Best Cotton Mills and Another vs Chief Engineer (Distribution), Tamil Nadu Electricity Board and Another

R. Sudhakar, J.—Both Writ Petitions are filed praying to issue a Writ of Certiorarified Mandamus, calling for the records of the second

respondent in his letter No. SEU/UDT/AEE/GL/AE/SDM/F.HT. GL/D. No. 0513/12 dated 12.03.2012, quash the same as unsustainable in law

and consequently direct the respondents 1 and 2 to install dedicated feeder vide application dated 21.07.2005. Mr. S.K. Rameshwar, learned

standing counsel appearing for the electricity board takes notice on behalf of the respondents. By consent both the writ petitions are taken up

together for final disposal.

The two petitioners are private limited companies and have a separate high tension electricity service connection. Petitioner Best Cotton Mills

draw electricity supply under HTSC No. 129 and the petitioner Balu Spinning Mills Pvt. Ltd., draw electricity supply under HTSC No. 197. In

view of the power crisis prevailing in the State, the petitioners wanted to avail power through third party sources to meet their industrial

consumption requirements and for this purpose wanted to install a dedicated feeders since no looping of the injected energy is possible in

categories of consumers in the vicinity. The dedicated feeder line, according to the petitioners, will help the petitioners as well as Board to arrest or

stop leakage of electricity. For this purpose, on 21.7.2005, the two petitioners made a joint application to the second respondent to provide a

separate 22 KV feeder to the petitioners industries. This was sanctioned by the second respondent vide letter dated 21.12.2005 and the

petitioners were directed to remit a sum of Rs. 9,24,960/-in favour of the respondent Board. The above amount was deposited by receipt dated

19.1.2006. They executed an agreement to the effect that after executing the work, due to escalation in cost of materials, if any excess amount is

payable, it would be borne by the petitioners as requested by the second respondent. In spite of complying with all the requirements as above, the

respondents failed to provide the dedicated feeder, as per the sanction dated 21.12.2005. The matter is kept pending for a long number of years.

On 27.2.2012, a follow up request was made for the dedicated feeder line. In response to that, the impugned communications were received in

letter No. SEU/UDT/AEE/GL/AE/SDM/F.HT GL/D. No. 0513/12 dated 12.3.2012 which are under challenge. For better clarity of the issue the

brief order of the Superintending Engineer in respect of Best Cotton Mills is set out hereunder:-

Adverting to the above, while scrutinizing the records for considering your request for transfer of Distribution Transformer from 22 KV Best --

Balu feeder to 22 KV Town feeder fed from 110/22KV Dharapuram Substation under DCW basis, it is found that sum of Rs. 62,30,286/-

(Rupees Sixty two lakhs thirty thousands two hundred and eighty six only) is outstanding towards excess over charges for peak and Normal hour

in your concern of HT Sc No. 129, M/s. Best Cotton Mills.

Therefore, you are requested to remit the above outstanding arrears for considering your application.

The receipt of this letter may be acknowledged.

In respect of Balu Spinning Mills the impugned order reads as follows:-

Adverting to the above, while scrutinizing the records for considering your request for transfer of Distribution Transformer from 22 KV Best --

Balu feeder to 22 KV Town feeder fed from 110/22KV Dharapuram Substation under DCW basis, it is found that sum of Rs. 72,43,1267-

(Rupees Seventy two lakhs forty three thousands one hundred and twenty six only) is outstanding towards short levy of excess demand due to

non-implementing of quota demand in your concern of HT Sc No. 197, M/s. Balu Spinning Mills Pvt. Ltd., as per TNERC suo motu proceedings

No. 1, dated 28.10.2009.

Therefore, you are requested to remit the above outstanding arrears for considering your application.

The receipt of this letter may be acknowledged.

Aggrieved thereby, the present writ petitions have been filed.

At the outset, Thiru AR.L. Sundaresan, learned senior counsel for the petitioners states that the demand of Rs. 62,30,286/- in respect of HTSC

No. 129 of Best Cotton Mills is subject-matter of an order of interim stay passed by this Court in W.P. No. 18789 of 2010 by order dated

17.8.2010 and that interim order is extended from time to time. Insofar as the Balu Spinning Mills is concerned interim stay was granted on

22.12.2010 and extended until further orders in W.P. No. 28008 of 2010, against the demand for a sum of Rs. 72,43,126/- from M/s. Balu

Spinning Mills towards short levy of excess demand due to non-implementation of quota demand. He, therefore, submitted that the impugned

orders demanding the remittance of the outstanding arrears for considering the applications for the dedicated feeder line, cannot be justified.

