Gujarat High Court
Dakshin Gujarat Vij Company Limited vs Essar Steel India Limited & on 17 July, 2015
Author: M.R.Shah
Bench: M.R. Shah, A.G.Uraizee
C/LPA/465/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 465 of 2015
In SPECIAL CIVIL APPLICATION NO. 2859 of 2014
With
LETTERS PATENT APPEAL NO. 466 of 2015
In SPECIAL CIVIL APPLICATION NO. 5494 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/-
and
HONOURABLE MR.JUSTICE A.G.URAIZEE Sd/-
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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DAKSHIN GUJARAT VIJ COMPANY LIMITED....Appellant(s)
Versus
ESSAR STEEL INDIA LIMITED & 1....Respondent(s)
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APPEARANCE :
LPA Nos.465 of 2015 :
MR MIHIR THAKORE, SENIOR ADVOCATE with
MS LILU K BHAYA, ADVOCATE for the Appellant
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MR MIHIR JOSHI, SENIOR ADVOCATE with
MR NISARG DESAI for NANAVATI ASSOCIATES, CAVEATOR for the
Respondent No. 1
RULE SERVED for the Respondent No. 2
LPA Nos.466 of 2015 :
MR MIHIR THAKORE, SENIOR ADVOCATE with
MS LILU K BHAYA, ADVOCATE for the Appellant No. 1
MR SN SHELAT, SENIOR ADVOCATE with
MR NISARG DESAI for NANAVATI ASSOCIATES, CAVEATOR for the
Respondent No. 1
RULE SERVED for the Respondent No. 2
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
Date : 17/07/2015
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.00. As common question of law and facts arise in both these Letters Patent Appeals and as such they arise out of the impugned common judgement and order passed by the learned Single Judge dated 22/1/2015 passed in Special Civil Application Nos.2859 and 5494 of 2014, both these appeals are decided and disposed of together by this common judgement and order.
2.00. Feeling aggrieved and dissatisfied with the impugned judgement and order passed by the learned Single Judge dated 22/1/2015 passed in Special Civil Application No. Page 2 of 51 HC-NIC Page 2 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT 2859 of 2014, by which the learned Single Judge has dismissed the said Special Civil Application preferred the Appellant herein - by Dakshin Gujarat Vij Company Limited - original petitioner (hereinafter referred to "the DGVCL" for short), by confirming the order passed by the appellate authority dated 1/11/2013 by which the learned appellate authority directed the DGVCL to refund the excess amount paid by Essar Steel India Limited - respondent herein (hereinafter referred to as "ESIL" for convenience) pursuant to the revised supplementary bills over and above the quantity of unauthorized power used by the consumer - Company - ESIL, appellant herein - original petitioner - DGVCL has preferred the present Letters Patent Appeal No. 465 of 2015.
2.01. Feeling aggrieved and dissatisfied with the impugned common judgement and order passed by the learned Single Judge dated 22/1/2015 passed in Special Civil Application No. 5494 of 2014, by which the learned Single Judge has partly allowed the said Special Civil Application preferred by the Company - ESIL and has quashed and set aside the finding of the appellate authority in the order dated 1/11/2013 that the unauthorized use of the power of the Company was to the extent of 25.23 MU and thereafter remanding the matter to the appellate authority for fresh decision on the aforesaid point, after hearing the parties on the limited issue as to, whether the unauthorized use of the power by the Company was to the extent of 25.23 MU or 6.63 MU, appellant herein - original respondent in the said petition has preferred the present Letters Patent Appeal No. 466 of 2015.
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3.00. Facts leading to both these Letters Patent Appeals, in nutshell, are as under :-
3.01. That the appellant herein - original petitioner of Special Civil Application No.2859 of 2014 is an electricity supply Company incorporated, and registered under the provisions of the Companies Act, 1956 having in the business of distribution of electricity in the Southern region of the State of Gujarat, under the Electricity Act, 2003 (hereinafter referred to as "the Act" for convenience). It is a distribution licensee under the provisions of the Act.
3.02. That original respondent - Essar Steel India Limited (ESIL), a Company registered under the Companies Act, 1956, is engaged in the business of manufacturing steel and allied steel products. It has set up its factory at Hazira.
3.03. ESIL had set up a plant for the manufacture of Hot Rolled Steel Coils in the year 1990-91. Subsequently, a power plant of 515 MW capacity was set up by Essar Power Limited, a group company of ESIL. The said power plant commenced operations in the year 1995. Essar Power Limited agreed to supply 300 MW power to the erstwhile Gujarat Electricity Board under a Power Purchase Agreement dated 30/5/1996. The rest of 215 MW of power was to be supplied to ESIL for its captive use. In the year 2005, another group company of ESIL, viz.
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Bhander Power Limited, also set up an additional Captive Power Plant of 505 MW capacity to cater to its captive needs. In addition to the plant of Bhander Power Limited, ESIL has its Captive Power Plant of 35 MW within the same complex. For the distribution of the afore-mentioned 505 MW and 515 MW capacity of power, ESIL and its group companies have set up a Sub-Station, including a Bus-Bar, within its premises. DGVCL raised a dispute in the year 2006, for the payment of wheeling charges, on the ground that the Bus Bar vested in Gujarat Energy Transmission Corporation (GETCO, for short) by virtue of the fact that electricity flowed from one end of the Bus-Bar to another. ESIL filed a writ petition before this Court, being Special Civil Application No.13886 of 2006. By judgment dated 15/1/2007, this Court held that Bus-Bars are an integral part of the distribution system of GETCO, therefore, wheeling charges are payable by ESIL to DGVCL. Being aggrieved by the aforesaid judgment, ESIL preferred an appeal before the Division Bench of this Court, by filing Letters Patent Appeal No.254 of 2007, which came to be dismissed by judgment dated 30/8/2011. ESIL approached the Supreme Court against the judgment of the Division Bench, by filing Special Leave Petition (Civil) Nos.27540 of 2011 and 28099 of 2011, wherein the Supreme Court has granted an order of status-quo, and the matter is pending for final decision.
3.04. Subsequently, ESIL decided to increase the manufacturing capacity of the steel plant on account of the growing demand for steel and allied products. Accordingly, ESIL and its group companies set up four additional units, Page 5 of 51 HC-NIC Page 5 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT namely (i) Essar Steel (Hazira) Limited (ESHL), (ii) Hazira Plate Limited (HPL), (iii) Hazira Pipe Mill Limited (HPML) and (iv) Essar Steel Orissa Limited (ESOL). The first three units were established within the same complex, adjacent to the main manufacturing facility and the fourth unit was established in the State of Odisha.
3.05. Pending the hearing and final disposal of the Letters Patent Appeals, ESIL wanted to resolve the issue of wheeling of power from Bhander Power to Essar Steel, and for the said purpose, wanted to shift the Ichchhapor-Sachin Line. Power is also received by ESIL, as a consumer, from the distribution Licencee-DGVCL. It was felt necessary that, in view of the claim of GETCO for transmission charges and looking to the nature of the distribution of electrical energy and consumption of power by units of the Essar Group from the power plants situated within the complex through the common integrated line/Bus Bar, and to ensure that no power supplied by DGVCL, or any power incidentally flowing through the Bus-Bar on account of it being connected to the Sub-Stations of the distribution/transmission Licencees at both ends, should be consumed by any entity other than ESIL, a consumer of UGVCL, an appropriate resolution of the above issues ought to be worked out.
