Kerala High Court
M/S. Kunnathan Chip Boards Pvt. Ltd vs Kerala State Electricity Board Limited on 19 July, 2016
Author: Anil K.Narendran
Bench: P.R.Ramachandra Menon, Anil K.Narendran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
&
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
WEDNESDAY, THE 19TH DAY OF OCTOBER 2016/27TH ASWINA, 1938
WA.No.1667 of 2016 () IN WP(C).24032/2016
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AGAINST THE ORDER/JUDGMENT IN WP(C) 24032/2016 OFf HIGH COURT OF KERALA
DATED 19.7.2016
APPELLANTS/PETITIONER:
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M/S. KUNNATHAN CHIP BOARDS PVT. LTD,
EAST VAZHAPILLY P.O, MUAVATTUPUZHA, ERNAKULAM,
REPRESENTED BY ITS MANAGING DIRECTOR K.P SIYAD.
BY ADVS.SRI.A.A.ZIYAD RAHMAN
SRI.LAL K.JOSEPH
SRI.V.S.SHIRAZ BAVA
RESPONDENTS/RESPONDENTS :
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1. KERALA STATE ELECTRICITY BOARD LIMITED,
VYDHYUDHIBHAVANAM, PATTAM, THIRUVANANTHAPURAM,
REPRESENTED BY ITS CHAIRMAN 695 001.
2. THE DEPUTY CHIEF ENGINEER,
KERALA STATE ELECTRICTIY BOARD, ELECTRICAL CIRCLE,
PERUMBAVOOR 683 510.
3. THE CHIEF ENGINEER,
TRANSMISSION DIVISION,
KERALA STATE ELECTRICITY BOARD LTD, KOTHAMANGALAM,
ERNAKULAM 683 601.
4. THE SPECIAL OFFICER (REVENUE),
KERALA STATE ELECTRICITY BOARD LTD, VYDHYUDHIBHAVANAM,
PATTAM, THIRUVANANTHAPURAM 695 001.
5. THE ASSISTANT ENGINEER,
KERALA STATE ELECTRICITY BOARD LTD,
ELECTRICAL SECTION NO I, MUVATTUPUZHA,
ERNAKULAM 683 601.
WA.No.1667 of 2016 () IN WP(C).24032/2016
6. THE CONSUMER GRIEVANCE REDERESSAL FORUM,
KERALA STATE ELECTRICITY BOARD LTD, CENTRAL REGION,
NEW ST PAUL'S COLLEGE,
KALAMASSERRY REPRESENTED BY CHAIRMAN 682 801.
7. THE ELECTRICITY OMBUDSMAN,
CHARENGATTU BHAVAN, BUILDING NO 34/895,
MAMANGALAM- ANCHUMANA ROAD, EDAPPALLY KOCHI 24.
R1-5 BY ADV. SRI.P.SANTHALINGAM (SR.)
R1-R5 BY ADV. SRI.S.SHARAN,SC,K.S.E.BOARD
BY SRI.JAICE JACOB, SC, KERALA STATE ELECTRICITY BOARD
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 23-08-2016,
THE COURT ON 19-10-2016 DELIVERED THE FOLLOWING:
P.R.RAMACHANDRA MENON & ANIL K.NARENDRAN, JJ.
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W.A.No.1667 of 2016
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Dated this the 19th day of October, 2016
JUDGMENT
Anil K.Narendran, J.
The appellant is the petitioner in W.P.(C).No.24032 of 2016. The appellant, a company registered under the Companies Act, 1956 having an industrial unit at Muvattupuzha in Ernakulam District, within the jurisdiction of the 5th respondent, has approached this Court in that Writ Petition seeking for a writ of certiorari to quash Exts.P10, P11 and P12 and for a declaration that respondents 1 to 5 have no right to demand any charges from the appellant for recovering the expenditure incurred by respondents 1 to 4 in increasing the capacity of Kerala State Electricity Board (KSEB) sub-station at Muvattupuzha, as demanded in Ext.P12.
2. The learned Single Judge by the impugned judgment dated 19.7.2016 dismissed the writ petition declining interference on Ext.P12 and the appellant was granted one month's time to pay the amount demanded in Ext.P12. Until such time coercive W.A.No.1667 of 2016 2 steps pursuant to Ext.P12 was ordered to be kept in abeyance. The said judgment of the learned Single Judge is on a finding that the KSEB (hereinafter referred to as 'the Board') is entitled to collect the charges that would be incurred by it for the purpose of providing a sub-station or for enhancing the capacity of the sub- station, in order to provide the additional power load as requested by the appellant.
3. Feeling aggrieved by the judgment of the learned Single Judge the appellant is before this Court in this Writ Appeal.
4. We heard the learned counsel for the appellant/ petitioner and also the learned Senior Counsel for respondents 1 to 5.