Learned senior counsel for the petitioners referred to Tamil Nadu Electricity Distribution Code, 2004 which prescribes the manner in which the

distribution of the electricity supply should be regulated or facilities refused. He referred to section 27 of the Tamil Nadu Electricity Distribution

Code, 2004 and it reads as follows:-

Requisitions for supply of energy:- (1) The provision regarding the duty of Licensee as detailed in section 43 of the Act to supply electricity on

request is reproduced below:

(1) Save as otherwise provided in this Act, every distribution licensee, shall on an application by the owner or occupier of any premises, give

supply of electricity to such premises, within one month after receipt of the application requiring such supply:

Provided that where such supply requires extension of distribution mains, or Commissioning of new sub-stations, the distribution licensee shall

supply the electricity to such premises immediately after such extension or Commissioning or within such period as may be specified by the

Appropriate Commission.

Provided further that in case of a village or hamlet or area wherein no provision for supply of electricity exists, the Appropriate Commission may

extend the said period as it may consider necessary for electrification of such village or hamlet or area.

Provided that the licensee will refuse to supply electricity to an intending consumer who had defaulted payment of dues to the licensee in respect of

any other service connection in his name.

(Emphasis supplied)

According to the learned senior counsel for the petitioners, as per the third proviso to Section 27 of the Electricity Distribution Code, the

respondent licensee can refuse to supply electricity to an ""intending consumer"" who had defaulted payment of dues to the respondent licensee in

respect of any other service connection in his name. It should mean that if a new service connection is sought for by a party and if there is a default

in payment in any other service connection standing in petitioner''s name, then they can refuse. In the present case, all that the petitioners asking is

for the dedicated feeder/transmission line to the existing service connection on payment of necessary charges which has been paid already. There is

no restraint in granting such a benefit if the petitioners comply with the requirement for grant of such facility. The one and only reason given by the

authority is that certain amount is due as outstanding in respect of the HT Service connection of the two petitioners. According to the learned

senior counsel for the petitioners, the respondent authority has failed to take into consideration that the demand made in respect of the two HT

Service Connection are subject-matter of pending writ petitions challenging the respondents demand and interim orders staying such demand has

been passed. The said interim orders are extended from time to time. The respondent Board has not chosen to vacate the said order. Therefore,

the demand of the said amount which are subject-matter of pending litigation before this court will amount to disobeying the order the High Court

and seeking recovery indirectly what they failed to do directly. The respondent authorities have conveniently and deliberately ignored the interim

order of the court, while making the said demand as a precondition for grant of the facility. There is no reference to the pending writ petition and

the interim orders in the impugned proceedings even though the very same Superintending Engineer is a party respondent in the earlier writ

petitions. This will establish the colourable exercise of power and arbitrariness in their approach.

Learned counsel for the respondent on the other hand relied on the decision of the learned single Judge in W.P. No. 12507 of 2011 dated

23.11.2011 M/s. Vishnuvardhan Paper Mills (P) Ltd. v. Tamil Nadu Electricity Board and two others to contend that the order of stay in respect

of the two HT Service Connection would only enable the petitioners to enjoy uninterrupted power supply. The stay is only with regard to the

enforcement of demand which form the subject-matter of those writ petitions. It does not preclude the department to seek payment of dues for

other benefits sought for. He referred to the order to state that the order of stay granted by this Court does not obliterate the demand made for all

purposes. If the petitioners want the dedicated feeder line, they have to pay the pending dues. Since the petitioners seek other facility, despite the

interim order of stay, the respondent authority has a right to insist on the payment of above amount.

