Bombay High Court
M/S Pioneer Estate Corporation vs Maharashtra State Elecytricity ... on 24 September, 2024
Author: Sharmila U. Deshmukh
Bench: Sharmila U. Deshmukh
2024:BHC-AS:37814
wp 14216-23 & 8467-23.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 14216 OF 2023
M/s. Pioneer Estate Corporation, ]
A partnership Firm having its ]
registered office at 198, ]
Khetwadi Main Road, Mumbai - 400 004 ]
and its Correspondence address at S. No. ]
133/134, Western India Steel Compound, ]
Pakhran Road No.2, Thane - 400 601. ] ...Petitioner.
Versus
Maharashtra State Electricity Distribution ]
Co., Ltd Through Office of ]
Executive Engineer, Thane II Division, ]
New Administrative Building, 3rd Floor, ]
Wagle Estate, Thane (W), ]
Maharashtra - 400004. ] ...Respondent.
WITH
WRIT PETITION NO. 8467 OF 2023
Maharashtra State Electricity Distribution ]
Co., Ltd Through Office of ]
Executive Engineer, Thane II Division, ]
Administrative Office Building, ]
Road No. 16, Opposite Old Passport Office, ]
Wagle Estate, Thane (W), ]
Maharashtra - 400004. ]
Email id :- [email protected] ] ...Petitioner.
Versus
M/s. Pioneer Estate Corporation, ]
133/134,Majiwada, Behind paper products, ]
Thane (West). ] ...Respondent.
------------
Mr. Joaquim Reis, Senior Advocate along with Mr. Raj Patel, Ms.Deeksha Jani,
Mr. Niket Jani and Parikh for the Petitioner in WP 14216 of 2023 and for the
Respondent in WP 8467 of 2023.
Mr. Rahul Sinha, Mr. Soham B. i/b DSK Legal for the Respondent in WP 14216 of
2023 and for the Petitioner in WP 8467 of 2023.
------------
Patil-SR (ch) 1 of 15
wp 14216-23 & 8467-23.doc
Coram : Sharmila U. Deshmukh, J.
Reserved on : September 10, 2024.
Pronounced on : September 24, 2024.
Judgment :
1. Rule. Rule made returnable forthwith and by consent of learned counsel appearing for the respective parties, taken up for final disposal.
2. These two petitions challenge the order dated 4 th October 2022 passed by the Appellate Authority under the Electricity Act, 2003 in Appeal No.7 of 2015. Writ Petition No. 14216 of 2023 has been filed by the consumer being aggrieved by the impugned order to the extent that it does not grant interest to the Petitioner on the deposited amount of Rs.49,08,150/-. Writ Petition No.8467 of 2023 has been filed by the electricity distribution company aggrieved by the order by which the final assessment order dated 29th April 2024 has been set aside by the Appellate Authority and seeks liberty to recover the dues as per the original supplementary bill and energy bill dated 28 th August 2014 for an amount of Rs.98,16,300/- for the period from 1 st May 2009 to 30th August 2014. Common submissions were advanced and both petitions are being disposed of by this common judgment.
FACTUAL MATRIX:
3. For sake of convenience, parties are referred to by their status in Patil-SR (ch) 2 of 15 wp 14216-23 & 8467-23.doc Writ Petition No. 14216 of 2023. On 31st January, 1997, the Petitioner was granted 3 phase low-tension power connection with tariff category as industrial purpose. By an agreement dated 3 rd December 2009 the premises were given by the Petitioner to one M/s. S.C. Auto Corporation on leave and licence basis for the purpose of carrying out the activity of repairing and rebuilding of damaged vehicles, painting, denting and allied services in the said premises, which activity was classified as industrial activity as per Government Resolution dated 7 th November 1998. On 21st September 2013, the Deputy Executive Engineer of Respondent visited the Petitioner's premises and initiated proceedings under Section 126 of the Electricity Act, 2003 alleging unauthorised use of electricity as the activity carried out was commercial activity in view of the fresh classification vide MERC order in Case No.19 of 2012 which was effective from 1 st August 2012. The provisional assessment bill dated 25 th September 2013 was issued by the Respondent for the period 1st August 2012 to September 2013.