3.06. A meeting was, therefore, held at Gandhinagar, under the Chairmanship of Mr.D.J.Pandian, Principal Secretary, Energy & Petro Chemicals Department, on 1/2/2010, to resolve the issues raised by the Essar Group. The said meeting was Page 6 of 51 HC-NIC Page 6 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT attended by the Managing Director of Gujarat Urja Vikas Nigam Limited (GUVNL, for short), Executive Director (Finance) of GUVNL, Managing Director of GETCO, Chief Electrical Inspector and representatives of the Essar Group and Bhander Power Limited, to discuss the issue of the shifting of the Ichchhapor line and supply of power to the Essar Group companies from Bhander Power Limited. GUVNL is the holding company of GETCO and DGVCL. After discussions on the issue of ensuring that the supply of power to Essar Group companies would only be from the power plants located in the complex and that DGVCL power is used only by its consumer, namely, ESIL, it was suggested that an amicable solution be arrived at, within the framework of regulations. The final solution contemplated was the isolation of a section of the integrated line/Bus-Bar in such a manner that the incidental power flowing through the lines, on account of it being connected at both ends to the Sub-Stations would stop, thereby ensuring appropriate accounting and metering of the electricity consumption of the various units in the complex. Certain decisions were taken by the authorities in this regard as recorded in the Minutes of the Meeting dated 1/2/2010, principally being that all member units of the Essar Group (other than the consumer-ESIL) should become consumers of the Distribution Licencee DGVCL so that the question of a non-consumer incidentally, or inadvertently, availing of power from DGVCL would not arise. Alternatively, it was suggested that all the electrical lines supplying power to the member units are run in isolation of the integrated line/Bus-Bar and also from the DGVCL connection for the contracted demand, in order to achieve the purpose that DGVCL power is not consumed, either incidentally or inadvertently, by non-consumers in the complex.
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3.07. ESIL proposed that it would install a reverse power flow relay system to ensure that, at no point of time, DGVCL power would flow through the Bus-Bar to the member units since, in the event of a flow-back of energy from the Bus-Bar to Bhander Power Limited, the reverse power flow relay would trigger the automatic opening of the existing isolator on the line, which would stop the current from flowing into Bhander Power Limited. ESIL was directed that meters should be placed on the electrical lines which connected Bhander Power Limited with the Bus-Bar, which would record electrical energy flowing back through the Bus-Bar directly, or indirectly, to the electric lines supplying energy to the other member units of the Essar Group companies, which were not consumers of DGVCL. It was further directed that in the event that any energy was found so recorded, the power consumed would be treated as DGVCL power and would be charged at the rate of twelve times, at twice the normal rate.
3.08. Certain steps were directed to be taken by ESIL, in line with the decision of the authority, inter-alia, being that of the two electrical lines connecting Bhander Power Limited with the Bus-Bar, one line would remain connected on which the reverse power flow relay and the meter would be installed and the other line would be disconnected from the Bus-Bar and connected to the unit of Essar Steel (Hazira) Limited, which was the only other unit utilizing energy at 220 KV. The second line would terminate at Essar Steel (Hazira) Limited.
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3.09. On 30/6/2010, an event took place which has some relevance to the dispute involved in the petitions. The High Court sanctioned the Scheme of Amalgamation between Essar Steel India Limited, Essar Steel (Hazira) Limited, Hazira Plate Limited, Hazira Pipe Mill Limited and Essar Steel Orissa Limited by an order of that date. The Scheme was to be effective on the date on which the last of the necessary certified copies were filed with the Registrar of Companies of the respective States. The effective date under the Scheme was 5/8/2010.
3.10. Pursuant to the meeting dated 1/2/2010, ESIL took steps for the installation of the reverse power flow relay. There were two electrical lines connecting Bhander Power Limited to the Bus-Bar. On both these lines, four line isolators (two each) had already been installed earlier as approved by the Chief Electrical Inspector. On the first line the reverse power flow relays were installed in such a manner that in the event any power flow was detected from the Bus-Bar to Bhander Power Limited (reverse flow), it would automatically trigger the opening of the line isolators, which would forthwith stop the reverse flow of power. As far as the second line was concerned, the same was diverted from just before the existing line isolator, close to the Bus-Bar, by underpass to Essar Steel (Hazira) Limited. To ensure that there was no reverse flow from the Bus-Bar on account of the pre-existing segment of the second line after the underpass connection, the line isolator on that segment second line was kept open. The modification of Page 9 of 51 HC-NIC Page 9 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT the second line was duly approved by the Chief Electrical Inspector. In the meanwhile, meetings were held on 24/1/2011 and 27/1/2011, under the Chairmanship of Mr. D.J.Pandian, Chairman, GUVNL and Secretary, Energy and Petro Chemicals Department, which were attended by the Chief Engineer and In-charge Managing Director of DGVCL, State Load Dispatch Centre of GETCO and representatives of the Essar Group, with a view to determining the methodology of energy accounting in respect of the unit of ESIL (a consumer of DGVCL) to be implemented after the shifting of the Ichchhapor line. It was recorded that the work of shifting of the Ichchhapor line had been completed and, therefore, the metering locations would have to be changed and the metering should be such which would accurately record the actual consumption of the consumer of the Distribution Licencee, namely, ESIL, as also the energy accounting of Essar Power Limited, Bhander Power Limited and the Captive Power Plants of Essar Steel India Limited. It was decided that no transmission charges/distribution charges would now be claimed against Essar and a formula was derived for measuring the consumption of Essar Steel Limited so that the existing meters would only be utilized for the purpose of verification. It was decided that no transmission charges would be applicable on the power scheduled from Essar Power, Bhander Power Limited, and the Captive Power Plants to ESIL. Similarly, no transmission losses would be applicable for the power scheduled from Essar Power, Bhander Power Limited and Captive Power Plants to ESIL, as these losses of radial system would automatically be counted in the drawl of ESIL. Hence, the actual losses of the radial system would automatically be borne by ESIL. It was further decided that ESIL would apply to Page 10 of 51 HC-NIC Page 10 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT DGVCL for the shifting of metering locations at Ichchhapor- Sachin lines for deriving the consumption of power by ESIL, as per the above formula.
3.11. Essar addressed a letter dated 21/5/2011 to GETCO, stating that the Scheme of Amalgamation had been sanctioned by the High Court and has become effective from 5/8/2010, therefore, the units/companies covered under the Scheme, inter-alia, being Essar Steel (Hazira) Limited had merged into Essar Steel India Limited which was an existing consumer of DGVCL and, therefore, the contract demand of Essar Steel India Limited would automatically cover the supply to the units of the merged entities and the reverse power flow relay should be removed. According to Essar, there is no company having its units within the complex which is not covered under the Scheme of Amalgamation.
3.12. By reason of the merger, the power requirement of Essar Steel India Limited increased; therefore, it applied to DGVCL on 1/6/2011, for the increase in the contract demand from 44.5 MVA to 60 MVA.
3.13. On 4/6/2011, GETCO informed ESIL that the details of the amalgamation should be submitted to DGVCL for confirmation, and after the factum of amalgamation was verified, and after personal inspection at the site in order to ensure that the power of DGVCL was not being utilized by Page 11 of 51 HC-NIC Page 11 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT other units not covered under the amalgamation, the reverse power flow relay could be removed by GETCO. By a communication of the same date, GETCO directed DGVCL to take steps for the removal of the reverse power flow relay.
3.14. Essar addressed a letter to DGVCL for the removal of the reverse power flow relay on an urgent basis, stating that there was a problem of frequent line tripping and low utilization of the additional power of 200 MW purchased from GUVNL, by an Agreement dated 13/5/2011, under open access.
3.15. In response to the application made by Essar for increase in the contract demand on 9/6/2011, DGVCL directed ESIL to get the power boundary approved. Accordingly, on 15/6/2011, Essar made an application seeking the extension of the power boundary of ESIL, so as to include within it, the units of the companies which had merged with ESIL and the unit of Essar Heavy Engineering Services Limited, as a single consumer of DGVCL.
3.16. On 21/6/2011, DGVCL addressed a letter to ESIL stating that the documents submitted along with the application dated 15/6/2011, for the extension of the power boundary, were not complete and all relevant documents be submitted in order to process the application. On 27/6/2011 and 1/7/2011, ESIL addressed letters to DGVCL, submitting further documents and details and seeking sanction/approval Page 12 of 51 HC-NIC Page 12 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT for the removal of the underpass arrangement and the final proposed arrangement for restoration of the earlier position and connections regarding the main receiving Sub-Stations.
