M/s Thermax Limited and another vs The Superintending Engineer Madras Electricity Distribution Circle (Central) Tamil Nadu Electricity Board, Mount Road, Madras-2 and 2 others

Writ Petition No.2360 of 1993 is for the issue of writ of certiorarified mandamus to call for the records relating to the first respondent bearing

letter No.AEE/Gi/TI/D2/Maipractice/D/2840/92 dated 17.11.1992 confirming the order of the second respondent bearing proceeding

No.Lr.EE/0&/ANR/AE/IER/C753 dated 4.7.1992 and quash the same and to forbear the respondents from in any way levying or collecting

charges under the Tariff of Non-domestic purpose in respect of the service connection No.171.71.73 situated at Door No.27, Dr.Hegde Road,

Nungambakkam (Ground floor), Madras-34. ;

Writ petition No.20820 of 1993 is for the issue of writ of Certiorari to call for the records of the second respondent proceedings bearing

Lr.No.EE/0&M/ANR/AE/C.753/T3538/92 dated 31.10.1992 and quash the same.

The case of the petitioner is that the petitioner Company entered into an agreement of lease with one Irshad Ahmed who is the present owner of

the property namely the flat situated at No.27, Dr.Hegde Road. Sterling Road, Madras-34 for the purpose of providing accommodation to the

office staff and officers who visit Madras on duty relating to the petitioner''s Company. The petitioner Company is paying a sum of Rs.8,000 as the

rental amount to the said flat which is being used as its transit fiat and it is being used only, for a residential purpose. The electricity charges are

being paid only on the basis of the classification made by the respondent under the heading of domestic purpose and also the category of tariff 1.

While so, on the basis of an inspection made by the Assistant Engineer, M.E.D.L., Mahalingapuram, Madras-34 on 27.4.1992 in respect of the

service connection at Door No.27, Dr.Hegde Road, Madras, the third respondent Executive Assistant Engineer issued a notice dated 28.4.1992

as if the petitioner Company has violated the terms and conditions of the supply of electricity. The reason for the issue of such notice was that the

service connection in the transit flat of the petitioner''s Company at Door No.27, Dr.Hegde Road, Madras-34 is used for non-domestic purpose.

In the notice, the third respondent has also mentioned to show cause as to why the compensation charges for the abovesaid violation could not be

levied on the petitioner. According to the petitioner, the said fiat is used only as a transit house and the petitioner is not doing any work either in the

nature of commercial or in the nature of manufacturing process in the said premises. The petitioner Company has also submitted its reply to the

third respondent on 7.5.1992. However the second respondent without accepting the explanation submitted by the petitioner, has levied a sum of

Rs.40,287.00 as the compensation charges payable by the petitioner Company. The same was informed to the petitioner by order dated

4.7.1992. According to the respondents, the said amount was arrived at as if the abovesaid service connection is used for non-domestic purpose

and they have changed the tariff itself. According to the petitioner, the petitioner has paid a sum of Rs.10,070 towards the compensation charges

on 28.8.1992. The petitioner has also paid another sum of Rs.10,077 along with its letter dated 29.7.1992. The petitioner has also filed an appeal

before the first respondent Superintending Engineer on 31.8.1992. The appellate authority has also confirmed the orders passed by the second

respondent on 4.7.1992 levying a sum of Rs.40,287.00 as the compensation charges payable by the petitioner Company. The said orders are

challenged in Writ Petition No.2360 of 1993.

The further case of the petitioner is that while the appeal filed by the petitioner company before the appellate authority was pending

consideration, the third respondent Executive Engineer by proceedings dated 31.10.1992 has informed the petitioner that since the service

connection No.171-71-73 at No,27 Dr.Hegde Road, Madras-34 is being used as a transit-house i.e. for non-domestic purpose, it is billed under

the tariff-IX. The petitioner company was also directed to pay the fourth instalment amount of Rs.10,070 on or before 30.10.1992. Aggrieved by

the said classification, the petitioner Company has filed writ petition No.20820 of 1993.

