Patna High Court - Orders
M/S Power Grid Corporation Of India Ltd. vs The Bihar Power Holding Co.Ltd. & Ors on 9 October, 2014
Author: Jyoti Saran
Bench: Jyoti Saran
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.9362 of 2014
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M/s Power Grid Corporation of India Limited, a Company incorporated
under the provisions of the Companies Act, 1956, having its registered
office at Qutab Institutional Area, Katwaria Sarai, New Delhi- 110016,
having one of its Grid at Dariyapur Kafen, P.S. Turki, District Muzaffarpur,
through its Dy. General Manager Ajit Kumar, aged about 50 years, son of
Sh. Chandra Chur Deo, resident of village- Deeha, P.S. Sadpur, P.S.
Sahebpur Kamal, District Begusarai
.... .... Petitioner/s
Versus
1. The Bihar State Power (Holding) Company Limited, Vidyut Bhawan,
Bailey Road, Patna through its Chairman-cum-Managing Director
2. The North Bihar Power Distribution Company Limited, Vidyut Bhawan,
Bailey Road, Patna through its Managing Director
3. The Electrical Executive Engineer, Electric Supply Division,
Muzaffarpur
4. The State of Bihar, through the Principal Secretary, Energy Department,
Government of Bihar, Patna
.... .... Respondent/s
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with
Civil Writ Jurisdiction Case No.9363 of 2014
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M/s Power Grid Corporation of India Limited, a Company incorporated
under the provisions of the Companies Act, 1956, having its registered
office at Qutab Institutional Area, Katwaria Sarai, New Delhi-110016,
having one of its Grid at Village- Maranga, P.S. Maranga, District Purnea,
through its Chief Manager, A.C. Das, aged about 51 years, son of Sh.
Shyamal Das, resident of village- Tezpur, P.O. Tezpur, District- Sonitpur
.... .... Petitioner/s
Versus
1. The Bihar State Power (Holding) Company Limited, Vidyut
Bhawan, Bailey Road, Patna through its Chairman-cum-Managing
Director
2. The North Bihar Power Distribution Company Limited, Vidyut
Bhawan, Bailey Road, Patna through its Managing Director
3. The Electrical Executive Engineer, Electric Supply Division, Purnea
4. The State of Bihar, through the Principal Secretary, Energy
Department, Government of Bihar, Patna
.... .... Respondent/s
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Appearance:
(In CWJC No.9362 of 2014)
For the Petitioner/s : Mr. Y.V. Giri, Sr. Adv.
Mr. Suraj Samdarshi, Adv.
Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 2
For the Respondent nos. 1 to 3 : Mr. Rajeev Ranjan Prasad, Adv
For the Respondent No. 4 : Mr. P.N. Sahi AAG-10
(In CWJC No.9363 of 2014)
For the Petitioner/s : Mr. Y.V. Giri, Sr. Adv.
Mr. Suraj Samdarshi
For the Respondent nos. 1 to 3 : Mr. Rajeev Ranjan Prasad, Adv.
For the Respondent no. 4 : Mr. Anshuman Singh- GP 24
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CORAM: HONOURABLE MR. JUSTICE JYOTI SARAN
ORAL ORDER
8 09-10-2014The petitioner in the two writ applications is a Government Company under section 617 of the Companies Act engaged in transmission of electricity through inter-state transmission system.
Since the two writ petitions involve the same petitioner and raise a common issue of law and fact, hence they have been taken up together with a view to its final disposal.
The petitioner in CWJC No. 9362 of 2014 has prayed for the following reliefs:-
(i) For quashing of the order dated 29.3.2014 issued by the respondent Electrical Executive Engineer in purported exercise of power conferred under Section 126 of the Electricity Act, 2003, treating the use of energy from the Grid for the substation and auxiliary consumption including housing colony for the operating staff by the petitioner, as unauthorized use of energy.
(ii) For quashing of the order dated 22.4.2014 passed by the respondent Electrical Executive Engineer, purported to be the Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 3 final assessment order under Section 126 of the Electricity Act, 2003 whereby and where under the provisional assessment order has been affirmed contrary to law.
(iii) For a declaration that the use of energy by the petitioner, which is a Central Transmission Utility, to undertake the statutory functions under section 38 read with section 2(72) and (73) of the Electricity Act, 2003 and read with the Electricity (Removal of Difficulty) Seventh Order, 2005 is duly authorised the use of energy.
