RAKESH SON OF MANGALLAL vs SUBODH & OTHERS

Demand of Rs.8,30,208/- vide demand letter dated 26.11.2010, discontinuance of electricity to the premises of the petitioner and contemplated action under Section 126 of the Electricity Act, 2003 (for brevity ''2003 Act''), has led the petitioner file this petition challenging the impugned action.

Petitioner is a workshop for the mechanical repairs and maintenance of equipments, registered under Small Scale Undertaking with the Directorate of Industries, Government of M.P. Permanent Registration Certificate dated 1.5.1992 is filed as Annexure A/1.

The Unit, as averred, mostly deals with the repairs and maintenance of equipments of Companies like MPEB, Coal Mines, Paper Mills etc. and is fitted with a three phase electric connection of sanctioned load 50 HP (i.e. 37.5 KW) with an electric metre to record the electricity consumed. The premises is also fitted with maximum demand metre to register maximum load. It is the contention of the petitioner that at no point of time, the maximum load has exceeded 20 KW and remained below sanctioned load of 37.5 KW (50 HP). It is also stated that having faced with irregular electricity supply, the petitioner has installed DG set (generator set) of 63 KWA. It is also borne out that total connected load of 178 HP was found in the premises.

That, on 10.11.2010, a Vigilance team of respondent No.2 visited the business premises of the petitioner, prepared a Panchnama showing the load of 173 HP. A bill was raised on 26.11.2010 for Rs.8,30,208/-. It is urged that the premises was inspected behind the back of petitioner who had gone to Kolkata. It is contended that the Panchnama (Annexure P/3) does not reflect the true and correct position and the petitioner specifically disputes this document. The stand by machine lying in the workshop and not connected to the mains have been wrongly shown to be connected to the mains i.e. one spare welding machine mainly used in the site of consumers and the compressure which is used only for cleaning which was connected to the Gen-set and not to the mains. It is contended that calculation of load is faulty and is too excessive. Prior to this inspection, it is urged that there was earlier inspections on 17.4.2004 and 26.10.2005 the Panchnamas of which are being filed as Annexure P/11 and P/12 respectively. In both these panchnamas, the load/wattage of the very same machine were assessed is to much less well within the contract demand i.e. only 49.5 HP. Even portable tools like grinder, cutter etc which were not connected have been shown to be connected to the mains. Normally, regular office light, fans etc are not counted for determining the load factor which have been added in the panchnamas.

It is further contended that the revised statement dated 6.12.2010 was served only when the return was filed. It is also urged that the demand in lieu of excess connected load is without any basis. As the Authorities at different inspections have been assessing the same machines for different load including unconnected machines lying for repairs. To bring home the submissions about different assessment, the petitioner has brought on record a chart showing that the different standard yardstick has been adhered to.

It is also the contention of petitioner that being governed by LV-4, 1b-i Industrial Demand Based Tariff 25-75 HP supply, unless it is established that the petitioner at any point of time, has exceeded the maximum demand, the respondents are not justified in raising the additional demand. It is averred that as the present is not a case of unauthorized use of electricity, as the petitioner''s requirement throughout had remained 20 KW i.e. below the sanctioned load of 37.5 KW as would attract any action under Section 126 of 2003 Act. It is urged that a penal action under Section 126 is attracted only when there is unauthorized use of electricity by any artificial means, or by a means not authorized by the concerned person or authority or licensee or through a tempered meter, or for uses other than usages for which it is authorized, or for the premises or areas other than those for which the supply of electricity was authorized. For these reasons, petitioner seeks quashment of action of respondent.

Respondents have filed the return. Besides raising objection as to the maintainability of petition, respondents while not denying that the petitioner is an LT (Low Tension) Consumer with sanction load of 50 HP, submits that on an inspection carried out on 10.11.2010 of the premises, it was found that the petitioner had total connected load of 178 HP to its connection. It is further contended that the petitioner being in Tariff Category LV-4 1B, Industrial Demand Based Tariff 15-75 HP, was authorized to have connected load of 100 HP; however, as the Panchnama dated 10.11.2010, total connected load of 178 HP was found for which the petitioner was not authorized as per Tariff order LV-4.1b. And, since for connected load more than 100 HP, the consumer comes within category 4.1B(ii) or 4.1C, petitioner was found of unauthorized use of electricity; therefore, has been called upon to pay Rs.8,19,315/- vide revised assessment order-dated 6.12.2010.

Pertinent it is to note that the respondents in paragraph 5.5 of the return, have admitted a vital fact that maximum contract demand never exceeded the sanctioned contract demand, which is in the following terms :

5.5 ... It may be correct that the maximum contract demand never exceeded the sanctioned contract demand ...

It is, however, contended that the Tariff Schedule is not only based on demand but also based on connected load.

Considered the rival submissions.

The preliminary submission that the petitioner has an alternative remedy under Section 127 of 2003 Act is taken up first. It is contended on behalf of the respondents that as the petition is directed against the assessment of unauthorized use of electricity under the provisions of Section 126 of 2003 Act, the petitioner has a remedy under Section 127 and a writ petition under Article 226 of the Constitution is not tenable. Reliance is placed on the decision in Executive Engineer, Southern Electricity Supply Company of Orissa Ltd. vs Sri Seetaram Rice Mill (2012) 2 SCC 108 to substantiate the submissions.