Upon objection by the Petitioner, the Deputy Executive Engineer revised the provisional assessment Bill and passed Final assessment order dated 28th August 2013 stating that the re- categorization does not amount to unauthorised use of electricity. Consequently, the provisional assessment bill amounting to Rs 23,21,970/ was quashed, the Petitioner was billed on commercial tariff from the date of Patil-SR (ch) 3 of 15 wp 14216-23 & 8467-23.doc inspection, i.e. 11th September 2013 and the tariff difference of Rs.78,560 for the September 2013 would stand recoverable. Appeal No.14 of 2014 was filed by the Petitioner before the Appellate Authority against the order dated 28th October 2013 which came to be dismissed upholding the Final Assessment Order and accordingly the Petitioner paid an amount of Rs.78,560 as per the final assessment order.
4. Subsequent to September 2013, the Petitioner's connection was changed to commercial tariff with effect from the date of inspection i.e. 11th September 2013. A provisional assessment bill dated 28 th August 2014 was issued by the Executive Engineer of Respondent- Company under section 126(6)(b) of the Electricity Act, 2003 alleging unauthorised use of electricity for the period 1st May 2009 to 30th August 2013 levying a sum of Rs.98,16,300/-. The final assessment order was passed by the Executive Engineer dated 29 th September 2014 upholding the levy of Rs.98,16,300/- and the final electricity bill dated 29th September 2014 was raised based on the Final Assessment Order.
5. The final assessment order dated 29 th September 2014 was challenged by the Petitioner under Section 127 of the Electricity Act, 2003 by Appeal No. 7 of 2014 before the Appellate Authority. As per Section 127(2) of the Electricity Act, 2003 the Petitioner deposited the Patil-SR (ch) 4 of 15 wp 14216-23 & 8467-23.doc amount equivalent to 50% of the final assessment bill, i.e. Rs.49,08,150/- under protest with the Respondent-Company. Vide order dated 5th October 2017 the Appellate Authority allowed the appeal quashing the final assessment order dated 29 th September 2014 and directing the refund of 50% amount deposited by the Petitioner along with interest at the rate of 16% thereon from the date of payment till the date of refund and to refund a sum of Rs.50,099/- which was interest levied by the executive engineer on the balance 50% amount charged to the Petitioner as per final assessment during the pendency of appeal.
6. The Respondent-Company preferred Writ Petition No.71 of 2019 challenging the order dated 5th October 2017. Vide order dated 5 th February 2020 this Court remanded the matter to the Appellate Authority for fresh decision while holding that the user of electricity for automobile garage purpose was changed from industrial category to commercial category from 1st August 2012 and therefore at least from 1st August 2012 the consumer was liable to pay the electricity tariff as commercial consumer. This Court further held that imposing interest on the electricity distribution company on the statutory deposit made by the consumer directed to be refunded at the rate of 16% interest appears to be not justified and that the provision for payment of interest by the defaulting consumer cannot be invoked Patil-SR (ch) 5 of 15 wp 14216-23 & 8467-23.doc while directing the refund of statutory deposit by the licensee when appeal is allowed.
7. Upon remand, the Appellate Authority vide order dated 4 th October 2022 allowed the appeal setting aside the final assessment order dated 29th September 2014 and directed the Respondent- Company to refund the 50% amount deposited by the Petitioner immediately. It further directed the Respondent-Company to refund the interest amount of Rs.50,099/- charged to the Petitioner on the disputed amount and directed the order to be implemented within a period of 30 days from the date of order.
8. The Petitioner in Writ Petition No.14216 of 2023 is aggrieved by the order of Appellate Authority as it does not grant any interest on the deposited amount of Rs.49,08,150/- and the electricity distribution company is aggrieved as the final assessment orders of the Respondent-Company are cancelled.
