Kerala High Court
The Managing Director vs The Assistant Engineer on 18 July, 2007
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM
FRIDAY, THE 25TH DAY OF OCTOBER 2013/3RD KARTHIKA, 1935
WP(C).No. 20855 of 2013 (F)
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PETITIONER :
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THE MANAGING DIRECTOR
HOTEL INDRAPRASTHA
(A DIVISION OF MUTHUVELAN SONS PVT LTD)
ENGLISH CHURCH ROAD
PALAKKAD - 678 001
BY ADVS.SRI.SHYAM PADMAN
SRI.A.RANJITH NARAYANAN
SRI.S.K.SAJU
SMT.A.SIMI
RESPONDENT(S) :
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1. THE ASSISTANT ENGINEER
ELECTRICAL SECTION, SULTHANPET,
PALAKKAD - 678 012.
2. KERALA STATE ELECTRICITY BOARD,
REP. BY ITS SECRETARY, VYDYUTHI BHAVAN, PATTOM
THIRUVANANTHAPURAM - 695 004
R1 & R2 BY ADVS. SRI.T.R.RAJAN, SC, K.S.E.B.
SMT.NAZEEBA O.H., SC
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25-10-2013,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Mn
...2/-
WP(C).No. 20855 of 2013 (F)
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APPENDIX
PETITIONERS' EXHIBITS :
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EXHIBIT P1 TRUE COPY OF THE ORDER OF THE HON'BLE SUPREME COURT OF
INDIA DATED 18-07-2007 IN SPECIAL LEAVE TO APPEAL (CIVIL)
NO. 11808/2007.
EXHIBIT P2 TRUE COPY OF THE SHORT ASSESSMENT BILL WITH COVERING
LETTER DATED 19-04-2012 CLAIMING RS.2,24,93,133/-.
EXHIBIT P3 TRUE COPY OF THE COMMUNICATION DATED 07-05-2012 ISSUED BY
1ST RESPONDENT REVISING THE CLAIM TO RS.66,22,877/-.
EXHIBIT P4 TRUE COPY OF THE PETITION IN OP NO 13/2012-13 FILED BEFORE
THE CONSUMER GRIEVANCE REDRESSAL FORUM, KOZHIKODE.
EXHIBIT P5 TRUE COPY OF THE STATEMENT OF DEFENCE DATED 25-05-2012
FILED BEFORE THE CONSUMER GRIEVANCE REDRESSAL FORUM,
KOZHIKODE BY THE 1ST RESPONDENT.
EXHIBIT P6 TRUE COPY OF THE BILL DATED 14-05-2012 FOR RS.66,22,877/-
CLAIMING TO BE FOR SUPPLY OF ELECTRICAL ENERGY DURING
10/2000 TO 10/2003 ISSUED BY THE RESPONDENT BOARD.
EXHIBIT P7 COPY OF THE ORDER DATED 27.6.2012 IN OP NO. 13/2012-13 OF THE
CGRF, KOZHIKODE.
EXHIBIT P8 TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 27-07-2012 IN
APPEAL PETITION NO. P/295/2012 FILED BEFORE THE STATE
ELECTRICITY OMBUDSMAN.
EXHIBIT P9 TRUE COPY OF THE STATEMENT OF DEFENCE DATED 14-08-2012
SUBMITTED BEFORE THE OMBUDSMAN BY THE 1ST RESPONDENT.
EXHIBIT P10 TRUE COPY OF THE REJOINDER DATED 01-09-2012 FILED BY THE
PETITIOENR BEFORE THE STATE ELECTRICITY OMBUDSMAN
WITHOUT ANNEXURES.
EXHIBIT P11 TRUE COPY OF THE ORDER DATED 16-07-2013 IN APPEAL PETITION
NO. P/295/2012 OF THE STATE ELECTRICITY OMBUDSMAN.
EXHIBIT P12 TRUE COPY OF NOTICE DATED 24-07-2013 ENCLOSING A NEW
INVOICE FOR RS.66,22,877/-.
EXHIBIT P13 TRUE COPY OF THE UNDERTAKING DATED 16-10-1999.
(Contd...)
WP(C).No. 20855 of 2013 (F)
EXHIBIT P14 TRUE COPY OF THE COMMUNICATION DATED 08-10-2003 ISSUED BY
THE DEPUTY CHIEF ENGINEER, ELECTRICAL CIRCLE, PALAKKAD.