3.17. On 21/6/2011, the officers of DGVCL and GETCO conducted an inspection of the premises of ESIL in the presence of its officers and found that DGVCL power was being taken to the units of the companies which had merged with ESIL vide the order dated 30/6/2010, and the unit of Essar Heavy Services Limited through the grid, although the said units were not the consumers of DGVCL. It was also found by DGVCL that the Bhander Power Limited end of the Tie Line-2 had been disconnected, indicating that no power from Bhander Power Limited was being utilized by such units and only DGVCL power was being utilized. On retrieval of the MRI data of the apex meter, DGVCL was able to determine that DGVCL power was being utilized with effect from 17:00 hours on 15/6/2011 upto 21/7/2011.
3.18. DGVCL, therefore, issued a notice dated 26/7/2011, to ESIL, inter-alia, pointing out the aforesaid facts and stating that this action of ESIL amounted to a clear breach of the Agreement as recorded in the Minutes of Meeting held on 1/2/2010. ESIL was asked to clarify, within seven days, why the quantum of power imported from the grid should not be charged at the rate of twelve times the quantity found to have been utilized, at twice the normal rate (HTP-1) of DGVCL. It further asked ESIL to immediately restore the original position Page 13 of 51 HC-NIC Page 13 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT of Tie Line-2 as existing prior to 15/6/2011. In response to the said notice, Essar addressed a letter dated 29/7/2011, contending, inter-alia, that as informed earlier, on account of the additional load on the lines due to supply and consumption of additional 200 MW of power from GUVNL under open access, it was facing frequent tripping of lines which caused black out and damage to the plant and, therefore, there was an urgent need to remove the reverse power relay. It was further contended that the closing of the line isolator did not result in any power supplied by DGVCL to flow to units which did not stand merged with ESIL, therefore, there was no breach of any condition of the Minutes of the Meeting dated 1/2/2010, and the demand made by DGVCL was not justified. However, Essar agreed to restore the original position prevailing prior to 15/6/2011, and also requested DGVCL to expedite the decision on the application for the extension of the power boundary already made by it. The original position was duly restored by Essar and recorded vide e-mail dated 30/7/2011.
3.19. ESIL made another representation to DGVCL on 8/9/2011, contending that after the merger of the other companies whose units were within the complex, their identities were lost and they had ceased to exist for all purposes with effect from 5/8/2010. After the merger, the power required by these units is actually the power required by ESIL only, which is a consumer of DGVCL. There was, therefore, no question of any breach of the conditions of the Minutes of the Meeting dated 1/2/2010.
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3.20. Pursuant to the notice of DGVCL and the reply of ESIL referred to above, a decision came to be taken by DGVCL, rejecting the contentions raised by ESIL and assessing the energy charges at Rs.2311,02,43,968/- for 202,09,92,000 KWH (168416000 KWH or 168.42 MV, as recorded in the meter into twelve) at twice the rate, as per the Minutes of the Meeting dated 1/2/2010, in respect of the period between 15/6/2011 to 30/7/2011.
3.21. Representations were made by ESIL to various authorities, including DGVCL, against what it considered as an exorbitant and unjustified demand by DGVCL. Pursuant thereto, the Government of Gujarat constituted a Committee consisting of three members, (i) the Managing Director of GETCO, (ii) the Chief Electrical Inspector and (iii) a Senior Technical Officer, to examine the entire issue having regard to the prevailing provisions of law; Minutes of Meeting and the effect of the amalgamation order of the High Court; to suggest a fair solution to the dispute. On 19/10/2011, ESIL wrote to DGVCL requesting that the demand under the Supplementary Bills should be kept in abeyance pending the resolution of the dispute. On 25/10/2011, in response to the above letter of ESIL, DGVCL stated that it was not possible to keep the Supplementary Bills in abeyance, or even to process the application for extension of the power boundary, until the amount of the supplementary bills is paid.
3.22. The Committee constituted by the Government of Gujarat gave its report on 13/12/2011, holding, inter-alia, that Page 15 of 51 HC-NIC Page 15 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT ESIL had taken unilateral action in changing the electrical connection and that ESIL contention that after the shifting of the Ichchhapor line, the Minutes of the Meeting dated 1/2/2010 would not be operative and the reverse power flow restriction would stand removed was not acceptable and the Minutes of the Meeting dated 1/2/2010 would stand. It was further held that the total energy of 168.416 MU on the second electric line would include power from the power plants and open access and, therefore, could not be stated to be DGVCL power. However, the Committee concluded that there was no theft of energy but a unilateral action was taken by ESIL to overrule the reverse power relay restriction and the whole matter of the supplementary bills rested on the fact of the use of unauthorized power outside the approved boundary of Essar Steel India Limited on the date of detection by DGVCL, as per the Minutes of the Meeting dated 1/2/2010.
3.23. That by communication dated 5/1/2012, the Government of Gujarat directed the appellant - DGVCL to apply provisions of sub-section (6) of Section-126 of the 2003, pending the final settlement of the claim by DGVCL - Vij Company and charge penalty at the rate equal to twice the tariff for electricity consumed till the case of the total claim is settled.
3.24. That the Government of Gujarat also stated in the said letter that keeping in view the overall industrial interest of the State, pending the final settlement of the claim by DGVCL, it is not prudent to hold / withhold open access to the ESIL and Page 16 of 51 HC-NIC Page 16 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT therefore, the Government directed the DGVCL as noted above.
3.25. Pursuant to the aforesaid letter of the Government of Gujarat, DGVCL issued two revised supplementary bills on 25/1/2012, for a total amount of Rs.192,58,53,664/-, worked out as per the provisions of Section-126(6) of the Act, till the total claim is finally settled.
3.26. It appears that on 12/3/2012, ESIL deposited 50% of the charges under the aforesaid supplementary bills under protest. The balance 50% was paid in installments, as recorded vide letter dated 28/3/2012. The delayed payment charges, as demanded by DGVCL, were also paid by ESIL on various dates.
3.27. It appears that on 17/4/2012, the request for the extension of the power boundary, made by ESIL, was approved by DGVCL. On 14/5/2012, upon approval of the revised power boundary, DGVCL approved, by way of a stopgap arrangement, the same system adopted by ESIL on 15/6/2011, closing the line isolator, thereby permitting reverse flow of energy from the Bus-Bar through part of the second electric line and then through the underpass to the Essar Steel (Hazira) Limited.
3.28. That thereafter 19/11/2012, ESIL preferred an appeal under Section 127 of the Act, against the revised supplementary bills of Rs.192,58,53,664/-, before the Appellate Page 17 of 51 HC-NIC Page 17 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT Authority notified by the Government of Gujarat under the Appeal to the Appellate Authority Rules, 2004, as amended in 2006.
3.29. That preliminary objections were raised by DGVCL before the appellate authority with respect to the maintainability of the appeal under Section 127 of the Act against the aforesaid supplementary bills. That a Written Statement was filed by DGVCL, whereas ESIL filed its Written Submissions before the Appellate Authority.
3.30. That by the order impugned in the main Special Civil Application dated 1/11/2013, the Appellate Authority held, inter-alia, that during the relevant period from 15/6/2011 to 30/7/2011, ESIL had consumed total power of 637.26 MU within the authorized and unauthorized premises, out of which its own generation was 470.52 MU. Power totaling 141.51 MU was purchased from GUVNL under open access and 25.23 MU were supplied by DGVCL as per SLDC data. The Appellate Authority also held that the supplementary bills issued by DGVCL could be considered as raised for unauthorized use of electricity by the consumer in the area or premises not authorized by the Licensee and the claim raised on the basis of unauthorized use of 168.42 MU was unreasonable, unjustified and contrary to the provisions contained in Section 126 of the Act. The Appellate Authority also held that therefore, unauthorised use has to be revised to 25.23 MU. The Appellate Authority also observed and directed that since the Page 18 of 51 HC-NIC Page 18 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT consumer had paid the full amount of the supplementary bill, the balance amount was liable to be refunded to it.