SUBMISSIONS:
9. Mr. Reis, learned Senior Advocate appearing for the Petitioner would submit that by order dated 28th October 2013 the tariff difference of Rs.78,560/- for the month of September 2013 was held recoverable which had been paid. He submits that the final assessment order was for the period from 1 st August 2012 to 30th September 2013 and once the final assessment order for the period 1 st Patil-SR (ch) 6 of 15 wp 14216-23 & 8467-23.doc August 2012 to 30th September 2013 crystallizes the tariff difference at Rs.78,560/-, which has been duly paid, no further amount for the period 1st August 2012 to 30th September 2013 could be levied. He submits that final assessment order dated 28th October 2013 was not challenged by the Respondent-Company and therefore the same attained finality. He would further submit that the impugned order dated 4th October 2022 arises out of the final assessment order dated 29th September, 2014 passed in respect of the period 1 st May 2009 to 31st August 2013 which included the previous period of 1 st August 2012 to 30th September 2013 which was already decided by order dated 28 th October 2013 and the tariff difference was paid. He would submit that the Appellate Authority has rightly held that even if the Appellant's commercial category comes from 1st August 2012 as survey was conducted for the first time on 11 th September 2013 the value assessment done for the period 1 st August 2012 to 31st August 2013 is wrong. He submits that the Appellate Authority ought to have granted interest on the amount deposited by the Petitioner in view of Section 62(6) of the Electricity Act, 2003 which has been refused by the Appellate Authority by holding that 50% of the amount deposited is not recovery of dues or charged amount and hence section 62(2) of the Electricity Act, 2003 is not applicable in this case. He would submit that considering the decision of this Court dated 5 th February 2020 even if it Patil-SR (ch) 7 of 15 wp 14216-23 & 8467-23.doc is held that the refund of security deposit will not be liable to carry interest as the order was directed to be implemented within a period of 30 days and as the same has not been implemented, the Petitioner is entitled to interest after the expiry of said period of 30 days.
10. Per contra Mr. Sinha, learned counsel appearing for the Respondent would submit that as far as the interest aspect is concerned, this Court by order dated 5th February 2020 has held that imposing interest on the statutory deposit since directed to be refunded appears to be not justified and that provision for deposit of interest cannot be invoked while directing refund of statutory deposit by the licensee when the appeal is allowed. He would further submit that by the said decision this Court had specifically held that at least from 1st August 2012 the consumer was liable to pay electricity tariff as a commercial consumer and therefore the impugned judgment quashing the final assessment orders is required to be quashed and set aside.
REASONS AND ANALYSIS :
11. The final assessment order dated 29th September 2014 was for the period 1st May 2009 to 31st August 2013 levying Rs 98,16,300/ on the Petitioner. It is not disputed that there was previous provisional assessment bill dated 25th September 2013 issued by the Executive engineer of Respondent-Company for the period 1 st August, 2012 to Patil-SR (ch) 8 of 15 wp 14216-23 & 8467-23.doc September, 2013 which came to be revised by final assessment order dated 28th October 2013 holding that the re-categorization does not amount to unauthorised use of electricity. The official of the Respondent held that consumer is to be billed on commercial tariff from date of inspection i.e. 11 th September, 2013 and that the tariff difference was of Rs.78,560/- for the month of September 2013. The Appeal against the same filed by the Petitioner was dismissed by the Appellate Authority on 23rd April, 2015 upholding the order dated 28 th October, 2013. The order of the Appellate Authority was not challenged by the Respondent-Company and thus the said order has attained finality. Thus the levy was finalised at the tariff difference of Rs 78,560/ which was payable from date of inspection i.e. 11 th September, 2013.