In sum and substance, learned counsel for the respondent relied upon para 41 of the order dated 23.11.2011 passed in W.P. (MD) No. 12507

of 2011 which reads as follows:-

Therefore, it is clear that all the companies are closely held family companies. Hence, there was nothing wrong in the respondents demanding

payment of the dues of those companies, which form the subject-matter of other writ petitions. The petitioner contends that the demand of the

amounts whose collection is stayed by this Court in the other writ petitions would amount to a circumvention, if not contempt of the stay orders of

this Court. But this contention cannot be accepted. The stay granted by this Court in the writ petitions filed by the sister companies of the

petitioner, would go only so far as to enable those writ petitioners to enjoy uninterrupted supply, subject to the compliance with all other usual

conditions, except the demand for payment of the charges made under the orders impugned in those writ petitions. What is stayed is only the

enforcement of the demand, which forms the subject-matter of those writ petitions. The stay does not obliterate the demand made for all purposes

whatsoever. Therefore, when the petitioner herein or the petitioners in those writ petitions seek any other facility, which does not form part of the

subject-matter of those writ petitions, the respondents would naturally have a right to insist upon payment of those amounts.

The facts in that case are different from the facts of the present case and can be distinguished. This is not a case of group of companies defaulting in

payment so as to lift the corporate veil. The petitioner Companies have filed the earlier writ petitions and obtained interim orders. In any event,

demanding payment for other facilities despite interim orders of court would amount to negating the order passed by the Constitutional Court. By

no stretch of imagination one can accept that interim order of a writ court can be overridden by an executive authority on the plea of providing

other facility. The prescription as to what are other facility should be specific and supported by Act, Rule or Regulation. It cannot be generally

stated that for seeking other facility the payments should be made, despite orders of writ court, interim or final.

A counter-affidavit is filed in W.P. No. 11102 of 2012 and paras 10,14 and 16 reads as follows:-

I further submit section 5(2)(IV) of the Tamil Nadu of the Tamil Nadu Electricity Supply Code, 2004 states that no addition or reduction of

load in case of LT service and no addition or reduction of demand in case of HT service, may be sanctioned unless the outstanding dues in the

same service connection had been paid. Hence an outstanding amount of Rs. 72,43,126/- (Rupees seventy two lakhs forty three thousand one

hundred twenty six only) is pending to be paid by the petitioner.

I further submit that under the provision of regarding the duty of licensee as detailed in the section 43 of Electricity Act, 2003 to supply

electricity on request by the consumer, and as per clause 27(1) of chapter 6 -- Terms and conditions for supply of electricity in Tamil Nadu

Electricity distribution code, as approved by TNERC notification No. TNERC/DC/8/1 dated 27.01.2004. ""The licensee will refuse to supply

electricity to an intending consumer who had defaulted payment of dues to the licensee in respect of any other service connection in his name"".

Hence, the petitioner is liable to pay the outstanding amount to TANGEDCO, for considering his application for separate 22 KG dedicated

feeder.

I respectfully submit that the petitioner has already paid necessary charges of Rs. 4,62,980/- for provision of separate new Vacuum circuit

breaker at 110/22 KV Dharapuram Sub-station as per their application dated 21.07.2005. All the works were completed and new Vacuum

circuit breaker charged on 07.06.2006. Now the petitioner has given application to TANGEDO on 27.02.2012 along with another HT consumer

M/s. Best Cotton Mills HTSc No. 129 for provision of separate 22 KV dedicated feeder under deposit contribution work. For this new

application, necessary estimated (cost of materials, labour, transport, Supervision charges etc.) has to be prepared and the applicants have to pay

the estimate charges. After which only, the work can be carried out and 22 KV separate dedicated feeder could be provided to the petitioner.

Regulation 5 of the Tamil Nadu Electricity Supply Code, 2004 refers to Miscellaneous charges and sub-regulation (2) deals with excess

demand charge. Sub-regulation (2)(iv) which is relevant reads as follows:-

(2) Excess demand charge: Whenever the consumer exceeds the sanctioned demand, excess demand charge shall be:

(i) xxx

(ii) xxx

(iii) xxx

(iv) No addition or reduction of load in case of LT service and no addition or reduction of demand in case of HT service, may be sanctioned

unless the outstanding dues in the same service connection had been paid.

The respondent counsel relies upon the provision to state that the authority is justified in insisting on payment of outstanding dues in the same

service connection. It is pertinent to note that in the case of Best Cotton Mills, there is excess demand for exceeding peak and normal hour

consumption. Insofar as the Balu Spinning Mills concerned there is a short levy of excess demand due to non-implementation of quota demand in

HT Service Connection based on audit objection. This has been challenged before this Court.