4.00. Feeling aggrieved and dissatisfied with the aforesaid order passed by the Appellate Authority dated 1/11/2013, appellant herein - original petitioner - DGVCL preferred Special Civil Application No.2859 of 2014. ESIL also preferred cross-petition being Special Civil Application No. 5494 of 2014 challenging that portion of the order, by which it was held that 25.23 MU of electricity has been unauthorizedly used by it. According to the ESIL only 6.63 MU can be said to have been unauthorisedly used.
4.01. It was contended before the learned Single Judge on behalf of the DGVCL that the appeal preferred by the ESIL against the revised supplementary bills issued by the DGVCL was not competent, as the said bills were issued pursuant to the directive of the State Government and, therefore, it cannot be considered to be a final order under sub-section (6) of section 126 of the Act. It was submitted that the supplementary bills were a result of a computation method adopted as an ad-hoc arrangement and there was no finality attached to it. It was submitted that the procedure envisaged under Section-126 of the Act has never been followed and there was no provisional assessment or a final order. It was submitted that the supplementary bills were not issued after following the provisions of Section 126 of the Act, no appeal against the same was maintainable under Section 127 of Act. It Page 19 of 51 HC-NIC Page 19 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT was further submitted that even if it is assumed that appeal could have been preferred, and without prejudice to the above submissions, such appeal was barred by limitation. It was submitted that provisions of Section 127(1) prescribe that an appeal may be filed within thirty days of the order. It was further submitted that in the present case, the appeal was preferred on 19/11/2012, challenging the bills dated 25/1/2012, almost after ten months i.e. beyond the prescribed period of limitation. It was further submitted that though the aforesaid contention was specifically raised before the authority, the Appellate Authority has erroneously rejected the same. Therefore, it was submitted that the appellate authority had no jurisdiction to decide the appeal preferred by the ESIL.
4.02. Without prejudice to the above, it was further submitted that even otherwise, there was total lack of jurisdiction and competence in the Appellate Authority, viz. the Chief Electrical Inspector. It was also submitted that the said Chief Electrical Inspector, who was appointed on the Committee by the State Government, had passed the impugned order, which could not have been passed by him. Therefore, it was submitted that for the above reasons, Writ of Certiorari would lie to quash and set aside the impugned order dated 1/11/2013.
4.03. Without prejudice to the above, it was further submitted that as such there was clear breach of the Agreement reached vide the Minutes of Meeting dated 1/2/2010 by ESIL, entitling DGVCL to recover, in terms of the Page 20 of 51 HC-NIC Page 20 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT said Agreement, charges for the period during which the second Tie Line was connected to the grid, allowing power from the grid to go to the other units of Essar Group which were not consumers of DGVCL. It was further submitted that pending any decision of making the other units of Essar Group consumers by revising the power boundary without intimation or permission, Essar Group connected the second Tie Line to the grid on 15/6/2011.
4.04. It was further submitted that on that very day they wrote a letter for revising the power boundary. It was submitted that the other units of ESIL Group were not consumers of DGVCL and only ESIL was a consumer. It was submitted that the non-consumer units were not entitled to any power through the grid, whether the power was DGVCL power or Open Access Power. It was submitted that it was found by the Field Officer of DGVCL on 1/7/2011, after scrutinizing MRI data of the apex meter of the Tie Line-2, that power had been flowing from the GETCO grid to Tie Line-2 from 17.00 hours on 15/6/2011. DGVCL - Vij Company addressed a letter dated 26/7/2011 to ESIL, indicating that there was a clear breach of the Agreement dated 1/2/2010, entitling DGVCL to recover charges at the rate of twelve times the quantity found to have been utilized at twice the normal rate (HTP-1) of DGVCL, as per Condition No.2(2) of the Minutes of the Meeting dated 1/2/2010.
4.05. It was further submitted that it was clearly recorded in the said Minutes of the Meeting that in case any Page 21 of 51 HC-NIC Page 21 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT power is found recorded in the meters to be placed on both the Tie Lines of Bhander Power Limited, the power would be treated as DGVCL power. Therefore, it was submitted that accordingly, a supplementary bill computed as per the above Agreement w.e.f. 15/6/2011 to 30/7/2011, amounting to Rs.2311 Crores approximately, was rightly issued to ESIL on 22/9/2011. It was further submitted that as such the said breach has been admitted by ESIL in its letter dated 26/9/2011 and the said breach has also been remedied thereafter.
Number of other submissions were also made on merits.
4.06. On the other hand, it was the case on behalf of the ESIL that the supplementary bills were issued under sub- section (6) of section 126 of the Act as per the directions issued by the State government. It is submitted that even in the communication the State Government directed to issue supplementary bills as per sub-section (6) of section 126 of the Act. It is submitted that therefore, the appeal against the supplementary bills, which were issued as per sub-section (6) of section 126 of the Act, was maintainable.
4.07. Number of other submissions on merits were also made on behalf of ESIL with respect to exorbitant bills of Rs.2311 Crores. It was submitted that as the supplementary bill to the extent of Rs.2311 Crores was exorbitant, it was not possible for the ESIL to run their units without electricity, and therefore, the ESIL approached the State Government and thereafter the State Government appointed a Committee to look into the matter and thereafter on the strength of the Page 22 of 51 HC-NIC Page 22 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT report submitted by the Committee, the State Government directed to issue supplementary bills under sub-section (6) of section 126 of the Act. Therefore, it was submitted that the Appellate Authority rightly held that the appeal before the Appellate Authority under section 127 of the Act against the supplementary bill of Rs.192,58,53,664/- was maintainable.
4.08. That by impugned judgement and order, the learned Single Judge has dismissed the petition preferred by DGVCL - appellant herein - original petitioner of Special Civil Application No. 2859 of 2014 and has confirmed the finding recorded by the learned appellate authority that against the supplementary bills of Rs.192,58,53,664/-, appeal under section 127 of the Act was maintainable. The learned Single Judge by the impugned judgement and order has held that supplementary bills were issued under sub-section (6) of section 126 of the Act and therefore, appeal against the supplementary bills of Rs.192,58,53,664/-, which was before the appellate authority under section 127, was maintainable. That the learned Single Judge has partly allowed Special Civil Application No.5494 of 2014 preferred by the ESIL and has quashed and set aside the order passed by the appellate authority dated 1/11/2013 to the extent holding that there was unauthorised used of power by ESIL to the extent of 25.23 MU and the learned Single Judge has remanded the matter to the Appellate Authority for fresh decision on the aforesaid and after hearing the parties on the limited issue as to whether the unauthorised use of power by ESIL was to the extent of 25.23 MU OR 6.63 MU.
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4.09. Feeling aggrieved and dissatisfied with the
impugned common judgement and order passed by the learned Single Judge in Special Civil Application Nos.2859 and 5494 of 2014 dated 22/1/2015, appellant herein - DGVCL has preferred both these Letters Patent Appeals.
5.00. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has vehemently submitted that the learned Single Judge has materially erred in dismissing the petition preferred by the appellant herein - original petitioner - DGVCL and confirming the order passed by the Appellate Authority dated 1/11/2013.
5.01. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that the learned Single Judge has materially erred in observing and holding that the appeal before the Appellate Authority as contemplated under section 127 of the Act against supplementary bill of Rs.192 Crores was maintainable.
5.02. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that the learned Single Judge has materially erred in observing and holding that the appeal before the appellate authority contemplated under section 127 of the Act against supplementary bill of Rs.192 Crores was Page 24 of 51 HC-NIC Page 24 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT maintainable. It is submitted that while holding so, the learned Single Judge has not properly appreciated the facts and circumstances under which supplementary bill of Rs.192 Crores was issued.
5.03. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that the learned Single Judge has materially erred in not properly appreciating the fact that the supplementary bill of Rs.192 Crores, which was challenged before the appellate authority, was not a supplementary bill issued under sub-section (6) of section 126 of the Act.
