Trimborn Agricultural Engineering Ltd v Kenya Power & Lighting Co Ltd [2016] KEHC 3754 (KLR)

REPUBLIC OF KENYA

INTHE HIGH COURT OF KENYA AT NAKURU

CIVILAPPEALNUMBER143 OF 2009

TRIMBORN AGRICULTURAL

ENGINEERING LTD...................................................................APPELLANT

VERSUS

KENYA POWER& LIGHTING CO LTD.................................. RESPONDENT

(Being an appeal from the Ruling of Honourable C.A. Otieno Senior Resident

Magistrate, Nakuru in Molo CMCC NO. 267 of 2009 delivered on

1stJuly 2009)

J UD G M E N T

1. The appeal before the court arises from the ruling of the trial court  dated the 1st  July 2009 in Nakuru CMCC NO. 267 of 2009. The said ruling was to the effect that the appellants application dated 16th  March 2009 and the entire suit were struck out with costs.

The genesis of the suit before the trial court is stated in the plaint dated the16th    March  2009  and  the  defence dated  the  24th   March  2009. The appellant  had entered into a contract with  the respondent for supply  of electricity power to its premises and an Account No. 0462591­01 was opened and designated to the appellant.

Following thereafter, and upon continuous supply of electric power to the appellant, monthly bills were issued to the appellant and the appellant paid the same. However in January 2009, and without  notice to the appellant, the respondent changed the meter installed  in its  premises and further without  notice,  issued  bills  that  were higher  than  the average for  the previous period. Being aggrieved by the high monthly bills, and there having been no amicable settlement of the dispute, the Respondent issued a notice of disconnection of its power supply   to the appellant. This prompted the appellant to file  the suit together with  an application for an injunction to restrain the respondent from discontinuing power supply to its premises pending hearing and determination of the suit.

2. Upon   service  of the suit and application  papers, the respondent filed a defence and raised  a preliminary objection  the court did not  have the necessary jurisdiction to hear the application  as that was bestowed upon the Energy Regulatory  Commission and sought striking  out of both the application dated 16th  March 2009 and the entire suit.

Upon hearing the preliminary objection on jurisdiction, the trial court made a finding that  the proper forum  where the dispute ought to have been referred to was the Energy Regulatory Commissioncreated under the Energy Act 2006whose functions and duties were

“to investigate  complaints and disputes between parties  with disputes  over any matter required to be regulated under the Act.

The trial court therefore struck out the application and the entire suit with costs.

3. The appellant  preferred  this  appeal on  numerous  grounds  that  taken together may be summarised as follows:

1. That the Learned trial Magistrate erred in law in upholding thejurisdiction to entertain and hear the application on injunctiveordersand the suit and thereby struck out the same.

2. The learned    trial Magistrate erred in law in failing to hold and find that injunctive orders are the preserve of the court  only and thus erred  in not finding that the court had jurisdiction to grant the orders sought.

3. The trial magistrate  erred  in failing  to find that an injunction being  an equitable  remedy  can  only be  granted  by a court  of equity and not any other body.

4. The appellant  seeks that the orders dated 1st   July  2009 be set  aside and substitute them with  an order that the court has jurisdiction to hear and determine the  suit,  and remit  the  matter  back to  the  lower  court  for hearing and determination.

5. Parties tendered oral submissions before the trial court on the application dated 16th   March 2009. The appellant  sought an order  of  injunction against the respondent to restrain it from disconnecting its power supply to it pending the hearing of the application and suit.

From the above narration, two issues arise for the courts determination.

1. Whether the trial court had jurisdiction  to hear the dispute

2. Whether the Energy Regulatory Commission has powers to grant injunctive orders.

3. Whether the trial court was right in striking out the application for injunction and the entire suit.

6. Both counsel filed written submissions that essentially address the above issues.

For the appellant it was submitted that the court is seized with jurisdiction and citing Section 59(3) of the Energy Act stated that the Energy Regulatory Commission by dint of its objectives and functions lacks the power to issue injunctions; and that Section (4) of the said Act does not oust the courts jurisdiction. The court was referred to the case Kenya Horticultural Exporters (1977) Ltd vsKenya KPLC (2011)e KLR where the Judge held that disputes between a consumer and KPLC over electricity charges and bills ought to be referred to the Commission under Section 61(3) of the Act, but that does not oust the court's jurisdiction. The Judge went ahead to hold that subsection (4) gives a party latitude to elect where to take his dispute. The dispute was referred to the Commission without striking out the suit.

On whether the Commission can issue injunctive orders, Counsel submitted that the Act, by Section 6(4) may impose sanctions and penalties and not injunctions. He drew a distinction between injunctions and sanctions and submitted that it is only a court that may issue equitable orders and not a Commission or a tribunal. He urged that the trial court erred in law by striking the suit.

7. The Respondent's submissions are that  the dispute hereof falls under the provisions of Section 59 of the Energy Act No. 12 of 2006which provides that where a meter is no longer suitable to determine quantity of energy supplied,  the licensee  is  entitled to replace  the same at the cost of the consumer who interfered with  it, and pursuant to Section 59(3) of the for determination.Referring  to the case of Waweru Kariuki ­vs­ KPLCNKR HCCC No. 197 of 2009,it was submitted that the dispute falls under the jurisdiction of the Commission and not the court.

The Respondents agree that the commission has no powers to issue orders of injunction.

