Madras High Court
Tablets (India) Limited, Represented ... vs The Chairman, Tamil Nadu Electricity ... on 27 July, 1998
Equivalent citations: (1998)3MLJ347
ORDER T. Meenakumari, J.
1. The writ petition is for the issue of a writ of certiorarified mandamus to call for the records in leading to the order bearing letter No. AAO/RPM/ AS.I/ Audit/D 1084/ 89, dated 6.5.1989 of the third respondent and quash the same and forbear the respondents from collecting the amount of Rs. 1,91,079.71 in connection with the petitioner's Account No. 01.112-16 or on any account.
2. The case of the petitioner is that it is manufacturing pharmaceutical products. For the purpose of its business, the petitioner has a factory at No. 179, T.H.Road, Madras-1. It is also stated that for the purposes of running and operating their factory, the petitioner requires electricity supplied by the Tamil Nadu Electricity Board. The petitioner company started its operations in 1966 and under Account No. 01.112/16, they availed of an electricity connection from the Electricity Board. At the initial stage, the petitioner was granted only a low tension (LT) supply which was subsequently changed to a high tension (HT) supply on 26.7.1979. On 29.8.1977, the Area Divisional Engineer (North) (ADE(N) on an inspection of the petitioner's premises alleged to have found a load of 171.5 H.P. as against the contracted load of 150 H.P. Accordingly, the Area Divisional Engineer (North) issued notice on 29.8.1977 for excess loading. After enquiry the respondents have come to the conclusion that the petitioner had contravened the terms of supply. Accordingly, penalty was levied on them. By letter dated 26.10.1977, the petitioner was informed that a penalty amount of Rs. 15,820 would be levied from them for such unauthorised load connection. Subsequently, the above amount has been paid by the petitioner. Thereafter, the second respondent informed the petitioner that the penalty amount of Rs. 15,820 was short levied and the petitioner was directed to pay Rs. 9,237 as penalty in addition to Rs. 15,820. As there was a threat of disconection, the petitioner was made to pay the amount. In this writ petition it is stated that the petitioner is aggrieved by the order passed by the third respondent in letter No. AAO/RPM/AS.I/ Audit/D 1084/89, dated 6.5.1989 which was received by the petitioner under two hands of Rs. 1,75,460,45 and Rs. 15,619,26 arising out of the said inspection on 29.8.1977. It is further averred that the above demand by the third respondent and the action of the third respondent to re-open the issue which was concluded more than ten years ago is arbitrary, illegal and without giving an opportunity to the petitioner. It is averred in the writ petition that the basis for the action of tire third respondent was the audit slip No. 125 dated 29.12.1980 and No. 62 dated 2.6.1980 where the audit Department has opined that the said larger amounts be demanded from the petitioner. It is also contended that the respondents nearly after a lapse of ten years are barred from claiming the amount. It is also further averred that the impugned demand did not take note of the amount paid by the petitioner and also the mode of calculation and there was no basis for mode of calculation of the penalty. Hence, the same is challenged in this writ petition.
3. The Electricity Board has filed a counter stating that the petitioner was initially having L.T. supply and later he converted the same into H.T. supply. The auditors of the Board have reviewed the service connection and observed the wrong classification of billing and the difference in billing thus arose to the tune of Rs. 1,58,257.45. They have disputed the claim of the petitioner that the demand is barred by limitation. It is also stated in the counter that the petitioner's claim is baseless, and the demand made by the respondent on the basis of the audit slip is lawful.
4. Heard the counsel for petitioner. It is contended on behalf of the petitioner that the petitioner was continuously paying the bills as demanded by the respondents Board. It is also contended that the total amount of Rs. 25,057 (15,820 + 9,237) towards the penalty charges have been paid by the petitioner. The demand of the third respondent is also barred by limitation and the counsel appearing on behalf of the petitioner has relied upon Clause 30 (b) of the terms and conditions of electricity supply by the Electricity Board which states in the event of any mistake in the amount levied, demanded or charged by the Board, the Board shall have a right to demand such additional amount provided that at. that time such claims were not barred by limitation under the laws than in force. Basing on the above regulation, it is contended that the demand is barred by limitation as the demand pertains to a period of more than ' twelve years. It is also contended that the respondents have not taken into consideration the amounts already paid by the petitioners. The impugned order proceeded on the basis of clear arithmetical miscalculation, without crediting the amounts paid by the, petitioner and duly received by the Department, based on the mode of calculation of penalty of some internal memo of the Electricity Department which was repealed well prior to the date of inspection and proceedings regarding the alleged Unauthorised load found on 29.8.1977 and clearly recognises that such connected load was duly revised on 23.1.1978 but conveniently ignores the same in the calculation of amounts demanded. To support his contention that the demand is barred by limitation, learned Counsel for the petitioner has relied upon the decision of this court in State Electricity Board v. Govindarajulu (1960) 2 M.L.J. 245, wherein it was held that the law of limitation also applied to the suits filed by the State Electricity Board. He has also relied upon the decision of the Supreme Court in Tata Iron & Steel Co. Ltd. v. Union of India and Ors. (1988) 35 E.L. T. 605 (S.C.), to show that the period of limitation controls the demand. learned Counsel has also relied on the decision of the Supreme Court in Salonah Tea Company Ltd. v. Superintendent of Taxes, Nowgong and Ors. (1988) 69 S.T.C. 290, wherein it was held that there can be no doubt that the assessments on the basis thereof had been collected without the authority of law from the appellants, basing on the above decisions, it is contended by the learned Counsel that the demand made by the respondents is illegal, without any basis or authority of law and it is barred by limitation.
5. On the other hand, a perusal of the counter affidavit reveals that the Audit Department has revised the bills which necessitated the respondents to issue the revised demand even though it pertained to a period of more than 12 years. The contention of the respondent Board is as long as the petitioner availed the supply, he is bound to pay the electricity charges applicable to the nature of utility. Hence, the demand made is perfectly valid.
6. In this case, it is admitted that the petitioners have paid the amount as and when there was a demand and the respondents have issued the impugned demand notice nearly after a period of nine years and the only basis is the audit report. Section 60-A of the Electricity (Supply) Act, 1948 deals with the period of limitation extended in certain cases, which read thus:
Where the right to recover any amount due to the State Government for or in connection with the consumption of electricity is vested in the Board and the period of limitation to enforce such right has expired before the Constitution of the Board, or within three years of its Constitution, then, notwithstanding anything contained in the Indian Limitation Act, 1908 (9 of 1908), or any other law for the time being in force relating to limitation of action, the Board may institute a suit for the recovery of such amount:
(i) Where it has been constituted before the commencement of the Electricity (Supply) Amendment Act, 1966 (30 of 1966), within three years of such commencement; and
(ii) where it has been constituted after such commencement, within three years of its Constitution.
As per the above provision, the Board should have instituted a suit for recovery of the amount within the period of limitation as prescribed under the Act. Hence, I have no hesitation to hold that the Board should have followed their own rules and regulations in demanding the amount. As they have not followed the provisions of the Act, for recovering the amount from, the petitioner, I hold that the demand made by the respondents is without any authority of law and I uphold the contention of the petitioner that the demand is barred by limitation. Hence the impugned order passed by the third respondent in letter NO.AAO/RPM/AS.I Audit/D 1084/89, dated 6.5.1989 is quashed. The writ petition is allowed. No costs. Consequently, W.M.P.No. 9999 is dismissed.