5.04. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that by no stretch of imagination the supplementary bill of Rs.192 Crores, which was challenged before the appellate authority , can be said to be a supplementary bill issued under sub-section (6) of section 126 of the Act. It is further submitted that an appeal before the Appellate Authority under section 127 of the Act would be maintainable only against the supplementary bill issued under sub-section (6) of section 126 of the Act. It is submitted that, therefore, when the supplementary bill of Rs.192 Crores, which was before the appellate authority, was not a supplementary bill issued under sub-section (6) of section 126 of the Act, considering section 127 of the Act, Appeal before the Appellate Authority was not maintainable.
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5.05. Mr.Mihir Thakore, learned Senior Advocate
appearing for the appellant herein - original petitioner -
DGVCL has further submitted that even otherwise,
supplementary bill was issued imposing penalty for breach of Memorandum of Understanding / Agreement dated 1/2/2010 and not for/on any other ground as provided under sub- section (6) of section 126 of the Act. Therefore, it is submitted that as such the supplementary bill of Rs.2311.02 Crores cannot be said to be a supplementary bill under sub-section (6) of section 126 of the Act (the bill which has not been challenged)..
5.06. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that the learned Single Judge has not properly appreciated the fact that the supplementary bill of Rs. 192 Crores was issued pursuant to the directions issued by the State Government on the representation made by ESIL and by way of interim arrangement till the issue is finally settled. It is submitted that therefore, supplementary bill of Rs.192 Crores, which was issued pursuant to the directions issued by the State Government, cannot be said to be a supplementary bill issued under sub-section (6) of section 126 of the Act and therefore, appeal under section 127 of the Act before the Appellate Authority was not maintainable.
5.07. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner -
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DGVCL has further submitted that it is the consumer - ESIL who approached the State Government by way of representation, against supplementary bill of Rs.2311.02 Crores and even the State Government appointed a committee and thereafter, till the issue is finally concluded / settled between the parties, the State Government directed to issue ad-hoc supplementary bill of Rs.192 Crores, however by way of interim arrangement only and as per the direction issued by the State Government, appellant - DGVCL issued supplementary bill of Rs.192 Crores, which cannot be said to be a supplementary bill issued under sub-section (6) of section 126 of the Act.
5.08. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that the learned Single Judge has materially erred in not appreciating the fact that in the direction issued by the State Government, the State Government directed the appellant - DGVCL to issue supplementary bill by way of interim arrangement taking base of section 126(6) of the Act. it is submitted that only for the purpose of arriving at a particular amount by way of interim arrangement, the State Government directed to take base of section 126(6) of the Act. It is submitted that therefore, issuance of supplementary bill of Rs.192 Crores, which was issued as per the direction issued by the State Government and by way of interim arrangement only, and till the issue between the parties is finally settled, cannot be said to be a supplementary bill under section 126(6) of the Act. it is, therefore, submitted that therefore, appeal before the Page 27 of 51 HC-NIC Page 27 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT Appellate Authority under section 127 of the Act, against the supplementary bill of Rs.192 Crores was not at all maintainable.
5.09. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that as the appeal before the appellate authority against the supplementary bill of Rs.192 Crores was not maintainable, neither the Appellate Authority nor the learned Single Judge was justified in further entering into the merits of the case / supplementary bill. It is submitted that when the Appeal itself was not maintainable, there was no question of further entering into the merits of the case / Appeal.
5.10. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that even otherwise, appeal before the Appellate Authority was barred by law of limitation as provided under the Act. it is submitted that assuming without admitting that the appeal before the Appellate Authority was maintainable, by way of alternative submission it is submitted that appeal before the appellate authority was barred by limitation as provided under the Act. It is submitted that supplementary bill of Rs.192 Crores was dated 25/1/2012 and that too as per the instructions issued by the State Government and ESIL preferred appeal in the month of November, 2012 i.e. after a period of approximately 10 (ten) months. It is submitted that appeal was required to be Page 28 of 51 HC-NIC Page 28 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT preferred within a period of 30 days and that too on deposit of pre-deposit. It is submitted that, therefore also and even otherwise, the appeal, which was not preferred within the time prescribed, ought not to have entertained by the Appellate Authority.
5.11. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that as such the earlier also ad- hoc supplementary bill of Rs.2311.02 Crores was issued and subsequently another supplementary bill of Rs.192 Crores was issued by the DGVCL as per the direction issued by the State Government by way of an interim arrangement till the issue is finally settled between the parties.
5.12. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL has further submitted that even the State Government in its communication dated 5/1/2012 specifically observed and directed that the DGVCL needs to consider the provisions contained in sub-section (6) of section 126 of the Electricity Act, 2003 and charge penalty at a rate equal to twice the tariff for electricity consumed FOR THE TIME-BEING TILL THE CASE OF TOTAL CLAIM IS SETTLED. It is submitted that as submitted hereinabove, the State Government even directed to consider the provisions of section 126(6) of the Act, as a method by way of interim arrangement only and by no stretch of imagination it can be said to be a decision under sub-section (6) of section 126 of the Act. It is submitted that, Page 29 of 51 HC-NIC Page 29 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT therefore, both the learned Single Judge as well as Appellate Authority have erred in holding that against supplementary bill of Rs.192 Crores, appeal before the Appellate Authority under section 127 of the Act was maintainable.
5.13. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL in Letters Patent Appeal No. 465 of 2015 has further submitted that as such even supplementary bill of Rs.2311.02 Crores was issued and 10 times penalty was imposed for breach of contract / MoU / Agreement dated 1/2/2010 and therefore, there was no question to charge penalty at a rate equal to twice the tariff for the electricity consumed.
5.14. Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL in Letters Patent Appeal No. 465 of 2015 has further submitted that even otherwise and as observed hereinabove by the State Government where the issue of "unauthorised use" was yet to be considered and the said issue was pending and even as observed by the State Government in the communication dated 5/1/2012, DGVCL was directed to issue ad-hoc supplementary bill by way of an interim arrangement and till the issue is finally settled, it is submitted that, therefore, when pursuant to the said observation and direction issued by the State Government, when the supplementary bill of Rs.192 Crores was issued (against earlier supplementary bill of Rs.2311.02 Crores), the same cannot be said to be a supplementary bill issued under sub-section (6) of section Page 30 of 51 HC-NIC Page 30 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT 126(6) of the Act. It is submitted that, therefore, the appeal before the Appellate Authority was not at all maintainable.
5.15 Mr.Mihir Thakore, learned Senior Advocate appearing for the appellant herein - original petitioner - DGVCL in Letters Patent Appeal No. 465 of 2015 has further submitted that as the appeal under section 127 of the Act against supplementary bill of Rs.192 Crores (which was impugned before the appellate committee itself was not maintainable, both the Appellate Authority as well as the learned Single Judge have materially erred in entering into the merits of the case / supplementary bill. It is submitted that as such there was no question of further entering into the merits of the bill and therefore, he is not making any further submissions on merits, reserving liberty to make submissions on merits, in case, this Court holds that appeal before the Appellate Authority against supplementary bill of Rs.192 Crores (impugned before the Appellate Authority) was maintainable under section 127 of the Act.
By making above submissions, it is requested to allow the Letters Patent Appeal and quash and set aside the impugned judgement and order passed by the learned Single Judge as well as decision of the Appellate Authority and consequently allow the main Special Civil Application, by holding that the appeal under section 127 of the Act before the Appellate Authority against the supplementary bill of Rs.192 Crores was not maintainable.
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6.00. Both these appeals are opposed by Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of ESIL in Letters Patent Appeal No. 465 of 2015 and Mr.S.N. Shelat, learned Senior Advocate appearing on behalf of ESIL in Letters Patent Appeal No. 466 of 2015.
6.01. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of ESIL has vehemently submitted that as such issuance of supplementary bill of Rs.2311.02 Crores was a final decision under section 126(6) of the Act determining the liability for unauthorised use of the electricity and DGVCL had as such taken a final decision. Therefore, it is requested to consider the justification of huge and exorbitant demand of Rs.2311.02 Crores.
