Guindy Machine Tools Limited vs Tamil Nadu Electricity Board and Others

E. Padmanabhan, J.—The petitioner, a Public Company has prayed for the issue of a writ of certiorarified mandamus calling for the records

of the respondents leading up to the second respondent''s order dated 17.8.2001 under reference No. Lr.CE/D/CNR/EET/T.2/F, Guindy

Machine Tools/South/D/913.2001, quash the same as illegal and direct the second respondent to pass orders afresh as per law after considering

and taking into account the various grounds raised in the petitioner''s appeal dated 3.8.2000.

Heard Mr. Ashok Menon, learned Counsel appearing for the petitioner and Mr. N. Muthusamy, learned standing counsel appearing for the

respondents.

The petitioner company, a consumer for the last 40 years, applied for additions of machinery to the Chief Electrical Inspector during 1997. The

Chief Electrical Inspector by letter dated 28.7.1997 approved the additions of machinery, which approval was forwarded to the Tamil Nadu

Electricity Board as well. The petitioner was awaiting inspection of the machineries by the Electrical Inspector, Kancheepuram for the issuance of

permission to commission the machineries installed as per the plan approved by the Chief Electrical Inspector. After acquiring the machineries and

subject to approval of the Chief Electrical Inspector and grant of permission for commissioning the petitioner installed all the additional machineries

kept ready, but they were idle and had not been used or energised.

On 7.4.1998 the Assistant Electrical Inspector, Kancheepuram Division inspected the installations and indicated that no unauthorised additions

were found on his inspection of the petitioner''s plant. In other words the petitioner has been utilising only those machines in respect of which the

safety certificate has already been issued prior to the year 1997.

On 28.7.1998 at about 2.30 p.m. the 5th respondent conducted a check of the petitioners factory. The said 5th respondent on a mistake came

to the conclusion that the petitioner was using seven machines installed as per the approved plan without securing safety certificate in respect of

those seven machines. According to the petitioner the said machineries had not been used at the time of the respondent''s inspection and in fact had

not been used at all right from the installation nor it has been energised. Without conducting a full and thorough inspection of the factory, the 5th

respondent jumped to the conclusion seeing a plan for the proposed machines that were available at the factory at the time of inspection. In fact no

inspection was carried out. The 5th respondent merely looked at the proposed plan and prepared the mahazar. This was brought to the notice of

the 5th respondent. But he defiantly did not take heed of the same. In the observation mahazar signature of one Jayachandra Babu an employee of

the company was obtained and he signed it without understanding the implication and what has been written in it. The 4th respondent issued a

show cause notice to the petitioner on 4.8.1998 stating that the petitioner has connected unauthorised connection load of 66.9 KVA over and

above the sanctioned load of 250 KVA which was detected during the inspection of the 5th respondent.

According to the show cause notice it is alleged that the petitioner has connected 66.9 KVA to the Board Mains and they were in working

condition without obtaining safety certificate from the Chief Electrical Inspector to the Government and without the permission of the Electricity

Board. By the said show cause notice the petitioner was called upon to state his objections while calling upon the petitioner to show cause why

compensation charges for the alleged violation should not be levied and collected in terms of the Clause 6.02 of the schedule to the terms and

conditions of Supply of Electricity. The petitioner submitted a detailed reply on 11.8.1998. The petitioner also requested that details of the

Amendment dated 25.9.1997 to be furnished to him. The petitioner also submitted additional representation to be considered by the 4th

respondent. The petitioner received a notice to appear on 8.9.1998 at 3.00 p.m. in the chamber of the third respondent. But the third respondent

was not present. The third respondent subsequently informed the petitioner over phone that he has decided to send the matter to Anti Power Theft

Squad for further check on the details furnished by the petitioner. The petitioner also intimated that the machineries installed had been inspected by

the Assistant Electrical Inspector, Kancheepuram Division. The petitioner was informed over phone that its explanation has been accepted and

further action been dropped. For nearly two years nothing was heard from the respondents. Surprisingly on 7.6.2000 the third respondent passed

an order levying compensation charges at Rs. 4,86,365 and the petitioner was permitted to pay the amount in monthly installments of Rs. 48,600.

The petitioner once again addressed the third respondent that his earlier reply dated 11.8.1998 and 25.9.1998 had not been considered. In fact

the assessment order dated 7.6.2000 was served on the petitioner only on 9.6.2000, while the first installment to be paid even according to the

said proceedings was fixed as 8.6.2000. The avoid disconnection the petitioner has paid the first installment on 9.6.2000.