EXHIBIT P15 THE TRUE COPY OF THE REPRESENTATION DATED 18-12-2012
SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.
EXHIBIT P16 THE TRUE COPY OF THE REPLY DATED 26-12-2012 ISSUED BY THE
DEPUTY CHIEF ENGINEER
RESPONDENT(S)' EXHIBITS :
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EXHIBIT R(1)(a) COPY OF THE UNDERTAKING DATED 16.10.1999 SUBMITTED BY
PETITIONER.
EXHIBIT R(1)(b) COPY OF THE STATEMENT OF FACTS DATED 14/8/2012 FILED BY
THE ASSISTANT EXECUTIVE ENGINEER, ELECTRICAL SUB DIVISION,
SULTANPET PALAKKAD IN THE APPEAL PETITION NO. P/295/2012 ON
THE FILES OF THE STATE ELECTRICITY OMBUDSMAN.
EXHIBIT R(1)(c) COPY OF THE ARGUMENT NOTES DATED 15/2/2013 FILED BY THE
ASSISTANT EXECUTIVE ENGINEER, ELECTRICAL SUB DIVISION,
SULTANPET PALAKKAD IN THE APPEAL PETITION NO. P/295/2012 ON
THE FILES OF THE STATE ELECTRICITY OMBUDSMAN.
EXHIBIT R(1)(d) COPY OF THE JUDGMENT OF THIS HON'BLE COURT REPORTED IN
1995 (2) KLT167 SOUTHERN INDIA MARINE PRODUCTS CO VS.
KSEB.
//TRUE COPY//
P.A. TO JUDGE
Mn
C.K. ABDUL REHIM, J.
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W.P.(c) No. 20855 OF 2013-F
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DATED THIS THE 25th DAY OF DECEMBER, 2013.
J U D G M E N T
The issue involved has got a chequered history. The petitioner is the Managing Director of a Hotel, opened in the year 1985, which was provided with a Low Tension (LT) electric connection. The connection was converted into High Tension (HT) category under the commercial tariff, with effect from 22.10.2003. While continuing under LT category, the petitioner was charged only under the Industrial Tariff (LT IV) based on a policy declared by the Central Government to promote tourism. Later the Kerala State Electricity Board (hereinafter referred as "the Board") had withdrawn the concession, which was subject matter of challenge before this Court in a writ petition. During pendency of the said writ petition, the State Government had issued an order on 26.09.2000, modifying the concession and limiting it only for a period of five years. In fact the Government had ratified withdrawal of the W.P.(c) No.20855/2013 -2- concession which was availed for the period after five years, with retrospective effect. This Court disposed of the writ petition noticing the Government Order, reserving liberty to the petitioner to challenge the Government Order. The Government Order dated 26.09.2000 was having the effect of withdrawing the concession availed by the petitioner, with effect from 15.10.1999. The petitioner challenged the Government Order in W.P.(C).No.17151/2007. The dispute went up to the honourable Supreme Court. A batch of Civil Appeals, including one filed by the petitioner, were disposed of through judgment dated 16.05.2008 reported as Kusumam Hotels (P) Ltd v. Kerala State Electricity Board [2008(3) KLT 276 (SC)]. It was held that the Government Order dated 26.09.2000 can have only prospective operation. All along while pursuing the litigations the demand for payment of the differential amount was under stay. Consequent to decision in Kusumam Hotels' case (cited supra) liability for payment of the differential amount in the case of the petitioner was W.P.(c) No.20855/2013 -3- reduced for the period from 26.09.2000 to 23.10.2003 (up to the date on which connection was changed into HT category). For an easy reference the said period can be termed as 10/2000 to 10/2003.
