Kerala High Court
Kerala State Electricity Board vs Indian Aluminum Company Ltd on 20 March, 2007
Author: Antony Dominic
Bench: Antony Dominic
IN THE HIGH COURT OF KERALAAT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE ANTONY DOMINIC
&
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
MONDAY, THE 31ST DAY OF MARCH 2014/10TH CHAITHRA, 1936
WA.No. 1960 of 2007 ( ) IN OP.4549/1999
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AGAINST THE ORDER IN OP 4549/1999 of HIGH COURT OF KERALA
DATED 20-03-2007
APPELLANT(S)/1ST RESPONDENT:
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KERALA STATE ELECTRICITY BOARD
VYDHYUTHI BHAVANAM, TRIVANDRUM.
BY ADVS.SRI.C.K.KARUNAKARAN, SC FOR KSEB
SRI.SAJI VARGHESE
SRI.P.SANTHALINGAM (SR.)
SRI.S.SHARAN,SC,K.S.E.BOARD
RESPONDENT(S)/PETITIONER & 2ND RESPONDENT:
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1. INDIAN ALUMINUM COMPANY LTD.
ALUPURAM.
2. STATEOF KERALA,
REP. BY SECRETARY TO GOVERNMENT POWER (A)
DEPARTMENT, GOVT.SECRETARIAT, THIRUVANANTHAPURAM.
R, BY ADV. SRI,M.PATHROSE MATHAI(SR.)
R1 BY ADV. SRI.M.PATHROSE MATTHAI (SR.)
R1 BY ADV. SRI.SAJI VARGHESE
R1 BY ADV. SMT.MARIAM MATHAI
R2 BY SR.GOVT. PLEADER SMT.K.T.LILLY
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31-03-2014, ALONG
WITH WPC. 21272/2007, WPC. 6658/2008, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
ANTONY DOMINIC & ANIL K.NARENDRAN, JJ.
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W.A.No.1960 of 2007 &
W.P(C).Nos.21272 of 2007 & 6658 of 2008
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Dated this the 31st March, 2014
JUDGMENT
Antony Dominic, J.
1.The issues raised in these cases are connected and therefore, these cases were heard together. However, for convenience, we shall deal with the cases separately.
W.P(C).No.21272/07
2.This writ petition is filed by M/s.Hindalco Industries Limited who are the successors of M/s.Indian Aluminium Company Limited. In this writ petition, they are challenging Ext.P14 order passed by the second respondent, rejecting their claim for the facility of clubbing for the period August, 1986 and from February to July, 1998.
3.Briefly stated, the facts of the case are that the petitioner is an EHT consumer of the Board and are engaged in the manufacture of Aluminium metals and products of Aluminium. For this purpose, they were availing of electricity supplied through 110 KV, 66 WA.1960/07 & con. cases 2 KV and 11 KV systems. In 1986, when power cut was imposed, they claimed that they did not want to purchase imported energy costing higher price and that the supply through 110 KV and 66 KV should be clubbed and supplied under 110 KV system. That claim of the company for the period from 15.8.1986 to 31.8.1986 was rejected and the rejection was challenged before this Court in OP.7350/86. By Ext.P3 judgment rendered by a Division Bench of this Court on 21.11.1989, the OP was allowed and Exts.P4 and P5, which were challenged therein, were set aside. That judgment has become final.
4.During February to June,1998, the company again claimed the benefit of clubbing. However, without allowing the benefit of clubbing, on the basis that the company had exceeded the permitted quantity of power, invoices were raised. That again was challenged before this Court in OP.10472/98. That OP was disposed of by Ext.P12 judgment rendered on 16.8.2005. In that judgment, the following findings were arrived at by this Court:
WA.1960/07 & con. cases 3 (1)As far as the clubbing is concerned it is seen from Ext.P1 that such a facility was extended to the petitioner since power is one of the raw-materials for the petitioner.
(2)It is also seen from the judgment of a Division Bench of this Court in OP.7350/1986 that such clubbing had to be permitted in the case of the petitioner. True that is in respect of the earlier period. But the principle is the same.
(3)Further it is seen from Ext.P9 that in the case of similarly situated consumers clubbing was permitted by the Board in respect of the very same disputed period.