12. Despite the earlier final assessment order of the year 2013 covered the period from 1st August 2012 to September 2013, once again the Respondent-Company issued provisional assessment bill dated 28th August 2014 alleging unauthorised use of electricity for the period 1st May 2009 to 30th August 2013. The period which was covered in the subsequent provisional assessment bill was already covered in the earlier provisional assessment bill of 25 th September 2013 and had culminated in the final assessment order dated 28 th October 2013 and the order of the Appellate Authority dated 23 rd April, 2015. Not having Patil-SR (ch) 9 of 15 wp 14216-23 & 8467-23.doc challenged the final assessment order, the Respondent-Company was bound by the final assessment order dated 28 th October, 2013 issued by its own official and upheld by the Appellate Authority. Thus the issue stood concluded as regards the period i.e. from date of inspection of 11th September, 2013 and the amount i.e. Rs 78,560/-.
13. The finality of the said assessment is sought to be disturbed by the Respondent by placing reliance on the order dated 5 th February 2020 passed by this Court in Writ Petition No.71 of 2019. Upon a reading of the order of 5 th February 2020, it is clear that this Court was considering the subsequent assessment order of 29 th September 2014 and the previous final assessment order of 28 th October 2013 and the order of the Appellate Authority dated 23rd April, 2015 was not brought to the notice of this Court. This Court had therefore considered the assessment period covered by the final assessment order dated 29th September 2014 and held that as the user of electricity for automobile garage purpose was changed from industrial category to commercial category from 1st August 2012, therefore at least from 1st August 2012 the Petitioner was liable to pay electricity tariff as commercial consumer. The order dated 5th February, 2020 passed by this Court cannot affect the finality of the final assessment order dated 28th October, 2013 and the Appellate Authority's order dated 23rd April, 2015 especially since these two orders were not Patil-SR (ch) 10 of 15 wp 14216-23 & 8467-23.doc placed for consideration in the Writ Petition and I am unable to subscribe to the view that the order dated 5 th February, 2020 gave liberty to the Respondent to levy electricity tariff from 1 st August, 2012. The principles of res judicata would bar the Respondent from seeking to recover the electricity charges for the period 1st August 2012 to September 2013 covered by the final assessment order dated 28th October 2013 and order dated 23rd April, 2015.
14. Apart from the above, the impugned order further notes that even if the Petitioner's connection is categorised as commercial from 1st August, 2012, the survey was conducted for the first time on 11 th September 2013 and therefore the action regarding changing the Petitioner's classification into commercial from 1 st September 2013 is proper. The Appellate Authority has also rightly held that Appellant's electricity use has been changed to commercial classification from September 2013 and therefore the value assessment for the period 1 st May 2009 to 31st August 2013 is unreasonable. I find no reason to interfere with the conclusion arrived at by the Appellate Authority.
15. As far as the aspect of levying of interest on the refund directed by order dated 4th October 2022 is concerned, the Appellate Authority has held that the amount deposited is not recovery of dues or charged amount and hence Section 62(6) of the Electricity Act, 2003 is not applicable. Section 62 of the Electricity Act, 2003 deals with the Patil-SR (ch) 11 of 15 wp 14216-23 & 8467-23.doc determination of tariff and Sub-Section (6) of Section 62 of the Electricity Act, 2003 provides that if any licensee or a generating company recovers a price or charge exceeding the tariff determined under this Section, the excess amount shall be recoverable by the person who has paid such price or charge along with interest equivalent to the bank rate without prejudice to any other liability incurred by the licensee.
16. The amount deposited by the Petitioner was a statutory deposit under Section 127(2) of the Electricity Act, 2003 which provides that for the purpose of maintaining an appeal, amount equivalent to half of the assessed amount is required to be deposited with the licensee and the documentary evidence of such deposit is required to be enclosed with the appeal. The amount of 50% has been deposited which is a statutory deposit as a precondition to entertaining of appeal. This Court in Writ Petition No.71 of 2019 by order dated 5 th February 2020, in the earlier round of litigation where the Appellate Authority had directed the refund of statutory deposit along with interest at the rate of 16% was held to be unjustified had held that the provision for payment of interest on the assessment amount by the defaulting consumer cannot be invoked while directing the refund of security deposit by the licensee when the appeal is allowed. In the earlier round of litigation, refund of statutory deposit along with interest at the rate Patil-SR (ch) 12 of 15 wp 14216-23 & 8467-23.doc of 16% was allowed by wrongly invoking Section 127(6) of the Electricity Act, 2003 which is a provision of imposing interest at the rate of 16% where the consumer defaults in making payment of assessed amount. The said provision was clearly inapplicable to a case where the refund of the statutory deposit is directed upon the appeal succeeding.