The petitioner filed W.P.No. 1148 of 2000. However, the petitioner was directed to prefer an appeal before the appellate authority. The

appellate authority enquired into the matter on 18.9.2000. Thereafter nothing was heard till 20th August, 2001 from the respondents and on which

date the petitioner received a communication dated 17.8.2001 reducing the compensation charges from Rs. 4,86,365 to Rs. 3,55,102 by

restricting the period of violation from 14.3.1998 to 28.7.1998 being allegedly the date of CEIG''s inspection to the date of APTS''s inspection

instead of the back period of 6 months from the date of detection of alleged violation. The petitioner had been called upon to say the balance of

Rs. 2,57,537 in eight installments. Challenging the same, the present writ petition has been filed.

The learned Counsel for the petitioner contended that the entire order of assessment passed by the third respondent as affirmed by the second

respondent are prima facie illegal, arbitrary, vitiated by illegalities, besides the proceedings are non speaking. It is further contended that no reason

has been assigned for assessing the compensation and calling upon the petitioner to pay a huge amount. The third respondent has overlooked the

objections raised by the petitioner on 11.8.1998 and 25.9.1998 and it just referred to the letter dated 9.8.1998 which is only a formal letter

informing the absence of third respondent in the office on 8.9.2000.

It is contended that the respondents have not taken into consideration of the objections and the failure to advert and consider the objections

vitiates the impugned proceedings. It is contended that the third respondent did not conduct any enquiry and more than two occasions when the

Managing Director of the petitioner company attended the hearing the third respondent was not present and there being no enquiry that second

respondent should have remanded the matter to the third respondent for conducting an enquiry.

It is contended that no new plant or machinery has been connected or energised, but machineries have been added to the existing machineries

and kept ready for inspection after obtaining the prior sanction of the Chief Electrical inspector.

Per contra, Mr. N. Muthusamy, learned standing counsel for the respondents contended that no interference is called for with respect to the

impugned orders as sufficient opportunity has been afforded to the petitioner and there is no illegality warranting interference either with the order

of the third respondent or with the order of the second respondent.

From the show cause notice it is sent that the Executive Engineer has pointed out the sole violation, which reads thus:

Unauthorised additional load of 66.9 KVA over and above the sanctioned load of 250 KVA (Additional loads were connected to K.B. Mains

and in working Conditions without obtaining safety certificate from Chief Electrical inspector to Government and without Board''s permission.

To the said show cause notice for alleged violation, the petitioner submitted an explanation on 11.8.1998 stating that it has already submitted

drawings for approval in respect of the proposed additions in the plant and machineries to the chief Electrician Inspector during 1997 and the same

was approved by the Chief Electrical Inspector on 28.7.1997. It has been further stated that the petitioner was only in the process of effecting

additional machineries proposed and implementing the work relating to the cabling the connections, earthing etc., for the new machineries. New

machineries were not operated and they were kept idle awaiting inspection and certification by the Chief Electrical Inspector. It was pointed out

that on 7.4.1998 there was an inspection by the Assistant Electrical Inspector, Kancheepuram Division, reporting the details of installation and if

there had been any additional machineries or unauthorised additions installed were found working, the said authority would have taken action. The

petitioner further stated that it had never crossed the maximum demand load contract of 250 KVA. It is further pointed out that the KVA value of

machines alleged as unauthorised additions mentioned by the Anti Power Theft Squad Engineer is wrong. The total H.P. Value of 64.72 arrived at

in the annexure, will correspond only to 60.6 KWA, sanctioned load. It was further pointed out that the assessment of damages is higher than the

prescribed High Tension Tariff structure.

The petitioner also sought for connecting the additional load as certified by the Electrical inspector. On 7.6.2000, the third respondent by

proceedings has merely stated that on detailed examination of statement and consideration of letter dated 9.9.1998, the said authority concluded

that the petitioner has committed violation of the terms and conditions of supply and in that view assessed the damages payable by the petitioner at

Rs. 4,86,365. It is to be pointed out that the third respondent has merely held that there is violation of terms and conditions of supply, but there is

no discussion or reference to the objections submitted and the details of hearing and the enquiry wherein the petitioner submitted number of

materials. A working sheet has been enclosed along with the said assessment order.

Before the appellate authority also the petitioner raised number of contentions and the appellate authority also has just revised the

compensation restricting the period of violation from 14.3.1998 to 28.7.1998 namely the date of CAEIG''s inspection date and the date of

APTS''s inspection, instead of back period of six months from the date of detection of alleged violation. The appellate authority had not considered

any of the objections or points raised by the petitioner. Nor it has assigned any reasons while rejecting the explanation submitted and held that the

petitioner is guilty of violation.