5.On the above basis, this Court directed that Ext.P5 submitted by the petitioner claiming the benefit of clubbing be dealt with. Accordingly, the Board considered the matter and passed order dated 20.12.2006, wherein, it rejected the claim of the petitioner. In so far as the parity claimed by the petitioner with M/s.Travancore Cochin Chemicals Ltd. in whose favour clubbing was allowed is concerned, in paragraph 19 of Ext.P14, it was stated thus:
WA.1960/07 & con. cases 4 "M/s.Travancore Cochin Chemicals Limited is a public sector undertaking owned by the government of Kerala. The chemicals required for purifying drinking water supplied by the KWA are being produced by M/s.TCC Limited. The facility of clubbing has been granted to M/s.TCC Limited as sper the direction of the Government in public interest. The KWA has been supplying drinking water all over the state and any increase in the price of chemicals required for purifying water would adversely affect the water supply. In order to avoid such a situation and in compliance of the direction of the Government, M/s.TCC was given the clubbing facility. Hence, the concession accorded to public institutions, which are labelled as utility services need not necessarily be extended sto a Private Company and the same cannot be claimed as a precedent. Therefore, in view of the facts that there was sufficient power available during the period from 01.02.1998 to 15.07.1998 that M/s.INDAL had actually consumed electricity more than 70% of the base average even though they opted not to avail Eastern Region Electricity Board (EREB) power, and that clubbing facility granted to M/s.TCC Limited cannot be extended to the petitioner for the reasons stated above, the request of the petitioner to grant facility of clubbing during 01.02.1998 to 15.07.1998 cannot be acceded to."
6.In the above circumstances, this writ petition is filed challenging Ext.P14 and seeking the benefit of clubbing for the period mentioned above. WA.1960/07 & con. cases 5
7.In the counter affidavit filed, the main contention raised on behalf of the respondents is that Ext.P3 judgment pertains to the period of 1986 and therefore, it has no relevance in so far as 1998 is concerned. They also say that clubbing was allowed only at a time when power cut was in force and according to them, during the relevant period in 1998 though there were restrictions in the consumption of electricity, there was no power cut in force. It is also contended by them that the case of M/s.TCC Ltd. stands on a different footing in as much as supply was made to them on the basis of a Government directive contained in Ext.P16 minutes of meeting and Ext.P9 Board order.
8.We heard the senior counsel for the petitioner and the learned senior counsel for the respondent Board.
9.Ext.P3 is the judgment rendered by this Court in OP.7350/86 where this Court interfered with the order passed by the respondent therein, rejecting the petitioner's request for clubbing of electrical energy supplied at the petitioner's factory. In that WA.1960/07 & con. cases 6 judgment, one of the main reasons accepted by this Court is that while the petitioner's request for clubbing was rejected, M/s.TCC Ltd. was allowed the benefit of clubbing. This, according to the Division Bench of this Court, was discriminatory and it was on that basis, the impugned orders were interfered with and the benefit of clubbing was ordered to be given to the petitioner. That judgment has become final and binding on the respondents.
10.In Ext.P12 judgment in O.P.10472/98, the relevant portion of which has already been referred to in paragraph 4 hereinabove, this Court has also held that though Ext.P3 pertained to the year 1986, even in respect of 1998, the principle is the same. Ext.P12 judgment has become also final and binding on the parties. As a result, in view of Exts.P3 and P12 judgments, the petitioner is entitled to be treated on a par with M/s.TCC Ltd. as far as the benefit of clubbing is concerned.
11.Ext.P16 minutes of meeting shows that in the meeting held on 2.1.1998, the Board had agreed to permit WA.1960/07 & con. cases 7 clubbing in so far as M/s.TCC Ltd. is concerned. In pursuance of that minutes, Ext.P9 order was issued by the Board on 4.3.1998 allowing clubbing to M/s.TCC Ltd. Exts.P3 and P12 judgments and P16 and P9 orders would, therefore, show that in so far as clubbing of electrical energy is concerned, while the petitioner was entitled to be treated on a par with M/s.TCC Ltd., clubbing was allowed to M/s.TCC Ltd. whereas the same benefit was rejected in the case of the petitioner. This, in our view, is discretionary and unconstitutional.