17. The issue as regards the payment of interest on the statutory deposit at the rate of 16% stood concluded by order of this Court dated 5th February 2020 which was not challenged by either of the parties. The Petitioner-consumer is seeking a direction to the Respondent-Company to pay interest at the rate of 16% per annum on the deposited amount of Rs.49,08,150/- calculated from the date of deposit i.e. 16th October 2014 till the date of refund / realisation. As this Court has already held that imposing interest on the statutory deposit by the Respondent is not justified and has also held inapplicable the provisions of Section 127(6) of the Electricity Act, 2003, the prayer clause (b) which seeks the same relief which has been held to be inapplicable by this Court in the earlier round of litigation cannot be granted.
18. What was held not to be justified by the order dated 5 th February, 2020 was the interest on the statutory deposit upon Appeal succeeding by invoking Section 127(6) of the Electricity Act, 2003 which Patil-SR (ch) 13 of 15 wp 14216-23 & 8467-23.doc apply to a defaulter of payment of assessed amount. However, in the present case the appellate authority by order dated 4 th October 2022 has passed the final order, which reads thus :
"(1) Appellant's appeal is granted.
(2) The final assessment orders given by the Respondent are cancelled.
(3) The 50% amount paid by the Appellant should be refunded by the Respondent to the Appellant immediately. (4) The Respondent should refund the interest amount of Rs.50,499/- charged by the Respondent to the Appellant on the disputed amount.
(5) The order to be implemented within 30 days from the date of receipt of order.
(6) The appeal is disposed off."
19. Clause (5) of the order of Appellate Authority directed the order to be implemented within a period of 30 days from the receipt of order. The period of 30 days expired on 3 rd November, 2022. Despite the order passed by the Appellate Authority, Respondent-Company did not refund the amount and has preferred the present proceedings. Even in this Court it is not demonstrated that the amount of statutory deposit was deposited in this Court and therefore Clause (5) of the order remained unimplemented by the Respondent-Company. Once the appeal succeeds and the Appellate Authority directs the Respondent-Company to refund the amount of statutory deposit and the interest amount charged on the disputed amount within a period Patil-SR (ch) 14 of 15 wp 14216-23 & 8467-23.doc of 30 days, after the expiry of period of 30 days the statutory deposit loses its character as a statutory deposit and becomes an amount due and payable by the Respondent-Company to the Petitioner-consumer which will attract the provisions of Section 62(6) of the Electricity Act, 2003 which reads thus :
"62. Determination of tariff-- (1)....
(2)....
(3)....
(4)...
(5)....
(6) If any licensee or a generating company recovers a price or charge exceeding the tariff determined under this section, the excess amount shall be recoverable by the person who has paid such price or charge along with interest equivalent to the bank rate without prejudice to any other liability incurred by the licensee."
20. The amount being an amount which was directed to be paid and not having been paid, is liable to carry interest equivalent to the banking rate. As the order was not implemented, 50% amount deposited by the Petitioner-consumer with the Respondent-Company and the interest amount of Rs.50,099/- charged by the Respondent- Company on the disputed amount to carry interest at the rate of 6% per annum from 3rd November, 2022 till payment or realisation.
21. In the light of above Writ Petition No.14216 of 2013 is allowed in above terms and Rule is made absolute accordingly. Writ Petition No. 8467 of 2013 is dismissed and Rule stands discharged.
[Sharmila U. Deshmukh, J.]
Patil-SR (ch) 15 of 15
Signed by: Sachin R. Patil
Designation: PS To Honourable Judge
Date: 24/09/2024 19:54:15