(iv) For a direction to the respondent authorities not to take any coercive step for realization of the demand as assessed under Section 126 of the Electricity Act, 2003 to the extent of Rs. 55, 54, 18, 593/- or otherwise in regard to the use of energy by the petitioner from the Grid.
(v) For a direction to the respondent authorities, particularly the licensee North Bihar Power Distribution Company Limited not to disconnect the electric supply of the petitioner which may lead to power failure not only within the State of Bihar but also the adjoining regions; and for any other relief or reliefs to which the petitioner is found entitled.
Identical prayer has been made in the second writ Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 4 petition bearing CWJC No. 9363 of 2014 except for the date of the order and the liability created and which runs as follows :-
(i) For quashing of the order dated 28.3.2014 issued by the respondent Electrical Executive Engineer in purported exercise of power conferred under Section 126 of the Electricity Act, 2003, treating the use of energy from the Grid for the substation and auxiliary consumption including housing colony for the operating staff by the petitioner, as unauthorized use of energy.
(ii) For quashing of the order dated 22.4.2014 passed by the respondent Electrical Executive Engineer, purported to be the final assessment order under Section 126 of the Electricity Act, 2003 whereby and where under the provisional assessment order has been affirmed contrary to law.
(iii) For a declaration that the use of energy by the petitioner, which is a Central Transmission Utility, to undertake the statutory functions under section 38 read with section 2(72) and (73) of the Electricity Act, 2003 and read with the Electricity (Removal of Difficulty) Seventh Order, 2005 is duly authorised the use of energy.
(iv) For a direction to the respondent authorities not to take any coercive step for realization of the demand as assessed under Section Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 5 126 of the Electricity Act, 2003 to the extent of Rs. 75,51,73,788/- or otherwise in regard to the use of energy by the petitioner from the Grid.
(v) For a direction to the respondent authorities, particularly the licensee North Bihar Power Distribution Company Limited not to disconnect the electric supply of the petitioner which may lead to power failure not only within the State of Bihar but also the adjoining regions; and for any other relief or reliefs to which the petitioner is found entitled.
Whereas CWJC No. 9362 of 2014 relates to the assessment made with regard to the Muzaffarpur division, CWJC No. 9363 of 2014 is relatable to the Electricity Supply Division, Purnea.
As mentioned above the issues raised are common in both the writ petitions, and thus, for the sake of convenience I shall be referring to the pleadings made in CWJC No. 9362 of 2014 unless clarified with specific reference to the second writ petition.
Mr. Y.V. Giri, learned Senior Counsel assisted by Mr. Suraj Samadarshi has appeared for the petitioner in the two writ petitions while the Power Holding Company has been represented Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 6 by Mr. Rajiv Ranjan Prasad, advocate assisted by Mr. Nilanjan Chatterjee and the State is represented by Mr. P.N. Shahi, Additional Advocate General No. 10 assisted by Mr. Mrityunjay Kumar and in the second writ petition Mr. Anshuman Singh, Government Pleader No. 24 who appears alongwith Mr. Siddharth Shankar Pandey, advocate.
Since a preliminary objection was raised as to the maintainability of the writ petition by learned counsel appearing for the Power Holding Company inter alia on grounds that the final assessment order put to challenge in the writ petitions are appealable under Section 127 of the Electricity Act, 2003 (hereinafter referred to as 'the Act') hence Mr. Giri addressed the Court also on the issue of maintainability while assailing the actions on merits.
Mr. Giri while conceding to the fact that a writ remedy would not ordinarily be available to an aggrieved for questioning a final order of assessment without taking recourse to the appellate remedy available, submitted that the issue in the present case is otherwise and since the very jurisdiction of the authorities to raise any bill muchless under Section 126 of the Act has been put to question which goes to the root of the matter, hence the petitioner is not precluded to invoke the writ jurisdiction of this Court. In Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 7 order to demonstrate that the provisional assessment order as well as the final assessment order are wholly without jurisdiction, Mr. Giri began his argument by referring to the statutory provisions which included the definition of 'electrical plant' as found in section 2 (22), the definition of 'electricity' found in section 2(23), the definition of 'licence' found in Section 2(38), the definition of 'supply' found in section 2(70), the definition of 'transmission lines' found in section 2(72), the definition of 'transmission licensee' found in section 2(73), the constitution of 'Central Electricity Authority' under section 70, the functions and duties of the Central Electricity Authority as described in section 73, the provisions relating to assessment found at section 126, the power to remove difficulties found at section 183 and the provision relating to notification of a Central Transmission Utility alongwith its functions found at section 38 of the Act.