Mr. Ashok Menon, learned Counsel for the petitioner is well founded in this respect. The order impugned passed by the original authority

namely the third respondent as well as the appellate authority, the second respondent are non speaking and number of objections submitted by the

petitioner and the explanation offered, various contentions advanced have neither been adverted, nor been considered and the order is vitiated by

non application of mind. At least had there been a speaking order setting out few reasons in support of their respective conclusions, this Court will

not interfere with the proceedings. But the orders passed by the original authority as well as the appellate authority are non-speaking and bald and

there is no consideration or application of mind by either of them. On these short ground, the impugned proceedings of the second respondent as

well as that of the third respondent are liable to be quashed.

The Electricity Board itself in its permanent B.P. (Ch.) No. 203, dated 23.10.1998, issued the following clarification:

The word ""expansion"" in Clause 33.02 of terms and conditions of Supply of Electricity means extension of supply either to other purpose of (e.g.,

for construction purpose) or other separate expansion/new unit in a separate building. Hence, the additional loads connected in the existing service

in the same building in the same premises for the same purpose need not be considered as ""expansion"" and hence levy of compensation charges as

per Clause 31.02 of terms and conditions of Supply of Electricity will not arise. However, H.T. consumers are entitled to connect additional loads

in their existing services only with the prior approval of the board. For such cases of connecting additional loads without prior approval of the

Board, action has to be taken as per Clause 22.01 of terms and conditions of Supply of Electricity and no compensation charges need be levied.

In the light of the said direction, no compensation charges could be levied at all on the facts of the case.

The learned Counsel for the petitioner also brought to the notice of the Court with respect to the amendment, which came to be issued on

26.4.2000, to the terms and conditions of Supply by which Sub-Clause 3.02 to Clause 37 Schedule Part I of the terms and conditions of Supply

of Electricity and it reads thus:

Compensation charges need not be levied for those consumers who have officially recorded their readiness for availing additional loads in Board''s

register as directed by the officer concerned, if they are found to run the machines before sanctioning such additional loads and/or before taking

revised test report. However a notice will be issued to stop the usage of such loads until regularisation of additional loads.

This amendment introduced to the terms and conditions of Supply of Electricity has been lost sight of. The amendment was introduced by the

Board''s Circular dated 26.4.2000, on the date on which the third respondent, the original authority passed the impugned orders. According to the

amendment no compensation charges need be levied for those consumers who have officially recorded their readiness for availing additional loads

in Board''s register.

In this case, admittedly the petitioner has applied for approval of the Chief Electrical Inspector''s Certificate, which was also inspected by the

Electrical Inspector, Kancheepuram Division and the Chief Electrical Inspector has issued a certificate of safety and the same has been

communicated to the 5th respondent. The petitioner has also intimated the proposal to add the machineries and also his securing safety certificate.

Thus it is clear that the petitioner has done whatever is required under the Rules.

Therefore Sub-clause 6.02 of Clause 17 applies to the case of the petitioner. Since the petitioner has not only applied for safety certificate but also

moved the respondent for additional load as well as permission to connect the additional load, besides its readiness. Hence, no compensation

could be levied as against the petitioner in the light of the said provision as amended.

Further even otherwise there is inordinate delay in passing the impugned order by the third respondent so also by the second respondent which

vitiates the proceedings. That apart, in terms of the 37 Schedule, Part I ""Violations and theft of energy"" under Clause 2.04 for unauthorisedly

extended or unauthorisedly shifted or misused demand in KVA shall be charged at the rate of twice the highest High Tension Tariff rate per KWA

of maximum demand per month for a total period of existence of violation subject to a maximum of 6 months.

In this case the appellate authority has restricted the period of violation between 14.3.1998 and 28.7.1998. Merely, because CEIG has

inspected on 14.3.1998, it does not mean that the petitioner has violated and had connected additional load immediately thereof. The inspection

was on 28.7.1998 and there is nothing to show that before 27.7.1998 the additional machineries or additional load had been connected. Even

according to the terms and conditions for unauthorised extension the maximum demand/levy, if any, is twice the highest High Tension tariff rate per

KWA of maximum demand per month for a total period of existence of violation subject to a maximum of 6 months, for the first violation. That

being so the compensation charges levied as assessed is not in conformity, with the terms and conditions. On this ground also the imposed levy is

liable to be quashed.

It cannot be held that the petitioner has acted deliberately with an intention to violate the terms and conditions of Supply of Electricity, but the

petitioner has made arrangements and has been waiting for more than two years for getting approval of the Electrical Inspector and getting the

additional load sanctioned and inspected by respondents. Therefore even according to the Board''s existing conditions, no compensation could be

levied.

In the circumstances, the impugned assessment orders passed by the respondent No. 3 is modified by the second respondent, the appellate

authority are quashed and the amount collected by the respondent- Electricity Board pursuant to the impugned proceedings shall be refunded or

adjusted towards the future monthly current consumption charges.

Writ petition is allowed. Consequently connected W.M.P. is closed. No costs.