6.02. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of ESIL has further submitted that against the aforesaid exorbitant demand of Rs.2311.02 Crores, ESIL approached the State Government and requested to intervene in the matter in the larger interest of industry and considering the report of the Committee appointed by the State Government and having found that final demand of Rs.2311.02 Crores was exorbitant and not justifiable at all, the State Government directed to raise demand and impose penalty as per section 126(6) of the Act and consequently when supplementary bill of Rs.192 Crores was issued, it can be said to be supplementary bill under section 126(6) of the Act, as rightly held by the Appellate Authority as well as the learned Single Judge and therefore, appeal before the Page 32 of 51 HC-NIC Page 32 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT Appellate Authority under section 127 was maintainable. It is submitted that therefore, no error has been committed either by the Appellate Authority or by the learned Single Judge in holding that against supplementary bill of Rs.192 Crores, appeal under section 127 of the Act was maintainable.
In support of his above submission, Mr.Mihir Joshi, learned counsel appearing on behalf of the ESIL has heavily relied upon some of the observations made by the Committee in its report as well as observations made by the State Government in its communication dated 5/1/2012.
6.03. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of ESIL has further submitted that in any case even though supplementary bill of Rs.2311.02 Crores would have been challenged, in that case also the same issue which are raised before the Appellate Authority while challenging the supplementary bill of Rs.192 Crores were raised, were required to be gone into. Therefore, he has requested to consider the issue from that angle, more particularly when there is no justification at all for issuing such exorbitant supplementary bill of Rs.2311.02 Crores.
6.04. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of ESIL has further submitted that even the Appellate Authority gave an opportunity to the appellant - DGVCL to satisfy that the supplementary bill of Rs.192 Crores was not a decision under section 126(6) of the Act. However, the appellant - DGVCL failed to satisfy the Appellate Authority Page 33 of 51 HC-NIC Page 33 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT and only thereafter the Appellate Authority had observed and held that the supplementary bill of Rs.192 Crores can be said to be a decision under section 126(6) of the Act and thereafter the Appellate Authority has rightly held that against the supplementary bill of Rs.192 Crores appeal under section 127 of the Act would be maintainable.
6.05. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of ESIL has further submitted that now so far imposing penalty at 10 times of rate of the tariff for the electricity consumed (may be unauthorizedly), the Appellate Authority has rightly observed that the appellant DGVCL cannot go beyond the statutory provisions more particularly section 126(6) of the Act and could not have imposed penalty more than twice of the rate of tariff for the electricity consumed. It is submitted that, therefore, as such the Appellate Authority was justified in holding so.
6.06. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of ESIL has further submitted that even the ESIL is aggrieved by the decision of the Appellate Authority to the extent directing the appellant - DGVCL to issue a revised bill for unauthorised use of 25.23 MU at twice the normal tariff HTP-1, which was subject matter of Special Civil Application No. 5494 of 2014.
6.07. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of ESIL has further submitted that ESIL has also Page 34 of 51 HC-NIC Page 34 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT tried to make submission on merits more particularly on the merits against the supplementary bill of Rs.2311.02 Crores. He has further submitted that even supplementary bill of Rs.2311.02 Crores was a final bill even so stated by the appellant - DGVCL in their submission dated 28/5/2013 before the appellate authority. It is submitted that, therefore, no error has been committed either by the Appellate Authority or by the learned Single Judge in holding that against supplementary bill of Rs.192 Crores, appeal before the Appellate Authority under section 127 of the Act was maintainable.
By making above submissions, it is requested to dismiss the present appeal.
7.00. Mr.S.N. Shelat, learned Senior Advocate appearing on behalf of the ESIL in Letters Patent Appeal No. 466 of 2015 in Special Civil Application No. 5494 of 2014 has submitted that revised bill of Rs.192 Crores and the communication dated 25/1/2012 are required to be read with communication of the State Government dated 5/1/2012. It is submitted that on conjoint reading of the aforesaid communications, supplementary bill of Rs.192 Crores can be said to be a bill issued under section 126(6) of the Act and therefore, against the same, appeal under section 127of the Act was maintainable.
7.01. Mr.S.N. Shelat, learned Senior Advocate appearing on behalf of the ESIL in Letters Patent Appeal No. 466 of 2015 has relied upon the decision of the Hon'ble Supreme Court in Page 35 of 51 HC-NIC Page 35 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT the case of Council of Homeopathic System of Medicine, Punjab and others Versus Suchintan and others, reported in AIR 1994 S.C. 1761, more particularly para 36 of the said decision, in support of his submission that the bill which was challenged before the Appellate Authority of Rs.192 Crores was a supplementary bill and therefore, against the said supplementary bill, appeal under section 127 of the Act was maintainable.
7.02. Mr.S.N. Shelat, learned Senior Advocate appearing on behalf of the ESIL in Letters Patent Appeal No. 466 of 2015 has even tried to make submissions that even the MoU / Agreement is de-hors the law and Electricity Act, 2003.
By making above submissions and relying upon above decision, it is requested to dismiss both the appeals.
8.00. In reply to the aforesaid submissions made by learned Senior Advocates appearing on behalf of ESIL, Mr.Mihir Thakore, learned Senior Advocate appearing on behalf of the DGVCL has vehemently submitted that even the contentions on behalf of the ESIL that the supplementary bill of Rs.192 Crores was a supplementary bill under sub-section (6) of section 126 of the Act, in that case, it would amount to setting aside the original supplementary bill of Rs.2311.02 Crores without any adjudication by the Appellate Authority, and hence the same cannot be accepted.
9.00. Heard the learned Senior Advocates appearing on Page 36 of 51 HC-NIC Page 36 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT behalf of the respective parties at length and have considered the rival submissions made by the respective learned Senior Advocates appearing on behalf of the respective parties in detail. We have also gone through and considered in detail the impugned judgement and order passed by the learned Single Judge dated 22/1/2015 as well as order passed by the Appellate Authority dated 1/11/2013, which was impugned before the learned Single Judge.
9.01. At the outset, it is required to be noted that what was challenged before the Appellate Authority by the concerned respondent herein - ESIL was the supplementary bill issued by the DGVCL of Rs.192 Crores. It is not in dispute that against the said bill, the ESIL preferred appeal before the Appellate Authority under section 127 of the Electricity Act, 2003. It is/was the case on behalf of the DGVCL that against the supplementary bill of Rs.192 Crores, appeal before the Appellate Authority as provided under section 127 of the Act was not maintainable, as supplementary bill of Rs.192 Crores cannot be said to be a supplementary bill under section 126(6) of the Act. Both, the learned Single Judge as well as the Appellate Authority have held that against the supplementary bill of Rs.192 Crores, which was impugned before the Appellate Authority, appeal under section 127 of the Act, was maintainable.
Under the aforesaid circumstances, short question which is posed for consideration of this Court is, whether against the supplementary bill of Rs.192 Crores, appeal as provided under section 127 of the Act was maintainable?
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9.02. To appreciate the aforesaid controversy and while deciding the aforesaid question, the circumstances which led to issuance of supplementary bill of Rs.192 Crores, are required to be considered.
9.03. It appears that there was MoU / Agreement between the DGVCL and ESIL (consumer) dated 1/2/2010. It is not in dispute that the consumer - ESIL was the signatory to the said MoU / agreement. That the said MoU / agreement dated 1/2/2010 provides that in case of breach of any of the provisions of the MoU / agreement, the party who has committed breach, shall be liable to pay 10 times penalty. It appears that the DGVCL issued supplementary bill of Rs.2311.02 Crores alleging inter-alia that there was breach of said MoU / Agreement dated 1/2/2010.
9.04. This Court does not propose to opine anything whether the said supplementary bill of Rs.2311.02 Crores can be said to be a final bill and/or can be said to be a supplementary bill under section 126(6) of the Act, as the same is not the subject matter of present Letters Patent Appeals and even the same was also not the subject matter of appeal before the Appellate Authority and subsequently even before the learned Single Judge.