Mr. Giri, with reference to the definition of a 'Transmission Licensee' found in section 2(73) of the Act submitted that the function of a 'transmission licensee' is in the character of the transporter who transports electricity between the generating company to the distribution licensee and for the purpose operates the transmission lines which means all high pressure cables and overhead lines transmitting electricity from a Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 8 generating station to another generating station or sub-station together with step-up and step-down, transformers, switch gears and other works necessary for control of such cables and overhead lines including building or part thereof required for accommodating such transformers, switch gears and other works. It was stated that the generating Company supplies the Electricity at a level of 4 lakh volts and which is stepped-down by the 'transmission licensee' to 2.20 lakh volts/1.32 lakh volts before it is placed in the custody of power holding company. It was contended that the petitioner was notified as a Central Transmission Utility as defined under section 27A of the Indian Electricity Act, 1910 and which notification stands saved under section 185 of the present Act. The notification issued under section 27A (1) of the Indian Electricity Act, 1910 notifying the petitioner-company as a Central Transmission Utility is placed at Annexure-1 to the writ petition. With reference to sub-section (2) of Section 38 of the Act, it was submitted that the functions of a Central Transmission Utility has been detailed thereunder. Learned counsel for the petitioner sought to impress that it is the duty of a Central Transmission Utility to maintain a continuous flow of electricity and a sub-station is a necessary part of such exercise. It was submitted that the petitioner-company has to Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 9 ensure that there is an uninterrupted power supply to the Grid Sub-station and although these Grid sub-stations are also consumers of the distribution company but to ensure uninterrupted power supply to these Grid Sub-stations, the petitioner draws electrical energy directly from the transmission lines through a tertiary source. It was contended that this drawal of energy is a part and parcel of the transmission duty of the petitioner because in case of a power shortage / disruption at the Grid Sub-station, the entire transmission within the State and beyond that would come to a halt. It was the contention of the learned counsel that in the process though there is a miniscule transmission loss of electricity but not only the same is accounted for in the fixation of tariff, even otherwise, it would be very much within the permissible limits. With reference to Annexure-3, it was submitted that the Grid Code has been framed under section 177(2) read with section 7 and section 73(b) of the Act. Referring to the provisions underlying Section 183 of the Act, it was submitted that the Central Government has also framed the Electricity (Removal of difficulty) 7th order, 2005 placed at Annexure-2 and paragraph-2 thereof provides that the 'transmission licensee' would not be required to obtain license for supply of electricity to the Grid Sub- Station or the housing colony of the operative staff located in the Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 10 premises of the sub-stations which would be an integral part of the activity of transmitting electricity.
It was with reference to the statutory provisions submitted that the issue raised by the petitioner is, whether the distribution company can validly raise any electricity bill for the drawal of the energy by the petitioner for maintenance of its sub- stations and housing colonies and whether such consumption would fall within the purview of Section 126(6) of the Act. Referring to the explanation attached to the said provision, it was stated that the term 'unauthorized use of electricity' has been defined thereunder and since the drawal of the energy by the petitioner did not fall within any of the clauses constituting an unauthorized use of electricity as explained under Clause (b) of the explanation, hence no tariff would be applicable for such usage of energy through tertiary source. With reference to the grid regulations the complete copy whereof has been placed at Annexure-12 to the supplementary rejoinder and with particular reference to clause-6 of part-III thereof he has submitted that the regulations specifically make provision for power supply to sub- station for auxiliary use from two sources as a standby to the other and in addition thereto, maintaining emergency supply through diesel generating set.
Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 11
Mr. Giri next referred to some of the minutes of the meeting of the Eastern Regional Power Committee placed at Annexure- 14 series to submit that the issue of drawal of energy through tertiary means by the petitioner did come up for consideration and the members attending which included the distribution company in the Eastern Region, were required to consider the matter. According to Mr. Giri appearing for the petitioner, not only the transmission loss caused, if any, is accounted for in the framing of tariff even otherwise, the effect of such consumption is very negligible in comparison to the transmission and distribution loss accepted by the Bihar Electricity Regulatory Commission in the case of State Transmission Utility which ranges between 25-40 percent. According, to learned counsel in the case of the petitioner the transmission loss on such consumption would not exceed 0.05 percent. Learned counsel with reference to the minutes of the meeting held on 12.3.2014 by the Central Electricity Authority placed at Annexure-6 submits that the predicament of the petitioner regarding unreliable supply to the grid sub stations and for auxiliaries has been given serious consideration. With reference to Annexure- 9 which is the minutes of a meeting held on 16.04.2014 in which the Chairman-cum-Managing Director of Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 12 the holding company, the distribution company and the transmission licensee and the petitioner participated, the petitioner again invited the attention towards the unreliability of the power supply to the grid sub-stations.