Petitioner, on his turn, has refuted the contention. It is urged that unless there is an unauthorized use of electricity by any artificial means, or by a means not authorized by the concerned person or authority or licensee, or through a tampered meter, or for uses other than usages for which it is authorized, or for the premises or areas other than those for which the supply of electricity was authorized, it cannot be said that there is unauthorized usage of electricity as would attract provisions of Section 126 of 2003 Act. It is contended that it is the propriety of the respondents in raising the demand, despite admitting the fact that the maximum contract demand never exceeded the sanctioned contract demand, which is being questioned on the ground that, it is beyond the jurisdiction of the Authority concerned to have raised the demand. It is urged that as the very jurisdiction of the Authority is being questioned, the petitioner has a right to maintain the petition. Petitioner also places the reliance on the decision in Sri Seetaram Rice Mill (supra) to substantiate the submissions.

In Sri Seetaram Rice Mill (supra), the Supreme Court was concerned with the following issues :-

"12. 1. Wherever the consumer consumes electricity in excess of the maximum of the contracted load, would the provisions of Section 126 of the 2003 Act be attracted on its true scope and interpretation ?

Whether the High Court, in the facts and circumstances of the case, was justified in interfering with the provisional order of assessment/show cause notice dated 25th July, 2009, in exercise of its jurisdiction under Article 226 of the Constitution of India ?

Was the writ petition before the High Court under Article 226 of the Constitution of India not maintainable because of a statutory alternative remedy being available under Section 127 of the 2003 Act?

These issues cropped up in the factual background, which find mention in paragraph 7 of the said judgment :-

It is the case of the respondent that no intimation was given to it as to finding of defects if any, in dump. On 25th July, 2009, provisional assessment order bearing No. 854 was issued by the appellants to the respondent. Intimation bearing No. 853 had also been issued on the same day which informed the respondent that there was unauthorized use of electricity falling squarely within the ambit of provisions of Section 126 of the 2003 Act. In the dump report dated 10th June, 2009, it was stated that there was unauthorized use of electricity and Maximum (hereinafter MD) had been consumed up to 142 KVA. On this basis, the appellant passed the order of provisional assessment by taking the contracted demand as that applicable to large industry. The demand was raised, assessing the consumer for the period from June 2008 to August 2009 for a sum of Rs.7,77,300/-. This was computed for 15 months at the rate of Rs. 200 per KVA (i.e., tariff for large industry) multiplied by two times, aggregating to the claimed amount. Vide the provisional assessment order dated 25th July, 2009, assessment was made under Section 126(1) of the 2003 Act for unauthorized use of electricity, the respondent was required to file objections, if any, and to also pay the amount.

Evidently, in Sri Seetaram Rice Mill (supra), there was unauthorized use of electricity and maximum demand had been consumed up to 140 kVA against the contracted demand of 99 kVA and above but below 110 kVA. Dwelling on the issues, it has been held by their Lordships :

Having dealt with and answered determinatively the questions framed in the judgment, we consider it necessary to precisely record the conclusions of our judgment which are as follows :-

Wherever the consumer commits the breach of the terms of the Agreement, Regulations and the provisions of the Act by consuming electricity in excess of the sanctioned and connected load, such consumer would be ''in blame and under liability'' within the ambit and scope of Section 126 of the 2003 Act.

The expression ''unauthorized use of electricity means'' as appearing in Section 126 of the 2003 Act is an expression of wider connotation and has to be construed purposively in contrast to contextual interpretation while keeping in mind the object and purpose of the Act. The cases of excess load consumption than the connected load inter alia would fall under Explanation (b)(iv) to Section 126 of the 2003 Act, besides it being in violation of Regulations 82 and 106 of the Regulations and terms of the Agreement.

In view of the language of Section 127 of the 2003 Act, only a final order of assessment passed under Section 126(3) is an order appealable under Section 127 and a notice-cum- provisional assessment made under Section 126(2) is not appealable.

Thus, the High Court should normally decline to interfere in a final order of assessment passed by the assessing officer in terms of Section 126(3) of the 2003 Act in exercise of its jurisdiction under Article 226 of the Constitution of India.

The High Court did not commit any error of jurisdiction in entertaining the writ petition against the order raising a jurisdictional challenge to the notice/provisional assessment order dated 25th July, 2009. However, the High Court transgressed its jurisdictional limitations while travelling into the exclusive domain of the Assessing Officer relating to passing of an order of assessment and determining factual controversy of the case.

The High Court having dealt with the jurisdictional issue, the appropriate course of action would have been to remand the matter to the Assessing Authority by directing the consumer to file his objections, if any, as contemplated under Section 126(3) and require the Authority to pass a final order of assessment as contemplated under Section 126(5) of the 2003 Act in accordance with law.

