Cable House N-27 B.H.E.L. vs The Chief Engineer (Electricity), Hyderabad and another

Sayed Shah Mohammad Quadri, J.

The petitioner, a small scale industry, challenges the order passed by the 1st respondent in Appeal No. 3 of 1986, dated 6-2-1987 by praying for a writ of certiorari to call for the records relating to the said order and to quash the same.

The petitioner is doing the work of coating of G.I. wire 24 gauge on job-work basis for M/s. I.D.L. Chemicals Limited, Hyderabad. In carrying on its work the petitioner uses extruders with different types of motors. Apart from the motors, each extruder is provided with 3 sets of heaters known as (1) Die-heater with capacity of 400 Wts., (2) head heater of 300 Wts. and (3) tube heaters of 300 Wts. capacity. These heaters are used to mould the raw P.V.C. granules at the required temperature to use the P.V.C. for coating purposes. The functioning of the heaters would range between 15 minutes to half an hour before the extruders start functioning. After maintaining the required temperature the heaters will be switched off automatically. The capacity of each of the extruders, it is stated, does not exceed 2 Horse Power. All these particulars with regard to the machinery were furnished to the Andhra Pradesh State Electricity Board and on advice the petitioner applied for contracted load of 30 H.P. After the load was sanctioned, the petitioner-industry started functioning in 1977. From the date of the starting of the industry, the officials of the respondent Board inspected the machinery from time to time. It appears that in August, 1981 the flying squad of the respondent-Board inspected the petitioner''s factory and in computing the connected load, took into account the heaters connected to the extruders and worked out the connected load of the industry at 52.65 H.P. On the allegation that 22.65 H.P. energy was misused, action was initiated against the petitioner. In the meanwhile, a revised show cause notice was issued and the connected load was calculated at 57.57 H.P. During the course of the enquiry in respect of the alleged malpractice, the connected load was determined at 43.155 H.P, which was confirmed on appeal by the 1st respondent. In view of the said finding of the appellate authority, the petitioner applied for additional load of 20 H.P. on 15-7-1983. The respondent-Board informed the petitioner that new transformer had to be erected and the entire cost of the same should be borne by the industry. The Superintending Engineer of the Board, on being appraised of this stand of the officials of the respondent-Board, sanctioned the additional load without putting the petitioner to the necessity of hearing the expenditure of the new transformer on 4-9-1984.

it is stated that on 18-11-1983 the flying squad again inspected the petitioner''s industry and assessed the connected load at 42 H.P. and initiated proceedings for having connected load more than the sanctioned contracted load. The petitioner, to save the industry from the situation of the supply of the energy being disconnected, paid one half of the amount in demand (i.e. half of Rs. 14,567/- plus Rs. 100/-, towards supervision charges). Later the 2nd respondent confirmed the provisional assessment. The petitioner filed an appeal before the 1st respondent, which was rejected confirming the order of the 2nd respondent. The correctness of the order of the appellate authority communicated through Lr. No. CEE/WZ/MRT/A3-86; Rural/6962/87 dt. 9-2-87 is assailed in this writ petitions.

In the counter-affidavit filed by the Division Engineer of the State Electricity Board, it is stated that there are three heaters with a total capacity of 9.2 Kws. attached to the extruders. In view of the terms and conditions of supply they cannot be excluded in arriving at the connected load on the ground that they get switched off automatically on the extruders start functioning. It is stated that having connected load more than the sanctioned contracted load amounts to malpractice for which action can be taken against the petitioner. It is stated that the Board fixes the rating of the consumers equipments to determine the actual capacity of the equipment in order to fix loads and minimum charges. It is further stated that Clause 17 read with Clauses 18.3 and 39, makes it clear that rating and re-rating is quite different and distinct from the procedure prescribed for the additions or alterations to be made by the consumer to its equipments. The petitioner had been found guilty of connecting excess load without specific permission and he cannot be permitted to contend that the Board had not suffered any loss OB account of excess load. Clause 39.7.2 provides the measure of calculating the charges that can be collected from the consumers who have connected load in excess of the contracted load.

Sri B.S.A. Swamy, the learned counsel for the petitioner, submits that the instruments and the machinery of the petitioner-industry are of 30 H.P. This fact was disclosed at the time of applying for the connection. The same having been confirmed by the officials of the respondent-Board the petitioner cannot be proceeded against under Clause 13 for resorting to malpractice. The second contention of the learned counsel is that the same instrument or the machinery was rated and re-rated at different H.Ps. by the respondent, therefore, the excess in the connected load, if any, is only a technical error for which no action can be taken treating it to be a malpractice. The third contention is that once the respondent re-rated the instrument or the machinery at more than 30 H.P., the petitioner immediately applied for additional load on 15-7-1983. The sanction of additional load was delayed for extraneous reasons, but was ultimately sanctioned on 4-8-1984. Once the sanction is granted it would relate back to the date of application having regard to Cl. 18.3 of the terms and conditions, and it is, therefore, arbitrary and unjust on the part of the respondent to initiate disciplinary action for the same technical error and pass the impugned order for collection of charges.

Sri Nagarjuna Reddy, the learned counsel for the respondent-Board, submits that having regard to the terms and conditions of the supply, if the connected load is in excess of the contracted load it amounts to malpractice and the respondent-Board was, therefore, justified in taking action against the petitioner. He further submits that the mere fact that the petitioner had applied for sanction of additional load does not entitle the petitioner to operate the instrument or machinery, therefore, the action taken for the second time for use of the additional connected load cannot be said to be illegal or arbitrary.

He also submits that Clause 18.3 has no application to the facts of the case, it applies only in the case of rating and re-rating when there are additions and alterations to the instruments or the machinery.