Both these issues as above admittedly are subject-matter of respective writ petitions and interim order of stay has been granted and extended

from time to time. Further, it is not a case of addition or reduction of demand of HT Service. Hence the provision will not apply. The request for

Dedicated feeder line will not come within the scope of Regulation 5(2)(iv) and therefore, the said plea is misconceived.

It will be relevant to point out that the said demand is consequent to a claim by the department under the Tamil Nadu Electricity Supply Code,

under Regulation 5(2) which deals with excess demand charges. In respect of the excess demand charges, Regulation 5(2)(iv) provides that no

addition or reduction of load in case of LT service and no addition or reduction of demand in case of HT service may be sanctioned unless the

outstanding dues in the same service connection had been paid. All that sub-regulation (2)(iv) of Regulation 5 states that whenever the consumer

exceeds the sanctioned demand, no addition or reduction of demand is possible without paying the outstanding dues. There is no dispute on this

position. The fact remains that in the present case, in respect of both the petitioners, excess demand charges has been challenged before the court

and there is an order of interim stay which is in force and has not been vacated. This fact is not disputed by the respondent. In such a situation

whether the respondent authority will be entitled to issue the impugned order demanding the payment of the said amount as a pre-condition for

commissioning the dedicated feeder line which is totally different from the pending this. On this plea, the court''s view is clear and absolute ""no"".

First of all, the second respondent is a party respondent in the earlier writ petitions where the demand was challenged and that has been

stayed. The order of this Court staying the excess charges demanded has not been referred to in the impugned proceedings which is a deliberate

omission by the respondent. If the respondent insists on payment as above it would amount to circumventing in the order of the court passed in

W.P. No. 11057 of 2011 staying the demand. Such a power, the authority does not have. If a demand is made for payment of dues which are the

subject-matter of pending writ petition it will amount to negating the interim order of this Court without vacating the order of stay by procedure

prescribed. The respondents cannot claim payment of the amount indirectly which they failed to do directly that is by filing application to vacate the

interim order of court. An administrative authority by a mere letter, is trying to undo the order passed by the Constitutional Court in exercise of its

power under Article 226. If such an act of the respondent is allowed to continue, it would shake the foundation of judicial review of administrative

action by the Constitutional Court. This Court will not recuse itself from correcting such arbitrary acts.

The proviso to Regulation 27 of the Electricity Distribution Code speaks about the refusal to supply electricity to an intending consumer who

has defaulted in payment of dues to the respondent licensee in respect of any other service connection in his name. In the present case, it is not a

case of electricity supply to an intending consumer or a new supply. The respondents are not able to point out any other provision, and there is

nothing in the Distribution Code to hinder the grant of benefit to the petitioners as sought for.

Section 5(2)(iv) of the Electricity Supply Code will not apply to the facts of the present case as it deals with the case of addition or reduction

of load in the case of HT Service, which is not the case here. For the dedicated feeder line, the authorities have received the amount as specified

and an agreement has also been executed. No provision of law, regulation or Code is cited in the impugned order to state as to how the demand is

maintainable for providing the dedicated feeder line. The order should speak for itself. In the present case, the impugned orders are blissfully silent

on the issue.

It is rather unfortunate to note that the very same authority, who is a party respondent in the earlier writ petition which is pending before this

court, has failed to take note of the interim order before making such a demand. If a demand of this nature is made suppressing the pendency of

writ petition and the interim order and the authority wants to secure the payment despite the order of the court, it will amount to flouting the orders

of the court. Till the interim order of this Court is vacated, the respondent authority will have no jurisdiction to demand the payment. The action of

the respondent in suppressing the order of this court and directing the payment of dues which is stayed by court proceeding as a precondition for

extending the benefit of dedicated feeder line is contemptuous. It is an affront to the judicial system in our democracy. The right of the citizen to

seek legal remedy cannot be whittled down by such administrative action. The impugned order has been passed without any statutory backing and

it does not specify any rule or regulations. Hence, this Court has no hesitation to hold that it is bad and the impugned orders are liable to be set

aside. For the reasons stated above, the impugned orders are set aside and the Writ Petitions are allowed as prayed for. No costs. Consequently,

connected miscellaneous petitions are closed.