8. The court has considered the pleadings,  submissions and the trial court's ruling dated the 1st July 2009 together with the grounds of appeal.

The objects and functions of the Energy Regulatory Commission are set out in the Energy Act, 2006at Section 5that states:

“The objects and functions of the Commission shall be to ­

(k) investigate and approve meters  used or intended  to be used for ascertaining the quantity of energy

(l) Investigate  complaints  or  disputes between parties with grievances over any matter required to be regulated   under  this Act.

(o) Impose sanctions and penalties on   persons who  are in breach of any of the  provisions  of this  Act or any regulations made thereunder.

Section59(1)states:

“where themeter is  found to be defective  though no fault  of  the  consumer  or  the  licensee,  with consultation  of the  consumer, it  shall  determine the reasonable  quantity of electrical  energy supplied  and re­calculate the charges  due –­ to a maximum periodof six months­­­”(emphasismine)

Section61(3)provides:

“If any dispute arises as to

(a)     any charges or

(d)     any alleged defects on any apparatus or protective devices.

Itshallbe referred to the Commission

(4) Where any dispute  referred to in Subsection  (3)  has been referred to the Commission or has otherwise been taken to court  before a  notice  of disconnection  has been given by the  licensee, the  licensee shall not exercise  any of the  powers conferred  by this  Section until final determination of the dispute:”

(emphasis mine)­ See Section59(1)

9. Going back to the dispute, there is no dispute that the respondent without any reference and or notice  to the appellant  interfered with  the meter installed  in its  premises by removing  the same and installing a new one and therefore billed it with what it calls astronomical monthly charges and despite  its  protestations  failed  to  explain  the  same and threatened to discontinue its supply of  power.  I have not seen a notice of intention to discontinue  the power supply  to the appellant  issued  by the respondent. Nonetheless, to safeguard such an eventuality, the appellant filed the suit for an injunction in the trial court.

Ordinarily, the dispute ought to have been referred to the Commission to investigate under the provisions of Section 5(a)of the Act – Stated above.

10. I have interrogated the said Section. Subsection (o) gives power to the Commission to impose sanctions and penalties if there is a breach of provisions or regulations specified under the Act. In my understanding, a sanction is a punishment for breach of a condition, and so is penalty. The commission has not been given power to issue aninjunction which is described in the Blacks Law Dictionary as a

“prohibitive court order issued by a court of equity at the suit of a party, complainant directed to a party defendant in the action or to a party defendant for that purpose, forbidding the latter to do some act, or to permit his servants or agents to do some act, which he is threatening or attempting to do, commit or restraining him in the continuance thereof”

It further continues to describe a “penalty or punishment as a means of enforcing obedience to the law.”

I totally agree with counsel for the appellant that a Commission or a tribunal has no powers to issue equitable orders of injunction as such orders are the preserve of a Court of Law, and never a tribunal or any other body.

11.  The powers donated to the Commission by Section 5(a) of the Actare punitive by way of penalties and sanctions and not equitable orders of injunction that only a court can issue.  In the case Horticultural Exporters (1997) Ltd(Supra), the Judge rendered himself that Section 61(3) (a)of Energy Regulatory Actdoes not seem to oust the jurisdiction of the court over electricity consumption charges.

Section61(4)of the Act, in my view, gives each party an option to either refer the dispute to the Commission or approach the court.  This is to be guided by what reliefs the party would be seeking – either equitable remedies or sanctions.  In arriving at the above, I am minded that Section 61(3)of the Act is couched in mandatory terms.

I have considered the holding in Waweru Kiruki ­vs KPLC(Supra)where the Learned Judge faced with a meter tampering case held that the dispute ought to have been referred to the Commission he proceeded to strike the case out.

The circumstances in the present suit distinguishable. The respondent removed and exchanged the appellants meter without  any notice to them. No reasons  were advanced for  the removal  and exchange.  Further, no notice  of disconnection  was issued  by the respondent.  Refer to Section 61(4)of the Act.

I am persuaded, just like Justice Maraga, J, (as he  then was,),in the case Kenya Horticultural Exporters 1977 Ltd(Supra),that, the appellant has an option to elect which of the two for a, the court or the Commission was most suitable to deal with reliefs that he may be seeking.

12.  For those reasons, the court comes to the finding that the trial court erred in law in striking out the suit.   Striking out a suit is most draconian and should only be reverted to in very clear and circumstances, when it is plain that the court has no jurisdiction to entertain the claim.  The discretion should be exercised cautiously and sparingly and only in the clearest cases.

This is not one of those clear and plain cases for such discretion to have been exercised against the appellant. Article 50 and 159 of the Constitution 2010enjoins courts to dispense substantive justice without undue procedural technicalities. Summary procedure should be discouraged unless in the clearest of circumstances and cases.

13. The court takes note that there is already an order of stay of execution of the trial courts  orders pending hearing  and determination of this  appeal, but on terms. Those orders were issued on the 15th  September 2009.

For the above reasons, the appeal is allowed.  The trial courts ruling dated 1st July 2009 is set aside and the trial court case, Nakuru CMCC No. 267 of2009is reinstated for hearing and determination.  It is remitted back to the Chief Magistrate's Court for hearing and determination before a different Magistrate.

The Respondent shall pay costs of the appeal.

Dated, signed and delivered in open court this 14thday of June 2016

JANETMULWA

JUDGE