12.The reasons stated by the Board in Ext.P14 for treating M/s.TCC Ltd. differentially is that the chemicals required for manufacturing drinking water supplied by the Kerala Water Authority are being produced by M/s.TCC Ltd. In so far as this statement contained in Ext.P14 order passed by the Board is concerned, the petitioner has produced Ext.P17, the information obtained from the Kerala Water Authority (KWA), which shows that the purifying chemicals used by the KWA are Alam and Bleaching Powder and that for the period during 1886-87 to 1996-97, KWA has not WA.1960/07 & con. cases 8 purchased any amount of these purifying chemicals from M/s.TCC Ltd. This, therefore, shows that the reason stated by the Board in Ext.P14 to justify the differential treatment in favour of M/s.TCC Ltd. has no factual basis.
13.Learned senior counsel for the Board then contended that the supply made to M/s.TCC Ltd. was on the basis of a directive issued by the Government in terms of section 22A(1) of the Indian Electricity Act, 1910. Section 22A(1) reads thus:
"The State Government may, if in its opinion it is necessary in the public interest so to do, direct any licensee to supply, in preference to any other consumer, energy required by any establishment which being in the opinion of the State Government an establishment used or intended to be used for maintaining supplies and services essential to the community, is notified by that Government in the Official Gazette in this behalf."
14.Reading of this statutory provision shows that to apply the said provision, the respondent establishment should be one notified by the WA.1960/07 & con. cases 9 Government in the official gazette. In this case, there is no pleading that any such notification has been issued by the Government of Kerala nor has anyone of the parties produced any such notification. In such a situation, the benefit of section 22A(1) cannot be claimed to justify the favourable treatment to M/s.TCC Ltd. Therefore, this contention also has to fail.
15.In the result, Ext.P14 challenged in W.p(C).21272/07 cannot be sustained and is liable to be quashed. Writ petition is disposed of quashing Ext.P14. W.P(C).6658/08
16.In this writ petition, what is under challenge is Ext.P19, a demand issued by the respondents on 5.2.2008, calling upon the petitioner to remit a total amount of `31,54,14,269/-.
17.One of the demands in this communication is for `6,90,88,806/- being the arrears of current charges for the period from February, 1998 to July, 1998, which, according to the respondents, is due following WA.1960/07 & con. cases 10 Ext.P14 mentioned in the judgment in W.P(C).21272/07. Since Ext.P14 is set aside vide our judgment in W.P (C).21272/07, this demand for `6,90,88,806/- cannot be sustained and is set aside.
18.Another demand is for `16,42,386/- being the short remittance made. This demand is made for the period covered by Ext.P3 judgment mentioned in the judgment in W.p(C).21272/07. Therefore, this claim also is to be set aside and we do so.
19.We are now left with mainly two other claims. First one is the demand made by the Board for a total amount of `1,94,23,718/- due for the period from 1.8.2003 to 3.10.2003. From the pleadings, it appears that as per the agreement between the company and the Board, the contract demand was 26250 KW at 110 KV and the petitioner had requested that the contract demand be reduced to 5000 KW at 110 KV with effect from 1.8.2003. Requesting that the contract demand be reduced, the petitioner gave Ext.P4, a notice dated 30.6.2003.
WA.1960/07 & con. cases 11
20.However, relying on Ext.P7 dated 28.4.2000, which states that rejection of contract demand requested by EHT consumers shall be allowed after three months from the date of receipt of the applications, the Board reduced the contract demand as requested in Ext.P4 with effect from 3.10.2003. The demand contained in Ext.P19 mentioned above for `1,94,23,718/- is the amount short remitted by the petitioner during the notice period 1.8.2003 to 3.10.2003. The petitioner challenges the said demand contending that the stipulation of the Board that it should be given three months notice for reducing the contract demand is unreasonable.
21.On the other hand, learned senior counsel for the Board, referring to the counter affidavit, contended that the Board was within its power in fixing such notice period and that the petitioner being one of the parties to a contract cannot unilaterally seek variation thereof.