Learned counsel with reference to Annexure-11 which again is a minute dated 28.04.2014 of the meeting held by Central Electricity Authority submitted that whereas the distribution company themselves expressed no objection to the usage of tertiary winding from the inter-connected transformer for power supply to the auxiliaries of the sub-station, the only objection raised was towards the supply to the township and the schools which also are part of the grid sub-stations. With reference to the objection raised by the petitioner to the provisional assessment placed at Annexure-15, it was stated that it was a specific case of the petitioner that the tertiary usage from the inter-connected transformer was not a case within the purview of section 126 of the Act.
The sum and substance of argument of Mr. Giri has been that being a central transmission utility, it has a duty of maintaining continuous transmission and for the purpose the petitioner is required to ensure a continuous supply to its grid sub- stations and since the power supply by the distribution company Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 13 to these sub-stations and its auxiliary units are highly unreliable hence the petitioner has made the alternative arrangement by tertiary usage from the inter-connected transformers which suffers from no illegality in as much as, whereas the petitioner is lawfully entitled to have an independent source of supply of electricity to its grid station auxiliaries, even the stage at which the drawal is made, the transmission has not reached the distribution licensee for raising any bill and in any event since the consumption is for maintaining the continuous supply it should be treated as a miniscule transmission loss to be accounted for while fixing tariff. The concluding argument of Mr. Giri is that such consumption of energy in no circumstance can be held either unauthorized or through unauthorized means for inviting penal assessment under Section 126 of the Act.
Learned counsel in support of his submissions on the maintainability of the writ petitions as well as on the jurisdictional error of the respondents in passing the impugned assessment order, has relied upon the following judgments:
1. (2012) 2 SCC 108 (Southern Electricity Supply Co. of Orissa Ltd. vs. Sri Seetaram Rice Mill); paragraph 5, 6, 10 and 12, 79 to 86 and 89
2. (2007) 9 SCC 593 (Popcorn Entertainment and another vs. City Industrial Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 14 Development Corpn); paragraph 17 to 23 and 47
3. (2011) 5 SCC 697; (Union of India and others vs. Tantia Construction Private Limited) paragraph 33 and 34 Mr. Rajiv Ranjan Prasad has appeared for the respondent Holding Company as well as respondent nos. 2 and 3 to contest the prayer made in the writ petition. Reiterating his preliminary objection regarding maintainability of the writ petition it was submitted that once the order of final assessment has been passed as impugned at Annexure-7 to the writ petition, the appropriate forum for the petitioner would be to approach the appellate remedy provided under Section 127 of the Act inasmuch as there is no error in the exercise of jurisdiction by the assessing authority in passing the order of assessment and any infirmity therein can well be tested before the appellate forum. In support of his submission learned counsel has relied also upon a judgment of the Supreme Court rendered in the case of Southern Electricity Supply Co. (supra) and to submit that unless there is any dispute on the exercise of jurisdiction by the assessing authority ordinarily such matters should not be entertained by a writ court in view of the alternative remedy available.