2. Even though Kusumam Hotels' case (supra) was decided on 16.05.2008, the respondents issued Ext.P2 notice demanding payment of the differential amount, only on 19.04.2012. By virtue of Ext.P3 the amount demanded in Ext.P2 was revised and reduced to `66,22,877/-. This said demand was challenged by the petitioner before the Consumer Grievance Redressal Forum, Kozhikode (herein after referred as "CGRF"). The CGRF had disposed the matter through Ext.P7, holding that the liability stands settled through decision of the hon'ble apex court and the Forum is restrained from intervening in the matter. Aggrieved by Ext.P7 the petitioner preferred appeal before the State Electricity Ombudsman (hereinafter the "Ombudsman" for short). Various contentions were raised on the ground of limitation against Exts.P2 and P3 W.P.(c) No.20855/2013 -4- demands. The appeal was disposed of through Ext.P11 order. It is challenging the findings contained in Ext.P11, this writ petition is filed. The main relief sought for is a declaration that the demand in Ext.P2 is barred by limitation in view of the provisions contained in Section 56 (2) of the Electricity Act, 2003, read with Regulation 18(8) of the Kerala Electricity Supply Code, 2005.
3. Heard; Counsel for the petitioner and Standing Counsel appearing for the respondents. One of the contention raised is that, the Ombudsman having found that there was failure on the part of the CGRF to consider challenges raised on the ground of limitation, it ought to have remanded the matter for fresh disposal. Instead, decision taken by the Ombudsman to deal with the issue at the appellate stage, was not justified. Referring to Regulation 22(b) of the Kerala State Electricity Regulatory Commission (CGRF and Ombudsman) Regulations, 2005, the Ombudsman found that, the consumer can approach the Ombudsman even if the dispute is not decided by the CGRF W.P.(c) No.20855/2013 -5- within the time frame stipulated. Therefore Ombudsman found that, the petitioners argument regarding loss of opportunity at the lower forum, cannot be sustained. The authority of Ombudsman is vested with appellate powers against any order passed by the CGRF. As such the powers are co-extensive with that of the CGRF. Therefore this Court finds no illegality, irregularity or injustice in the decision of the Ombudsman in dealing with the matter on merits instead of remanding for fresh disposal by the CGRF.
4. On the question of limitation under Section 56(2) it is to be noted that the petitioner had raised a similar issue before the Honourable Supreme Court. While deciding the matter in Kusumam Hotels' case it was held as follows :
"30. We, however, are not in a position to accept the contention that the Bills could not have been issued having regard to sub-s.(2) of S.56 of the Act. Appellants herein have incurred liabilities.
Sub-s.(5) of S.185 of the Electricity Act, 2003 reads, thus :
"(5) Save as otherwise provided in sub-s.(2), the mention of particular matters in that section, shall not be held to prejudice or affect the general W.P.(c) No.20855/2013 -6- application of S.6 of the General Clauses Act, 1897 (10 of 1897), with regard to the effect of repeals."
Whereas the bills are issued only in respect of the dues arising in terms of the law as was applicable prior to the coming into force of 2003 Act, sub-s.(2) of S.56 shall apply after the said Act came into force. The Board could have even framed a tariff in terms of the provisions appended to S.61 of the Act. Appellants incurred liability to pay the bill. The liability to pay electricity charges is a statutory liability. The Act provides for its consequence. Unless, therefore, the 2003 Act specifically introduced, the bar of limitation as regards the liability of the consumer incurred prior to coming into force of the said Act. In our opinion, having regard to S.6 of the General Clauses Act, the liability continues. (See Southern Petrochemical Industries Co. Ltd v. Electricity Inspector and E.T.I.O & Ors. ((2007) 5 SCC 447))"
Hence it is conclusively decided that the dues arose at a time when Indian Electricity Act, 1910 was applicable and hence Section 56 (2) of Electricity Act, 2003 cannot have any application on the question of limitation. But learned counsel for the petitioner pointed out that the plea of W.P.(c) No.20855/2013 -7- limitation is raised on the basis that there occurred delay of more than 2 years from the date of the judgment of the apex court, and Ext.P2 notice was issued only on 19-04-2012. It is evident that the demand for payment of differential amount was raised on the basis of withdrawal of the concession by the Board which was in effect ratified through Government order dated 26-09-2000. Therefore it is evident that the amount became due during the period 1999-2000. It was also revealed from the facts that demand for payment of the differential amount on the basis of decision of the Board and the Government was issued at that time itself. But the petitioner was fighting out the liability in various litigations filed before this court and the apex court. All along during litigation the petitioner was successful in getting interim orders against realisation. That being the position, question arose as to which is the date when the amount became first due under Section 56 (2). It is settled legal postilion that the date when the same became first due is the date on which the demand is issued for payment of the amount for the first W.P.