Learned counsel for the petitioner contended that the charges in respect of the flat in question have been paid by the petitioner under the

category of Tariff 1 namely domestic purpose since 1989. While so, the respondents are estopped from changing the tariff itself to non-domestic

purpose merely because the said flat is used to accommodate the officers who are coming on tour in respect of the petitioner company. Learned

counsel for the: petitioner has also argued that the respondents have failed to consider the material issue i.e. the transit flat, is used only for the

residential purpose of accommodating the officers of the petitioner company and the petitioner company is not doing any other activities in the

nature of commercial purpose. Learned counsel for the petitioner has further argued that the respondents have no power to change the Tariff 1 to

Tariff 9 and it is not contemplated under the terms'' and conditions and also under the Electricity Supply Act. In the circumstances learned counsel

for the petitioner has argued that the change of tariff is nothing but exercising arbitrary power by the respondents. To substantiate his contention

learned counsel for the petitioner has relied upon the decision of this court in R.Raju v. The Government of, Tamil Nadu and another, 1999 (2)

L.W. 15 and the decision of the Supreme Court in New Delhi Municipal Council v. Sohan Lal Sachdev 9DO Rep. By Mrs. Harinder Sachdev,

2000 (2) Supreme 141.

The respondents have filed a counter. In the counter it is stated that the flat in question is used as transit house for the petitioner''s company. It

clearly proves that the, flat is used for non-domestic purpose. As per the terms and conditions of Supply of Electricity, under Clauses 2 and 5, if

any consumer uses electricity for a tariff other than that for which supply is given it amounts to violation of tariff. Hence the petitioner herein has,

committed violation against the said terms and conditions of Supply for which the petitioner is liable to pay compensation charges, demanded by

the respondents. More so, the Department is entitled to change the tariff from tariff 1 to tariff 9.

In R.Raju''s case, 1992 (2) L.W. 15 this Court has observed as follows:

The point to be decided in this writ petition is whether the respondents are entitled to claim electricity consumption charges under Tariff VIII when

the premises in question were used by the undertakings of the Government of India viz., the Neyveli Lignite Corporation and Bharath Petroleum

Corporation. According to the petitioner, the flats/premises in question were leased out to Neyveli Lignite Corporation as well as the Bharath

Petroleum Corporation for occupation of their staff as and when they visit Kodaikanal. It is also the definite case of the petitioner that those

premises flats were used only for residential purposes. It is also specifically stated that there is no mess, canteen or any office is run by the said

tenants viz. Neyveli Lignite Corporation and Bharath Petroleum Corporation. It is :seen from the letter from the Superintending Engineer, Anna

Electricity Distribution Circle, Dindigul addressed to the petitioner, it is mentioned ""the Service No.163 W 166 W. Kodaikanal standing in your

name were inspected by Anti Power Theft Squad, Madurai on 27.4.1988. During inspection, it was found that there was no bona fide activity in

the above premises and they were used as Rest House for the employees of the Neyveli Lignite Corporation and Bharath Petroleum Corporation

on tour. As such the appropriate Tariff applicable is only Tariff VIII and therefore, the necessary compensation charges had to be levied ..."" The

above factual position supports the case of the petitioner that the said premises were let out only to the Neyveli Lignite Corporation and Bharath

Petroleum Corporation for their use whenever they come to Kodaikanal. In other words, even after inspection, the only activity as found by

themselves was letting out to the two Government of India Undertakings. It is not the case of the respondents that other domestic activities are

being engaged in the; said premises. It is also not their case that any mess, canteen or any office is being run by the said tenants.

In this regard, it is useful to mention the relevant fault applicable to the petitioner''s premises, it is clear from the letter No,728/

Administration.Br,/ Tariff-I (2)/86-1 dated 24.12.1986. The said letter relates to revision of Tariff effective from 1.1.1987. Part B deals with Low

Tension Supply. Low Tension Tariff-1 refers to Domestic purposes for lights and fans including radios and power loads 55 paise per KWH.

Minimum monthly current consumption charges-Rs.,4 per service. Tariff II to VII refers to various other categories. By pointing out Low Tension

Tariff VIII, the learned counsel appearing for the respondent contended that in the light of the activities being carried out in the premises in

question, they are entitled to charge under Tariff VIII. Tariff VIII speaks about, all categories of consumers not covered under Low Tension Tariff

I, II, III, IV, V, VI and VII. In the light of the submission made by the learned counsel for the respondents, I have carefully perused the various

clauses in the letter referred to above. Admittedly ""Rest House or Guest House has not been included in any one of the Tariff mentioned in that

letter. Taking note of the fact that there is no such specific reference in any one of the clauses, as contended, the respondents are not justified in

claiming charges under Tariff VIII.

Relying upon the above decision of this court, learned counsel for the petitioner has argued that the flat in question is used only as a transit house

for the residential purpose for the officers of the petitioner Company. He has further argued that as held by the learned single Judge in the above

decision, the authorities have no power to change the tariff 1 to tariff 9. He has further argued that proper tariff could be tariff 1 and not 9.