9.05. It appears that instead of challenging the aforesaid Page 38 of 51 HC-NIC Page 38 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT supplementary bill of Rs.2311.02 Crores before the Appellate Authority / forum, the consumer - ESIL approached the State Government requesting the State Government to intervene in the matter. It appears that the State Government appointed a Committee to look into the grievances to which even the Chief Electrical Inspector who is incidentally also the Appellate Authority, was a party to the said Committee. The Committee submitted its report and thereafter the Dy. Secretary to the Government of Gujarat, Energy and Petrochemical Department, Sachivalaya Gandhinagar vide communication dated 5/1/2012 communicated to the Managing director of the DGVCL, that it has been decided that the DGVCL needs to consider the provisions as contained under sub-section (6) of section 26 of the Electricity Act, 2003 and charge the penalty at a rate equal to twice the tariff for the electricity consumed For The Time Being till the case of total claim is settled. At this stage, it is required to be noted that the learned counsel appearing on behalf of the ESIL are not in a position to point out under which provision of law the Dy.Secretary to the Government of Gujarat issued the aforesaid communication and took the aforesaid decision.
Be that it may, that thereafter considering the aforesaid communication as command / direction, DGVCL issued a supplementary bill of Rs.192 Crores, against which ESIL preferred an appeal before the Appellate Authority under section 127 of the Act.
9.06. To appreciate and/or consider whether the
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supplementary bill of Rs.192 Crores can be said to be a
supplementary bill under sub-section (b) of section 126(6) of the Act, communication dated 5/1/2012, pursuant to which supplementary bill of Rs.192 Crores was issued is required to be considered. Communication dated 5/1/2012 reads as under :-
"CONFIDENTIAL "K.H. Chorera No.GET-13-2010-162809-K Deputy Secretary Government of Gujarat, Energy & Petrochemicals Department, Sachivalaya, Gandhinagar.
Phone : 079-23250786.
Fas No: 079-23250889 Mobile : 97277 82036 E-mail:[email protected] Dated : the 5th January, 2012.
To, Shri H.S. Patel, IAS, Managing Director, Dakshin Gujarat Vij Company Ltd., Surat.
Sub : Committee Report with respect to claim of DGVCL against M/s.Essar Steel Ltd., raised vide Bill No.7598 dated 22/09/2011.
Sir, This is with reference to the report of Committee comprising of (i) Managing Director, GETCO, (ii) Your Goodself and (iii) Chief electrical Inspector, constituted to examine and recommended further action in respect of claim of DGVCL against M/s.Essar Steel Ltd. (ESL) raised vide Bill No.7598 dated 22/09/2011. The findings and the conclusion of the Committee have been carefully examined by the Government.
It has been viewed that although M/s.Essar Group failed to inform the Power Utility about the modification, the fact remains that there is no theft of electricity as full energy is accounted and paid for. Therefore, it is viewed that while deciding this case / Supplementary Bill raised by UGVCL based Page 40 of 51 HC-NIC Page 40 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT on the conclusion drawn by the Committee constituted for the purpose, the provision as contained under sub-section (6) of section 126 of the Electricity Act, 2003 and the instructions issued by Government of India, Ministry of Power, vide their letter dated 30/11/2011, needs to be examined.
It has also been further felt that keeping in view the overall industrial interest of the State, pending the final settlement of claim of DGVCL, it is not prudent to hold the Open Access to M/s.Essar Group.
Therefore, it has been decided that DGVCL needs to consider the provision as contained under sub-section (6) of section 26 of the Electricity Act, 2003 and charge the penalty at a rate equal to twice the tariff for electricity consumed for the time being till the case of total claim is settled. Meanwhile it has also been decided that M/s. ESL should be allowed Short Term Open Access, with immediate effect.
I am, therefore, to request you please to take further appropriate action accordingly.
Yours faithfully, (K.H. Chorera) Deputy Secretary to Govt.
Copy forwarded with compliments to :
* The Managing Director, Gujarat Urja Vikas Nigam Limited, Vadodara.
* The Managing Director, Gujarat Energy Transmission Corpn.
Ltd., Vadodara.
...... With a request to take further appropriate action in granting necessary approvals / clearances for allowing Open Access to M/s.Essar Group.
Copy to : The CEO & MD, M/s. Essar Steel (India) Ltd., Hazira, Surat."
9.07. Even communication dated 25/1/2012 issued by the DGVCL to ESIL , by which revised supplementary bill for a total sum of Rs.192,58,53,664=00 was issued to the ESIL also deserves consideration. Communication dated 25/1/2012 reads as under :-
"DGVCL An ISO 9001 Page 41 of 51 HC-NIC Page 41 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT 2000 Certified DAKSHIN GUJARAT VIJ CO. LTD.
SURAT (O&M) CIRCLE NANA VARACHHA ROAD, KAPODRA NEAR GAJJAR PETROL PUMP, SURAT 395 006 PH.No.261-2804301 FAX No.0261-2570714 e-mail: [email protected] No.: SC/O&M/2012/850 Date : 25.01.2012. By.R.P.A.D. To, M/s.ESSAR Steel Limited, 27th KM Surat Hazira road, Hazira, SURAT - 394270.
Sub : Revised Suppl. Bill for restoration of BPOL Tle-Line No.2 to 220 KV Bus bar of ESSAR Steel Limited without prior permission of DGVCL and by that way connecting new 220 KV MRSS with Bus Bar of ESSAR Steel Limited.
Ref : Our letter No.SC/O&M/REV/Essar/7598 dated 22/09/2011.
Dear Sir, In above subject matter, enclosed herewith please find a Revised Suppl. Bill No.474 & 475 dated 25/1/2012 for a total amount of Rs.192,58,53,664 worked out as per GoG letter No.GET-13-2010-162809-K dated 5/1/2012 till the case of total claim of Rs.23110243968 is finally settled.
Thanking you, Yours faithfully, Sd/-
(P.R. Sharma) C.E.O. & Suptd. Engineer (O&M) DGVCL, C.O., SURAT.
Encl : A revised suppl. Bill.
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Copy to :
The Managing Director
M/s. Bhander Power Ltd.,
27th KM, Surat-Hazira Road,
HAZIRA, SURAT - 394 270.
Copy f.w.cs. to :
1. P.S. to P.S. E&P Department, GoG, Gandhinagar.
2. P.S. to MD, GUVNL, Vadodara.
3. P.S. to MD, GETCO, Vadodara.
4. P.S. to MD, DGVCL, Surat.
5. C.E. (O&M), DGVCL, Corpn.
Copy to :
E.E. (O&M) DGVCL, Rander Divn. Office, Rander (Surat)."
9.08. Against the aforesaid revised supplementary bill of Rs.192,58,53,664=00, consumer - ESIL preferred appeal before the Appellate Authority under section 127 of the Act. As per section 127 of the Act, any person aggrieved by th final order made under section 126 may, within 30 days of the said order, prefer an appeal before the Appellate Authority as may be prescribed. Thus, only against the final order made under section 126 of the Act, that too within a period of 30 days of the order, aggrieved party / person can prefer an appeal before the appellate authority as provided under section 127 of the Act.
9.09. Section 126 of the Act provides for assessment. Sections 126 and 127 of the Act read as under :-
Section 126 : Assessment. -
(1). If on an inspection of any place or premise or after inspection of the equipments, gadgets, machines, devices found connected or or used, or Page 43 of 51 HC-NIC Page 43 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT after inspection of records maintained by any person, the assessing officer comes to the conclusion that such person is indulging in unauthorised use of electricity, he shall provisionally assess to the best of his judgement the electricity charges payable by such person or by any other person benefited by such use.
(2). The order of provisional assessment shall be served upon the person in occupation or possession or in charge of the place or premises in such manner as may be prescribed.
(3). The person, on whom an order has been served under sub-section (2) shall be entitled to file objections, if any, against the provisional assessment before the assessing officer, who shall, after affording a reasonable opportunity of hearing to such person, pass a final order of assessment within thirty days from the date of service of such order of provisional assessment, of the electricity charges payable by such person.