(c) No.20855/2013 -8- time. In the case at hand the said demand was raised as early as during 1999-2000. But the demand could not be enforced because of interim order secured by the petitioner from this court and from the hon'ble Supreme Court. Therefore the contention that it became first due on the basis of the decision of the Hon'ble Supreme Court on 16-05-2008, cannot be accepted. There arise no question of such sum being shown continuously as recoverable arrears, because the dispute was pending in litigation between parties. Decision of the Hon'ble Supreme Court has only the effect of crystalising the liability for a limited period, as stipulated in the judgment in Kusumam Hotel's case. The plea on the basis of alleged failure to show the same continuously as recoverable arrears cannot be sustained in view of the above position. By virtue of the judgment, no new liability has been created. Therefore with respect to the liability which arose during when the Electricity Act, 2003 was not in force, the question of limitation cannot be pleaded as already held by the Hon'ble apex court. W.P.(c) No.20855/2013 -9-
5. Learned counsel further contended that, even assuming that there is no bar of limitation, there was failure on the part of the respondents in making the demand within any reasonable time. Hence the impugned action is totally unreasonable and arbitrary. He made reference to various judgments in support of the above contention. But on the facts of the case at hand, such a contention cannot be countenanced. The petitioner was fighting out the liability all along and he was well aware of the liability being finalised by virtue of decision of the Hon'ble Supreme Court.
6. The petitioner had also raised contentions based on the provisions contained in the Limitation Act, to challenge the recovery, on the ground that the arrears cannot be recovered after a period of 3 years. Learned counsel made attempts to distinguish the decisions rendered by this court in the Inspector, Toddy Workers Welfare Fund Board V. M.S. Vijayan and others (2009 (1) KHC 465 (DB) inorder to content that the W.P.(c) No.20855/2013 -10- relevant provision applicable is Article 112 and not Article
113. It is contended that even the amount cannot be recovered by resorting the provisions of the Revenue Recovery Act, after a period of 3 years. But those contentions do not germane for consideration in view of the fact that the challenge in this writ petition is not against any steps of revenue recovery initiated. Therefore it is made clear that the Board will be at liberty to take appropriate steps as permissible under law if there is failure to make payment of the amounts.
7. Having confronted with the above position, learned counsel for the petitioner made an appeal to this court for indulgence in relaxing the period of installment facility granted by the Ombudsman through Ext.P11. In Ext.P11 the amount was permitted to be paid in 13 monthly installments. The first installment falling due within 30 days of receipt of the said order. But the Ombudsman insisted that the subsequent installments will carry interest at the rate applicable. The above stipulation, according to the W.P.(c) No.20855/2013 -11- learned counsel for the petitioner, is totally unjustifiable. The Ombudsman had exempted the petitioner from liability for payment of interest for the period during which the appeal was pending. Therefore when the Ombudsman had decided to grant installment facility, there could not have any insistence for payment of interest, is the contention. Learned counsel apprised that the liability for payment of interest in 13 installments itself is casting a huge liability of more than Rs.5 lakhs per month. Being a running Hotel the petitioner is finding it difficult to make payment of such a huge amount on a regular basis. It is conceded on behalf of the petitioner that if indulgence is shown by this court in granting relaxation in the period of installment facility and granting waiver of payment of interest during such period, the petitioner will be satisfied and that they will not pursue any further litigation challenging the liability.
8. Considering the over all circumstances prevailing, I am inclined to show indulgence in the matter on the basis of principles of equity. Considering the fact that the W.P.(c) No.20855/2013 -12- Ombudsman had exonerated the petitioner from the liability for payment of interest till the date of disposal of the appeal, and considering the payments of installments already made by virtue of interim order of this court dated 21-10-2013, the petitioner can be exonerated from the liability for payment of interest.
9. Under the above mentioned circumstances the petitioner is permitted to make payment of the balance amount outstanding out of Ext.P2 demand, without payment of any interest, in 10 equal monthly installments, starting on or before the 15th January 2014 and on or before the 15th day of the succeeding months.
10. If the petitioner defaults payment of any two consecutive installments, the facility granted will become cancelled and the petitioner will be liable for payment of interest calculated on the amount from the date of order of the Ombudsman onwards.
Sd/-
C.K. ABDUL REHIM, JUDGE.
AV/AMG True copy P.A to Judge