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. F

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 demonstrate the significance by an G
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
H
22 SUPREME COURT REPORTS [2008] 15 S.C.R.

A 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
8 in 1993 and 1994; that even during 1995 also, bimonthly bills
were sent for around 5000 units; and that in 1996 the
. department alleges thatthere was underbilling in 1995 and sent
bimonthly bills ea~h for say 100000 units. Then how does the
. subscriber defend himself against the claim? How can h.e set
C 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.

D 16. If the completion of revolutions had been noticed and ·
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
E defects were rectified. In addition it would have also been
possible to verify as to whether tllere 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
F 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
G 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.
H
SAJI GEEVARGHESE v. ACCOUNTS OFFICER 23
(TELEPHONE REVENUE) & ORS. [RV. RAVEENDPAN, J.]

If the corrections made on noticing the omissions, when A
incorporated, results in raising a less 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 B
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 c
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 D
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 E
payments. He also ignored the admissions by the department.
He upheld a retrospective revision resulting in a huge claim.
These visible errors on 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 F
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 G
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
H
24 SUPREME COURT REPORTS [2008] 15 S.C.R.
>--
A right of the subscriber to object to the increase and secure r
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
8 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
of the High Court and the Award of the Arbitrator and direct as
c
.
follows:

(i) As trye 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
D .complaint was only six months later, the appellant 1
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,
E
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
F 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
G appellant.

S.K.S. Appeal allowed.