(4). Any person served with the order of
provisional assessment may, accept such
assessment and deposit the assessed amount with the licensee within seven days of service of such provisional assessment order upon him.
(5). If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorised use of electricity has been taken place and if, however, the period during which such unauthorised use of electricity has taken Page 44 of 51 HC-NIC Page 44 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT place cannot be ascertained,such period shall be limited to a period of twelve months immediately preceding the date of inspection.
(6). The assessment under this section shall bemade at a rate equal to twice the tariff applicable for the relevant category of service specified in sub-section (5).
Explanation : For the purpose of this section, --
(a) "Assessing officer" means an officer of a State Government or Board or licensee, as the case may be, designated as such by the State Government.
(b) "unauthorised use of electricity" means the usage of electricity--
(i) by any artificial means; or
(ii)by a means not authorised by the concerned person or authority or licensee; or
(iii)through a tampered meter; or
(iv)for the purpose other than for which the usage of electricity was authorised; or
(v)for the premises or areas other than those for which the supply of electricity was authorised.
Section 127 : Appeal to appellate authority.- (1). Any person aggrieved by the final order made under section 127 may, within thirty days of the said order, prefer an appeal in such form, verified in such manner and be accompanied by such fee as may be specified by the State Commission, to an appellate authority as may be Page 45 of 51 HC-NIC Page 45 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT prescribed.
(2). No appeal against an order of assessment under sub-section (1) shall be entertained unless an amount equal to half of the assessment is deposited in cash or by way of bank draft with the licensee and documentary evidence of such deposit has been enclosed along with the appeal.
(3). The appellate authority referred to in sub-
section (1) shall dispose of the appeal after hearing the parties and pass appropriate order and send copy of the order to the assessing officer and the appellant.
(4). The order of the appellate authority referred to in sub-section (1) passed under sub- section (3) shall be final.
(5). No appeal shall lie to the appellate authority referred to in sub-section (1) against the final order made with the consent of the parties.
(6). When a person defaults in making payment of assessed amount, he, in addition to the assessed amount, shall be liable to pay, on the expiry of thirty days from the date of order of assessment, an order of interest at the rate of sixteen per cent per annum compounded every six months."
9.10. If the revised supplementary bill of Rs.192.58 Crores (approximately) which was the subject matter of appeal Page 46 of 51 HC-NIC Page 46 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT before the Appellate Authority is considered in light of section 126, more particularly section 126(6) of the Act, it cannot be said that issuance of the revised supplementary bill of Rs.192.58 Crores (approximately) was final order made under section 126 of the Act. It is required to be noted that revised supplementary bill of Rs.192.58 Crores (approximately) was issued pursuant to the communication by the Dy.Secretary, to the Government of Gujarat, Energy and Petrochemical Department, Sachivalaya, Gandhinagar, and that too for the time being till the case of the total claim is settled. Even in the communication dated 25/1/2012 while sending revised supplementary bill of Rs.192.58 Crores (approximately) it has been specifically mentioned that the revised supplementary bill of Rs.192.58 Crores (approximately) has been worked out as per the Government of Gujarat letter dated 5/1/2012 and till the case of the total claim of Rs.2311.02 Crores is finally settled. Under the circumstances, by no stretch of imagination it can be said to be final order under section 126 of the Act and therefore, appeal against the revised supplementary bill of Rs.192.58 Crores (approximately) under section 127 of the Act was not maintainable.
9.11. The contention on behalf of the respondent - consumer - ESIL that in the communication dated 15/1/2012 after considering the report submitted in the Committee, the State Government decided that the DGVCL needs to consider the provisions contained in sub-section (6) of section 126 of the Act and charge the penalty at a rate equal to twice the tariff for electricity consumed and consequently when DGVCL Page 47 of 51 HC-NIC Page 47 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT issued revised supplementary bill of Rs.192.58 Crores (approximately) and therefore the said revised supplementary bill can be said to be supplementary bill issued on assessment under sub-section (6) of section 126 of the Act and therefore, appeal before the Appellate Authority under section 127 of the Act against the said revised supplementary bill was maintainable, is concerned, the aforesaid seems to be attractive but has no substance. The communication dated 5/1/2012 is required to be read as a whole and that too, is required to be read along with the communication dated 25/1/2012. From the communication dated 5/1/2012 issued by the State Government at the most it can be said to be an interim arrangement and by way of interim arrangement till the issue is finally settled, it was decided to raise bill considering the provisions as contained under sub- section (6) of section 126 of the Electricity Act, 2003 as base and/or method. As observed hereinabove, in the aforesaid communication it has been specifically mentioned that the said interim arrangement has been made "for the time being till the total claim is settled."
9.12. Even in the communication dated 25/1/2012 it has been so stated by the DGVCL to the ESIL that the said revised supplementary bill of Rs.192.58 Crores (approximately) has been worked out and issued as per the Government of Gujarat letter dated 5/1/2012 and till the case of total claim of Rs.2311.02 Crores is finally settled.
9.13. If the contention on behalf of the respondent -
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consumer - ESIL that the revised supplementary bill of Rs.192.58 Crores (approximately) was an assessment and under sub-section (6) of section 126 of the Act and it was a final order under section 126 of the Act, is accepted, in that case it would tantamount to quashing and setting aside the earlier supplementary bill of Rs.2311.02 Crores without any adjudication by the Appellate Authority / forum constituted under the Act.
9.14. As observed hereinabove, it is not appreciable and/or known under which provision of law, Government of Gujarat took the aforesaid decision dated 5/1/2012. As observed hereinabove, in any case, supplementary bill of Rs.192.58 Crores (approximately) which was issued till the case of total claim of Rs.2311.02 Crores is finally settled, cannot be said to be a final order under section 126 of the Act. Therefore, we are of the firm view and opinion that against the revised supplementary bill of Rs.192.58 Crores (approximately), appeal before the Appellate Authority under section 127 of the Act was not maintainable. Both, the Appellate Authority as well as the learned Single Judge have committed an error in holding that against the revised supplementary bill of Rs.192.58 Crores (approximately) appeal before the Appellate Authority under section 127 of the Act was maintainable.
Consequently and once it is held that against the revised supplementary bill of Rs.192.58 Crores (approximately) appeal under section 127 of the Act before the Appellate Authority was not maintainable, the Appellate Authority as well as the learned Single Judge have materially erred in entering Page 49 of 51 HC-NIC Page 49 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT into the merits of the said revised supplementary bill.
9.16. At this stage, it is required to be noted that even the Appellate Authority has gone to the extent observing that even the provisions contained in the MoU / Agreement dated 1/2/2010 that in case of any breach of Mou / Agreement, 10 times penalty shall be levied, is contrary to the statutory provisions of the Electricity Act. However, it is required to be noted that as such the MoU / Agreement dated 1/2/2010 was never the subject mater before the Appellate Authority and even the same was never challenged by the consumer - ESIL. In fact, it can be said to be a contract between the parties, which was signed by the respective parties. Under the circumstances, the observations made by the Appellate Authority that the MoU / Agreement is against the provisions of the Electricity Act, were unwarranted.
10.00. In view of the above and for the reasons stated above, the order passed by the Appellate Authority confirmed by the learned Single Judge cannot be sustained, as the appeal before the Appellate Authority itself is held to be not maintainable. Consequently, both these Letters Patent Appeals are ALLOWED and the order passed by the Appellate Authority dated 1/11/2013 as well as the impugned judgement and order passed by the learned Single Judge dated 22/1/2015 deserve to be quashed and set aside and the same are hereby quashed and set aside on the aforesaid ground alone.
In the facts and circumstances of the case, there shall be no order as to costs.
Page 50 of 51 HC-NIC Page 50 of 51 Created On Tue Sep 08 01:41:02 IST 2015 C/LPA/465/2015 JUDGMENT Sd/- (M.R.SHAH, J.) Sd/- (A.G.URAIZEE,J) Rafik... Page 51 of 51 HC-NIC Page 51 of 51 Created On Tue Sep 08 01:41:02 IST 2015