22.Admittedly, the relationship between the petitioner and the Board is regulated by an agreement. That WA.1960/07 & con. cases 12 agreement contains the contract demand which is a mutually agreed quantity. By Ext.P14, the petitioner sought a unilateral variation of this mutually agreed contract demand from 26250 KW to 5000 KW. The petitioner cannot be heard to contend that it has any vested right to unilaterally vary this mutually agreed quantity. However, the petitioner has no case that either under the agreement or under the Act, had it any right entitling it to get the contract amount variated. In such circumstances, if the Board insists for a minimum notice period, such a stipulation insisted by the Board cannot be said to be either illegal or arbitrary. Therefore, we feel that if the Board has fixed three months as the notice period for allowing reduction in the contract demand, it being a policy decision of the Board, there is nothing illegal or arbitrary justifying interference under Article 226 of the Constitution of India.
23.Consequently, the demand of the Board for the amount short remitted during the aforesaid period from 1.8.2003 to 3.10.2003 cannot be said to be illegal WA.1960/07 & con. cases 13 for any reason. We, therefore, uphold the demand made by the Board for `1,94,23,718/-.
24.Now what remains is the demand by the Board for an amount of `6,48,30,037/-. Reading of Ext.P19 shows that according to the Board, on account of the order passed by the Kerala State Electricity Regulatory Commission dated 11.5.2004, an amount of `3 crores was due from the petitioner. In addition to the above, the Board has demanded interest on the said amount and the total comes to `6,48,30,037/-. The petitioner contends that by virtue of Ext.P14 order passed by the Government of Kerala, it was entitled to be disbursed `3 crores as relief and that the Regulatory Commission has not interfered with Ext.P14 in any proceedings to which the petitioner is a party. Therefore, the petitioner says that it is not liable to refund `3 crores given to it pursuant to Ext.P14 and that the amount is not liable to be claimed by the Board.
WA.1960/07 & con. cases 14
25.The counter affidavit filed by the Board shows that by its order dated 11.5.2004, the Regulatory Commission has held Ext.P14 order, on the basis of which `3 crores was enjoyed by the peititoner, to be null and void. While it was true that the petitioner is not a party to the said order, the fact remains that the Regulatory Commission has held the order to be null and void and that order is not challenged by the petitioner or anybody else. Such an order binds the Board which is a party to the proceedings and therefore, if the Board has sought recovery of the amount paid on the basis of Ext.P14 on the petitioner, since the petitioner has also accepted the order of the Regulatory Commission and left it unchallenged, the petitioner cannot resist the demand. We, therefore, do not find anything illegal in this demand of the Board.
26.Sum and substance of the above discussion is that Ext.P19 order, in all respect except the demands for `16,42,386/- and `23,05,24,297/-, will stand valid. Writ petition ordered accordingly.
WA.1960/07 & con. cases 15 W.A.1960/07
27.This writ appeal arises from the judgment of the learned single Judge disposing of OP.4549/99 filed by the respondent. In the judgment under appeal, learned single Judge directed the appellant to refund `1,10,17,000/- and also to refund the bank guarantee dated 13.7.1998. It was aggrieved by the said judgment, the appeal is filed.
28.During hearing of the appeal, the only contention raised by the learned senior counsel for the appellant is that since substantial amounts are due from the respondent, it will be inequitable to call upon the appellant to refund the amount as directed by the learned single Judge.
29.Since the agreement between the respondent and the appellant is terminated, the appellant is liable to refund the security amount deposited by the respondent. It should also release the Bank Guarantee, if any, furnished by the respondent. WA.1960/07 & con. cases 16
30.Today, we have rendered judgments in W.P(C). Nos.21272/07 and 6658/08. As a result of those judgments, amounts are to be adjusted between the parties. In the light of our judgment disposing of these cases, we direct that the appellant Board shall, with notice to the respondent, determine the liability due from the appellant to the respondent or vice versa. This shall be done in pursuance to these judgments, as expeditiously as possible, at any rate, within three months of receipt of a copy of this judgment.
Appeal is disposed of accordingly.
Sd/-
ANTONY DOMINIC, Judge.
Sd/-
ANIL K.NARENDRAN, Judge.
kkb.