Proceeding to contest the writ petitions on its merits, it Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 15 was submitted that the drawal of energy is at the Stage of Inter Connected Transformers (I.C.T for the sake of brevity) which is installed to step down the electricity for the purpose of its availability to the Holding Company for its distribution through the distribution companies. It was submitted that the moment the primary supply is stepped down as per the demand / requirement of the Holding Company, the transmission licensee would be committing an illegality in drawing the energy at that stage through a tertiary winding and even if it is for the purpose of running the sub-stations and its auxiliaries, it cannot be done without the prior permission and approval of the holding /distribution companies and any drawal made by the transmission licensee without such permission / approval, would be a consumption by unauthorized means. It was the contention of Mr. Prasad that the stepping down of the energy by the transmission company is for the purpose of making the power available to the holding / distribution company for its distribution to the consumers through the distribution system and thus any consumption of energy after it has been stepped down by the transmission licensee, be it for whatever purpose, is accountable and chargeable. Learned counsel with reference to the statement made in paragraph-28 of the counter affidavit submits that the Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 16 Chairman cum Managing Director of the petitioner company participated in a discussion held in this regard under the chairmanship of the Chief Secretary, Bihar and in which the consumption through the tertiary winding was not only admitted but he also agreed to pay the bills as per the units consumed but despite the undertaking given to make payment of the energy charges in the meeting held on 26.3.2014, no steps were taken by them. It was contended that in such circumstances the provisional assessment order passed on 23.4.2014 followed by the final assessment order, suffered from no infirmity. It is stated that this statement of the respondents made in paragraph-28 of the counter affidavit has not been denied by the petitioner in his rejoinder. Learned counsel with reference to the objection filed by the petitioner to the provisional assessment, a copy whereof is placed at Annexure-15 to the supplementary rejoinder and is dated 9.4.2014, has submitted that even while questioning the assessment made under Section 126 of the Act, the petitioner has admitted to the payment made towards the energy consumption, to the tune of Rs. 2,29,67,022/- pursuant to the meeting held on 26.3.2014 with the Chief Secretary and the other officials of the Holding Company referred to in paragraph-28 of the counter affidavit. Responding to the reliance of the petitioner at Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 17 Annexure-11 which is the minutes of the meeting held by the Central Electricity Authority in which the representative of the Power Grid Corporation as well as respondent Holding Company as well as distribution company had participated, it was submitted that the opinion of the Central Electricity Authority is not binding especially where it is a question of unauthorized usage of electricity and in any event it is not the stand of the petitioner that the demand is illegal rather what they seek to contend is that the demand by the Holding / Distribution Company is unjust considering that no expense is being incurred by the respondents in such consumption through tertiary windings. With reference to another meeting held on 21.3.2014 by the Central Electricity Authority the minutes of which are placed at Annexure-6, it was stated that a proposal was given by the petitioner themselves in the meeting that the consumption through tertiary winding of the I.C.T. should either be treated as transmission loss or may be billed by the state utility at the energy charge rate without capacity / fixed charges.
Mr. Prasad, learned counsel for the respondents contended that in the accompanying circumstances where the consumption of energy is not denied, the petitioner cannot escape the liability created under the final assessment order and any Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 18 infirmity in the calculation would be a matter to be contested before the appellate forum. Mr. Prasad has also placed on record a graphic detail of the transmission lines until it is handed over to the distribution licensee for its distribution to the consumers after being stepped down, to support his contentions. A similar diagram has also been placed by the petitioner.
Mr. Giri in reply has referred to the Grid regulations placed at Annexure-12 to submit that the consumption of energy by the transmission licensee through the tertiary winding of the I.C.T. is fully authorized in view of the functions that are to be carried out by a Central Transmission Utility detailed at Section 38(2) of the Act and the provisions of the Electricity (Removal of difficulty) 7th Order, 2005. Responding to the argument of Mr. Prasad that the petitioners have all along admitted to their liability to pay for the electricity consumption, learned counsel has relied upon the representation filed by them before the Managing Director of the respondent distribution company on 1.5.2014, a copy whereof is placed at Annexure-8 to the writ petition and with reference thereto it was submitted that the contest was all along there and merely because the petitioners have made certain payments towards the demand raised, it would not divest them of their right to question the demand on its validity. Again reverting Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 19 to the minutes of the meeting held under the chairmanship of the Central Electricity Authority on 21.3.2014 and the Removal of Difficulties Order placed at Annexure-2 it was submitted that there is no question of raising a demand under Section 126 of the Act inasmuch as the consumption can not be termed either unauthorized or through unauthorized means. It was submitted that in view of the grid regulations requiring the petitioner to have alternative means of supply and in view of the Removal of Difficulties Order not requiring the petitioner to obtain license for running the sub-station and housing colony, there was no applicability of Section 126 of the Act and in which circumstance the demand raised under the said provision is illegal and unsustainable and for the same reason these writ petitions are maintainable. He further submits that Section 126(6) of the Act enables the assessing authority to make assessment at the rate of twice of the tariff applicable in cases of unauthorized usage but since there is no tariff framed in matters of consumption through tertiary winding, this provision cannot be made applicable and even if the petitioner can be held to be a defaulter in payment of energy charges, the consumption cannot be termed either unauthorized or through unauthorized means. With reference to the provisions of Section 45 of the Act which deals with the power Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 20 in the distribution company to recover charges, it was submitted that since there is no tariff framed for consumption of energy through tertiary winding, there can be no applicability of Section 126(6) of the Act. Learned counsel while concluding his argument has relied upon the judgment of the Supreme Court reported in (2009) 3 SCC 754 more particularly paragraph-11 and 15 to submit that there cannot be a waiver of a legal right and even if certain payments have been made by the petitioners on misconception of the statutory provisions, it would not preclude them to question the liability itself.