In the case at hand, there is an admission by the respondents that the maximum contract demand never exceeded the sanctioned contract demand. This admission answers the preliminary objection raised on behalf of the respondents that, it is the propriety i.e. jurisdiction of the Authority concerned in raising the demand, which is being questioned, thus as per verdict in Sri Seetaram Rice Mill (supra) as contained in paragraph 87.5, the present petition is tenable. Consequently, the preliminary objection as to maintainability is overruled.

Next question is whether the respondents are justified in raising the demand. It is not disputed that the petitioner is an LT consumer, bearing Service No.92-01-9285027 with sanction load of 50 HP. It is also not disputed by the respondents that a Maximum Demand Metre to register maximum load is fitted in the petitioner''s premises. There is no denial of the fact, rather there is an admission that, at no point of time that maximum load remained below sanctioned load. Neither is there denial of fact that the petitioner to meet out the difficulty faced with irregular electric supply has installed DG Set (generator set) of 63 KVA. It is also no in dispute that the petitioner''s Tariff Category is LV-4, 1b-i Industrial Based Tariff 25-75 HP.

Tariff Schedule - LV-4 for LT Consumers for the year 2010-2011 is brought on record as Annexure R/3, which is reproduced for ready reference :

Tariff Schedule - LV-4 LT INDUSTRIAL Applicability :

Tariff LV-4 is applicable to light, fan and power for operating equipment used by printing press and any other industrial establishments and workshops (where any processing or manufacturing takes place including tyre re-treading). These tariffs are also applicable to cold storage, gur (jaggery) making machines, flour mills, Masala Chakkies, hullers, khandsari units, ginning and pressing units, sugar cane crushers (including sugar cane juicing machine), power looms, dal mills, besan mills, and ice factories and any other manufacturing or processing units (excluding bottling plant) producing/processing food items or processing agriculture produce for preservation/increasing its shelf life and Dairy units (where milk is processed other than chilling, pasteurization etc to produce other end products of milk).

Tariff: For Non seasonal and seasonal consumers:

Category of consumers Monthly Fixed Charges (in Rs.)Urban Rural Areas Entry Charges (paise per units)- Urban/ Rural Area

4.1 on seasonal consumers HP HP

4.1 b (i) Demand based tariff (Contract demand and connected load up to 100HP) 180 per kW or 75. per kW or 144 per kVA 60 per kVA of of billing billing demand 455 demand

4.1 b (ii) Demand based tariff (Contract demand up to 100 HP and connected load more than 100 HP but not exceeding 150 HP) 250 per kW or 175 per kW or 200 per kVA 140 per kVA of billing demand /td> 455 of billing demand

4.1 c Demand based tariff 250 per kW or 175 per kW or 455

(Contract than 100 HP & 200 per kVA 140 per kVA up to 150 HP with of billing of billing connected load not demand demand exceeding 150HP*) (For existing consumers only) 4.1 d Temporary connection 1.3 times of the applicable tariff * In addition, these consumers are also liable to pay transformation less @ 3% and transformer rent as per the MPERC (Recovery of expenses and other charges for providing electric line or plant for the purpose of giving supply) Regulations (Revision-I), 2009.

Petitioner claims that he falls in Tariff Category LV-4.1 b(i) which stipulates Demand based Tariff (Contract demand and connected load up to 100 HP). The petitioner had the sanctioned load of 50 HP. But, on an inspection, it was found that the connected load was 178 HP. The explanation tendered by the petitioner that the excess load is connected with the DG Set (generator set). However, it could not be established from the Panchnama that the load to DG Set (generator set) was separately connected. Panchnama clearly records "VERNACULAR MATTER OMITTED". As the connected load was found exceeding even 100 HP, Tariff category 4.1b(ii) gets attracted. As the Tariff Schedule, as rightly pointed out on behalf of the respondents, is not only based on demand but is also based on connected load, contention by the petitioner that once the category is fixed under the Tariff Schedule, the same cannot be varied cannot be accepted. Though a dispute is raised on the authenticity of the quantification of the connected load on the basis of comparative chart filed by the petitioner as Annexure P/12. It is, however, noted from the comparative chart prepared by the petitioner of the year 2004 (as on 17.4.2004), 2005 (as on 26.10.2005) and 2010 (as on 10.11.2010) that, 1 welding machine, 1 Compressor, 1 lathe, 1 Drill, 3 Grinders, 1 cutter, lighting load, computer and heater are found in excess in 2010 (as on 10.11.2010) in comparison to the connected load of the year 2004 and 2005. Since the Tariff is not only demand based but also load connected based. In absence of cogent material that the excess load is connected to DG set (generator set), the petitioner cannot escape the liability to pay the tariff as per demand raised. Contention that the petitioner was not present in the premises that the inspection proceedings get vitiated, must fail for the reason that the inspection was carried out in presence of Nilesh Baid, the present petitioner.

In view whereof, while setting aside the decision to initiate action to prosecute the petitioner for unauthorized consumption of electricity, the demand raised qua the excess load connected cannot be faulted with.

Consequently, petition is partly allowed in above terms. Interim order stands vacated. Parties to bear their respective costs.