In Sohan Lal Sachdev''s Case, 2000 (2) Supreme 141, the Supreme Court at paragraphs 11 to 13 has observed as follows:

The two terms ''domestic'' and ''commercial'' are riot defined in the Act or the rules. Therefore, the expression''s are to be given common parlance

meaning and must be understood in their natural, ordinary and popular sense. In interpreting the phrases the context in which they are used is also

to be kept in mind. In Stroud''s Judicial Dictionary (Fifth Edition) the term ''commercial'' is defined as ""traffic, trade or merchandise in buying and

selling of goods."" In the said dictionary the phrase ''domestic purpose'' is stated to mean use for personal residential purposes. In essence the

question is, what is the character of the purpose of user of the premises by the owner or landlord and not the character of the place of user. For

example, running a boarding- house is a business, but persons in a boarding-house may use water for ''domestic'' purposes. As noted earlier the

classification made for the purpose of charging electricity duty by the NDMC sets out the categories ""domestic"" user as contra-distinguished from

commercial"" user or to put it differently ""non domestic user''. The intent and purpose of the classification as we see it, is to make a distinction

between purely ""private residential purpose'' as against ""commercial purpose"". In the case of a ''guest house'', the building is used for providing

accommodation to ""guests'' who may bvelers, passengers, or such persons who may use the premises temporarily for the purpose of their stay on

payment of the charges. The use for which the building is put by the keeper of the guest house, in the context cannot be said to be for purely

residential purpose. Then the question is, can the use of the premises be said to be for ""commercial purpose''? Keeping in mind the context in

which the phrases are used and the purpose for which the classification is made, it is our considered view that the question must be answered in the

affirmative. It is the user of the premises by the owner (not necessarily absolute owner) which is relevant for determination of the question and not

the purpose for which the guest or occupant of the guest house uses electric energy. In the broad classification as is made in the rules, different

types of user which can reasonably be grouped together for the purpose of understanding the two phrases ''domestic'' and ""commercial"" is to be

made. To a certain degree there might be overlapping, but that has to be accepted in the context of things. The High Court was not right in setting

aside the order of the learned senior Civil Judge merely on the ground that the use of electricity for running the ''guest house'' does not come under

the category of ""commercial use"". The High Court has not discussed any reason for holding that user in such a case comes under the category of

''domestic'' use.

In the case of Municipal Corporation of Greater Bombay Vs. Mafatlal Industries and others, etc., this Court interpreted the expression

exclusively used as a private residential premises"". (In Bombay Electricity Duty Act, 1958). To connote that the premises in question must be

exclusively used as a residential premises which in other words would mean where the premises which is used by any person privately for his own

residence for a sufficient continued period and not a premises where a person can come and spend a day or a night and then go back. This Court

further held that guest houses are maintained by company or commercial undertakings as a part of its commercial venture. The test of profit making

as well as the test of the work ''private'' in contradiction to public'' have no relevance for interpreting the expression ""exclusively used as a private

residential premises"". This Court concluded that in the case of a guest house category ""R"" which applies to premises used as a private residential

premises is not applicable and category ''C'' would apply as a residuary category to premises which does not come within the categories R, S,

RC(LV) and SL. Though the fact situation in the case and the question which was considered by this Court therein are not the same as in the case

on hand, the discussions in the judgment throw light on the controversy raised in this case.

... The New Delhi Municipal Council is entitled to charge for use of electricity in Sachdeva Guest House at the rate applicable to ""commercial

use.

In the above decision, the Apex Court has emphasised that it is the user of the premises by the owner not necessarily the absolute owner which

is relevant for determination of the question and not the purpose of which the guest or occupant of the guest house uses electric energy. The Apex

Court further observed that guest houses are maintained by company or commercial undertakings as a part of its commercial venture. In the case

on hand, it is not in dispute that the owner is not residing in the premises and the petitioner company is using the premises for the purpose of

providing accommodation to the office staff and officers who visit Madras on duty relating to the petitioner''s Company, Hence as observed by the

Supreme Court in the abovesaid decision, it has to be held that the premises in question is used for commercial purpose and not for residential

purpose. Hence the respondents have every right to classify the premises in question under tariff IX and the petitioner is liable to pay the

compensation charges as demanded by the respondents. I see no reason to interfere with the impugned orders passed by the respondents in both

the writ petitions. The writ petitions are dismissed. No costs. Consequently W.M.P.Nos.3742 and 32577 of 1993 are dismissed.