Though the issues raised by Mr. Giri had already been responded to by Mr. Prasad but seeking leave of the Court to respond on the issue of tariff, he submitted that the issue is not of consumption through the tertiary usage rather the issue is whether such consumption is authorized or unauthorized and the moment this fact is established that the applicability of the tariff would be as per the category of the consumer and thus this issue of absence of tariff covering tertiary usage is misconceived.
While I was in the process of drafting my order that an issue crossed my mind and which is that even if a liability is fastened on the petitioner to pay for the consumption of electricity, it is for the first time that the respondents decided to raise a Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 21 demand under Section 126 of the Act only on 28/29.3.2014. Now the issue would be for what period could the respondent company raise any bill in view of the stipulations underlying Section 126(5) of the Electricity Act. The other issue is that even if it is ultimately held that the consumption of electricity by the petitioner is neither unauthorized nor is by unauthorized means, could the respondents raise any bill beyond the period of two years in view of the stipulations underlying Section 56(2) of the Act.
Since the parties had not addressed on the issue of limitation accompanying the demand, this Court deemed it necessary to hear the parties on the issue and the matter was listed for the purpose of 10.9.2014 and on the request of the parties, the issue was addressed on 19.9.2014.
Mr. Giri with reference to Clause-11.1 of the Bihar Electricity Supply Code, 2007 (hereinafter referred to as the 'Supply Code') has submitted that a complete procedure for raising a bill under Section 126 of the Act has been provided and paragraph 11.1(b) thereof relates to provisional assessment which again refers to Annexure-7 which provides for a formula of assessment and which is LFDH, where 'L' is the connected load, 'F' is the load factor, 'D' is the number of days and 'H' is the Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 22 hours of supply. He submits that Section 126(5) of the Act as well as factor 'D' occurring in the formula provided under Annexure-7 to the Supply Code both place a limit of 12 months for raising a bill under Section 126 in such of the cases where the period of unauthorized use cannot be ascertained. Mr. Giri with reference to the 1993 tariff notification submits that the said notification under Clause 16.9(a) provided for a maximum duration of six months in cases where the exact period was unknown and which has now been enhanced to 12 months. Mr. Giri, learned senior counsel drawing analogy from the provisions underlying Section 126 and Section 135 of the Act has submitted that of the two options available to the respondent company to proceed against an erring consumer, a registration of a case under Section 135 of the Act being a harsher of the options available, the determination of a liability in such cases as envisaged under Section 154(5) of the Act restricts the liability to 12 months only or the period of theft whichever is less and thus the enabling provision under Section 126(5) of the Act cannot vest power in the respondents to raise any bill beyond a period of 12 months. Insofar as the provisions of Section 56(2) of the Act is concerned, it was submitted that for invoking such provision, the respondents have to establish that the demand is lawful and there has been Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 23 neglect by the petitioner towards its payment.
Mr. Rajiv Ranjan Prasad, learned counsel appearing on behalf of the respondent Power Holding Company has submitted that there is no limitation to exercise of power under Section 126 of the Act where it is established that the consumer is indulging in unauthorized use of electricity or is found guilty of using electricity by unauthorized means. It is stated that in such of the cases the defaulting consumer would be liable to be assessed for the entire period of default and not restricted to one year. However responding to the provisions of Section 56(2) of the Act it was argued that since no pleading has been made by the petitioner on this issue he does not deem it necessary to address on this issue.
I have heard learned counsel for the parties and I have perused the materials on record and examined the statutory provisions governing the issue.
Although elaborate argument has been advanced by Mr. Giri and Mr. Prasad on the issue in contest but in the opinion of this Court the arguments mainly revolve around the following points:
(a) Whether the petitioner was within his right to draw electricity through tertiary winding of the inter connected transformers (ICT) after the Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 24 stage of stepping down of the power supplied by the generating company;
(b) Whether the petitioner is duly authorised under the provision of Section 38(2) of the Act read with the regulations available at Part-III of the Central Electricity Authority (Technical Standards for connectivity to the Grid Regulation) 2007 placed at Annexure-12 more particularly paragraph-6 thereof as well as the Removal of Defect Seventh Order, 2005 placed at Annexure-2;
(c) Whether the consumption of electricity through tertiary winding of I.C.T., can be termed as unauthorized or through unauthorized means, to be assessed under Section 126 of the Act;
(d) Whether assuming that the orders impugned are valid, can the respondents raise any bill on 29.3.2014 for a period beyond 12 months therefrom in view of the clear bar placed under Section 126(5) of the Act and whether any demand prior to 29.3.2013 is recoverable?