The short question that arises for consideration is whether the petitioner is guilty of the alleged malpractice. The malpractice alleged is exceeding the contracted load. It may be appropriate to note the meaning of certain terms used in the conditions of supply for appreciating the question involved. Clause 39.1 defines ''malpractice'' in the following words:--

39.1 "Malpractice:-- The expression "malpractice" shall include any violation of law or the terms and conditions of supply framed under Sec. 49 of the Electricity Supply Act, 1948 including pilferage in particular, the following:

1.1 Supply of electricity to any service which is disconnected by the Board including illegal restoration of the consumer''s own disconnected service where the electricity consumption is metered.

1.2 Exceeding the contracted load without specific permission of the Board.

1.3 Addition, alteration and extension to the consumer''s premises without permission of the Board or extension to any premises other than that for which supply is given by the Board.

1.4 Non-compliance of orders imposing restriction on use of electricity during peak load hours.

1.5 Use of electricity for the purpose other than that for which supply is given by the Board.

1.6 Release of energy without the permission of the Board.

1.7 Pilferage: Pilfering energy with or without the aid of any device including the consumption of energy which is not metered and conduct, preventing the correct recording by the meter of the consumption of electricity."

''Contracted load''s defined in Cl. 2.15 to mean the connected load which the consumer requires and is so specified in the agreement or in the sanction accorded for the service.

''Connected load'' is defined in Cl. 2.14. It means the aggregate of the manufacturer''s rating of all the apparatus including portable apparatus on the consumer''s premises which is supplied with energy at the same rate.

From a perusal of the above definition of malpractice, it is obvious that exceeding the contracted load without specific permission of the Electricity Board also amounts to malpractice. When can it be said that a consumer is guilty of malpractice by exceeding the contracted load? Malpractice is a serious act attracting penal action. For purposes of exceeding connected load, there should be some conscious act or omission by or on behalf of the consumer causing change in the rating of the instrument/machinery, which should be without notice to the Board. But- where admittedly there has been no addition or alteration in the installation (instruments/machinery) and the excess in connected load is arrived at due to re-rating or re-calculation by the Board, it cannot be termed as malpractice; to say so would amount to punishing the consumer for the mistake of the Board''s staff. In the instant case, the instruments/ apparatus of the petitioner, at the time of giving the electricity connection, were rated by the petitioner as well as by the respondent-Board as 30 H.P. It appears that the contention of the petitioner that in calculating the connected load, the heaters attached to the extruders should not be taken into consideration, was accepted by the respondent and the connected load was calculated excluding the rating of the heaters. This position continued from 1977 till 1981 when the flying squad took into consideration the rating of the heaters also notwithstanding the fact that they do not function along with the extruders and operate only till the extruders start functioning. In the proceedings started against the petitioner on the basis of the report of the flying squad in 1981 the rating of the instruments or apparatus of the petitioner-industry was calculated by the respondent first at 52.65 H.P. That was altered at the time of the revised show cause notice and estimated at 57.57 H.P. At the time of final order it was altered to 43.155 H.P. and at the time of initiating the impugned proceedings it was calculated at 42 H.P. It is not the case of the respondents that after the installation of the instrument or machinery, the petitioner has altered the machinery so as to result in increasing the rating of the instrument/machinery. The instrument/machinery remains the same. Even the respondent-Board has initially rated the same as 30 H.P. In these circumstances on the ground that he has connected load in excess of the contracted load, it cannot he said that the petitioner is guilty of malpractice.

Clause 18 of the conditions of supply does empower the Board for rating or rating the installation of the consumer at its discretion and the rating and re-rating is binding on the consumer. Therefore, the first rating of the instrument/machinery by the Board at 30 H.P. is equally binding on the Board tilt re-rating of the installation is done under Clause 18. In 1981 the flying squad inspected the industry of the petitioner and the proceedings ended in rating the instrument/ machinery as 43.155 H.P. That rating is binding both on the petitioner and the respondent-Board. Immediately after re- rating, the petitioner applied for additional load. But this clause does not provide that if by virtue of the re-rating the connected load exceeds the contracted load, it should be deemed to have been sanctioned. Therefore, applying for additional load by itself does not help the petitioner. However, it must be pointed out here that a combined reading of Clauses 17 and 18.3 shows that any alterations or additions to the installations have to be made after notice to the Board. Consequent on additions and or alterations in the installations, a consumer has a right to apply to the Board for rating and re-rating and the Board is bound to have this done on payment of prescribed fees. The re-rating takes effect from the date of effecting additions or alterations or from the next meter-reading due following the date of payment of the fee, whichever is later, irrespective of the date of re-rating made by the Board. The position of the petitioner who did not make any additions or alterations in the installations (machinery/ apparatus) but applied for additional load on re-rating by the flying squad of the Board under Cl. 18 which is subsequently sanctioned, cannot be worse than that of the consumer who made additions and or alterations to the installations and applied for re-rating under Cl. 18.3.

Further action was taken against the petitioner for the alleged malpractice on the basis of first report of the flying squad while the petitioner and the Board were bound by the rating fixed in 1977, and for the same reason proceedings were taken against the, petitioner for the second time and he was made to pay charges.

For the aforementioned reasons the impugned order cannot be sustained; it is accordingly quashed. The 1st respondent is directed to consider the matter afresh in the light of the observations contained herein and pass appropriate orders. In case the 1st respondent waives the impugned charges, he is directed to refund the amount already paid by the petitioner or readjust the same towards the bills payable by him in future.

The writ petition is allowed accordingly. No costs.

Petition allowed.