(e) Whether in view of the circumstances discussed in the meetings the minutes whereof are placed at Annexure-6, 9 and 11 to the writ petition and the objection filed by the petitioner against the provisional assessment dated 9.4.2014 placed at Annexure-15 to the supplementary rejoinder, the petitioner can yet avoid the liability by taking refuge under transmission loss?;
Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 25
(f) Whether even if the petitioners are not found liable for assessment under Section 126 of the Act, whether they are liable for payment of the energy charge as per the tariff applicable to the H.T. category to which he belongs or would be limited to the energy consumption in absence of any expenditure incurred by the respondents in making such supply?
Since the entire gamut of the issues raised by the contesting parties would require an answer only if the petitioner would succeed on the issue of maintainability hence I would first be dealing with the issue of maintainability of the writ petition raised by Mr. Prasad appearing for the respondents.
Mr. Prasad has referred to the judgment passed by the Supreme Court in the case of Southern Electricity Supply Company (supra) for objecting to the maintainability of the writ petition. The legal position stands well settled by the Supreme Court and where the petitioner seeks to question an order of assessment on its merits certainly a writ remedy would not be available until he exhausts the statutory remedy available to him. But the case is otherwise here and what the petitioner questions is the very authority of the respondent assessing authority to assess the petitioner under Section 126 of the Act. Since the issue of Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 26 jurisdiction would go to the root of the matter hence I would proceed to discuss the issues on merits.
That the petitioner is a Central Transmission Utility as defined under Section 38 of the Act, is manifest from the notification dated 31.12.1998 placed at Annexure-1 and which stands saved under Section 185 of the Act. The functions of a Central Transmission Utility is defined under Section 38(2) of the Act and unquestionably requires the petitioner to maintain a continuous supply of electricity from the generating stations to the load stations. It cannot be disputed that the responsibility cast upon the petitioner as a Central Transmission Utility is wholesome and is not restricted to the State of Bihar only rather runs across the country. Now for an effective transmission of electricity within the State and across, its grid sub-stations have to function continuously without any power trippings. Part-III of the Grid Regulations present at Annexure-12 relates to Grid connectivity standards applicable to the transmission lines and sub stations and casts certain responsibility on a Central Transmission Utility. Paragraph 6(a) thereof requires the Central Transmission Utility to maintain two high tensions supply from independent sources as a standby to the other and in addition thereto, to keep an emergency supply through diesel generating source, for Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 27 ensuring a continuous operative grid sub stations. Paragraph(2) of the Removal of Difficulty 7th Order, 2005 placed at Annexure-2 exempts a transmission licensee from obtaining a license for supply of electricity inter alia to the grid sub station.
The petitioner has obtained an independent connection from the respondent Power Holding /Distribution Company, which is not in dispute. The dispute is that the petitioner has obtained an alternative supply through a tertiary winding from the inter connected transformer as a standby to the supply obtained by them through the HT connection obtained from the respondent Distribution Company.
Section 2(73) defines a transmission licensee and means a licensee authorized to establish or operate transmission lines. Section 2(72) defines transmission lines and includes all high cables and over head lines (not being a part of the distribution system) transmitting electricity from generating stations to another generating stations or a sub station together with any step up and step down transformer, switch gear and other works.
The petitioner is a transmission licensee and has been notified as a Central Transmission Utility as manifest from Annexure-1, it has a duty to maintain a continuous supply of Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 28 electricity from generating station to another generating station as well as the grid sub station and which includes the step up and step down transformers.
Undoubtedly, the supply of electricity by the generating company at four lakh volts is stepped down by the petitioner at a level of 2.20 lakh volt / 1.32 lakh volt through a step down transformer before it is placed at the hands of the Power Holding Company and which stepping down is as per the requirement of the Holding Company. Thus while a stepping down of the supply is for catering to the needs of the Power Holding / Distribution Company, the process of stepping down through a step down transformer forms a part of the transmission lines operated by the transmission licensee and is an integral part for maintaining a continuous supply within and across the State.
Now whereas it is the stand of the transmission licensee that the drawal of electricity through a tertiary winding from the inter connected transformer is a part of the mandatory duty cast upon the petitioner for maintaining a continuous flow of electricity within and across the State and is in tune with the functions of a Central Transmission Utility provided under Section 38(2) of the Act, it is the stand of the respondents that the moment the supply is stepped down through an inter connected Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 29 transformer it becomes the property of the respondent company and any usage thereafter even by the transmission licensee requires a permission and also casts a duty of payment for the electrical consumption. According to the respondents since neither of the two steps were taken by the petitioner, the drawal of energy through such means would fall within the purview of Section 126 of the Act inasmuch as the petitioner had indulged in consuming electricity through unauthorized means.
The central issue which thus arises is whether such drawal of energy is either unauthorized or is through unauthorized means.
In the opinion of this Court such drawal of electricity being a part of the duty of a Central Transmission Utility in view of the functions defined under Section 38(2) of the Act and the mandatory requirements envisaged under Part-III of the Grid Regulations placed at Annexure-12 requiring the petitioner to maintain an alternative source of supply for effecting a continuous flow of electricity and the definition of transmission lines provided under Section 2(72) of the Act bringing within its purview the step down transformer also, the drawal of energy by the petitioner can neither be held unauthorized nor it can be stated through unauthorized means.
Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 30
My conclusions drawn hereinabove answers the preliminary objection raised by Mr. Prasad as to the maintainability of the writ petition and also items (a), (b), (c) and
(d) framed hereinabove.
In view of my conclusions drawn hereinabove, the orders impugned in the two writ petitions passed under Section 126 of the Act becomes unsustainable and cannot be upheld.
The question which would next arise is whether the argument of Mr. Giri regarding the consumption made by the petitioners through tertiary winding be waived of as a transmission loss, is worthy of consideration. Such argument of Mr. Giri is only taken to be rejected for a transmission loss can only be in circumstances where the energy so lost cannot be accounted for. In cases where a loss of energy is on account of consumption, it cannot be rendered as a transmission loss and thus the transmission licensee that is the petitioner is fully accountable for its payment. The argument of Mr. Giri in trying to justify the consumption under the cover of transmission loss which is fully accounted for in the tariff determination, cannot be upheld and my conclusion answers item (e) above.
My opinion recorded hereinabove would also answer the issue regarding the onus of the petitioner to make payment of Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 31 the energy consumed through tertiary winding of the I.C.T. as per the tariff applicable under the H.T. category to which he belongs. The argument of Mr. Giri that in absence of any tariff framed in respect of drawal of energy through tertiary winding he cannot be charged, is a misconception for the source of drawal of energy becomes relevant only in cases covered by Section 126 or 135 of the Act. In other cases the consumer would be billed as per the tariff category to which such consumer belongs. That admittedly the petitioner belongs to H.T. category hence any consumption of electricity by the petitioner through any source would be liable to assessment under the category to which the petitioner belongs. There is hardly a scope for discussion on the issue and the attempt made by Mr. Giri on the anvil of absence of tariff framed covering drawal of energy through tertiary winding, is a misnomer and the petitioner cannot escape this liability. The petitioner having survived the charge of drawing electricity through unauthorized means, he sails into the category of a bona fide user of electricity and would be charged as per the tariff category to which he belongs. Thus the respondents would raise a bill for the consumption of electricity by the petitioner through the tertiary winding of the ICT as per the H.T. category to which he belongs in accordance with law and which would be payable by the Patna High Court CWJC No.9362 of 2014 (8) dt.09-10-2014 32 petitioner.
This would bring this Court to the last of the issue regarding the period for which the bill can be raised. An opportunity had been given to Mr. Prasad as well as to Mr. Giri to address the Court on this issue but for my conclusion drawn hereinabove that stage is yet to come and any opinion thereon would thus be prejudging the issue. This Court thus would keep the issue open for contest at the appropriate stage. However, in view of the opinion expressed by me on the various issues raised by the contesting parities, it is only a completion of formality to hold that the order dated 29.3.2013 and the order dated 22.4.2014 impugned at Annexure-5 and 7 to CWJC No. 9362 of 2014 and the order dated 28.3.2014 and the order dated 22.4.2014 impugned at Annexure-5 and 7 to CWJC No. 9363 of 2014 cannot be upheld and are accordingly set aside. The matter is remitted back to the assessing authority i.e. Electrical Executive Engineer, Electric Supply Division, Muzaffarpur and the Electrical Executive Engineer, Electric Supply Division, Purnea respectively to pass a fresh order in accordance with law and after hearing the petitioner and raise a fresh bill after adjusting the amount already deposited by the petitioner.
The writ petitions are allowed with the directions aforementioned.
S.Sb/- (Jyoti Saran, J) U