5. The pleadings and materials on record would show that the appellant is running an industrial unit within the jurisdiction of Electrical Section No.1, Muvattupuzha. Since the appellant required high tension power connection to its industrial unit with a contract demand of 950 KVA, a request was placed before the 2nd respondent. The said respondent, after processing W.A.No.1667 of 2016 3 the request, issued Ext.P1 communication dated 22.5.2013 informing the appellant that the Board will be able to provide supply as requested for, only after constructing 2.5 Km. 11 KV overhead line with DP Structure departmentally and installation of one High Tension Metering Equipments including laying of 10 meters SLPE underground cable by the appellant. Further, the expenditure for tree cutting compensation and PTCC approval should also be met by the appellant. The appellant was requested to remit 25,91,000/- at the Electrical Section, Velloorkunnam towards cost of work pertaining to distribution side, excluding the work to be undertaken by the appellant. Pursuant to Ext.P1, the appellant remitted an amount of 25,91,000/- as cost for providing supply. Thereafter, the 2nd respondent issued Ext.P2 communication dated 16.8.2013 by which the estimated cost of 25,91,000/- was revised due to revision of labour charges and hence the appellant was directed to make an additional payment of 2,83,000/-. The appellant remitted the said amount as well. W.A.No.1667 of 2016 4
6. According to the Board, the additional power load to the appellant's industrial unit requires some improvements in the sub-station on the transmission side. The 3rd respondent calculated 19,60,800/- as the amount to be paid by the appellant as development charges, on pro rata basis. In view of the interim order of the Kerala State Electricity Regulatory Commission in O.P.No.22/2011, restraining the Board from recovering any development charges from the consumers, the appellant was asked to submit a bond agreeing to pay the said amount in case it is found that the said amount was legally recoverable. The appellant complied with the said condition and accordingly, the appellant was provided with an HT connection with a contract demand of 950 KVA.
7. While so, the appellant received Ext.P3 communication of the 2nd respondent dated 5.11.2014 demanding a sum of 19,60,800/- as development charges stating that in Ext.P4 judgment of the Division Bench of this Court dated 30.6.2014 in W.A.No.900/2014 and connected cases the right of the 1st W.A.No.1667 of 2016 5 respondent to demand development charges was upheld and hence the appellant is liable to pay the said amount. Contending that the demand made by the 2nd respondent based on Ext.P4 judgment is based on a misconception and that, the said judgment was not pertaining to the issue relating to collection of development charges for capacity enhancement of an existing sub-section, but was mainly concerning with the right of the 1st respondent to collect development charges, the appellant submitted Ext.P5 objection dated 4.12.2014 to Ext.P3 demand. However, the said objection was turned down by Ext.P6 communication dated 15.12.2014 of the 2nd respondent pointing out that, the bond executed by the appellant with the Transmission Circle, Thodupuzha is one executed on 7.5.2013, i.e., prior to 1.4.2014, the date on which the Kerala Electricity Supply Code, 2014 came into force. It was also informed that, in view of Ext.P4 judgment of the Division Bench of this Court the appellant is liable to pay the demand towards development charge on pro rata basis.
W.A.No.1667 of 2016 6
8. Ext.P6 was followed by Ext.P7 communication dated 28.2.2015 of the 2nd respondent permitting the appellant to remit the entire amount in 4 monthly installments. Later, by Ext.P8 communication dated 22.6.2015 the 2nd respondent directed the appellant to remit 50% of the total demand as the 1st installment within a period of 7 days from the date of the said notice.
9. Feeling aggrieved by the demand made by the 2nd respondent in Ext.P6, the appellant has approached this Court in W.P.(C).No.21311/2015. The said Writ Petition was disposed of by Ext.P9 judgment dated 15.7.2015 relegating the appellant to the alternative remedy to approach the Consumer Grievance Redressal Forum (CGRF), the 6th respondent herein. Pursuant to Ext.P9 judgment, the appellant submitted a compliant before the CGRF, Ernakulam, which, however, ended in dismissal by Ext.P10 order dated 21.11.2015, relying on an order passed by the CGRF dated 16.7.2015 in a similar case arising out of a similar complaint filed by M/s.Infra Housing (P) Ltd. in complaint No.5/2015.
W.A.No.1667 of 2016 7
10. Challenging Ext.P10 order the appellant filed a representation before the State Electricity Ombudsman, the 7th respondent herein, which was numbered as Appeal Petition No.P/183/2015, which was disposed of by Ext.P11 order dated 7.4.2016, upholding the demand in view of Ext.P4 judgment of this Court, in which a Division Bench of this Court found that, in terms of O.P.No.22/2011 of the Electricity Regulatory Commission the licensee can recover transmission charges from the appellant and as such there is no violation in issuing the demand for transmission charges. However the 7th respondent found that the cost estimated is not in accordance with the order dated 23.5.2011 in petition No.TP 87/2011. Hence the Board was directed to issue a revised demand in accordance with the order dated 23.5.2011 in petition No.TP 87/2011, for 950 KVA on proper acknowledgment within a period of 30 days from the date of receipt of that order. Since the work has already been completed and energised, the Board was directed to prepare an evaluation statement of the work, based on actual quantities, and W.A.No.1667 of 2016 8 the appellant was directed to remit the excess cost, if any, within one month, failing which the Board shall be entitled to recover the same as if it was arrears of current charges, under appropriate regulations. It was also made clear that excess remittances, if any, shall be refunded by the Board by adjustment in the monthly current charges/direct refund within a period of three months. The appeal filed by the appellant was admitted to the extent as ordered above, thereby modifying Ext.P10 order of CGRF to that extent. On the basis of Ext.P11 order, the 2nd respondent has revised the pro rata charges payable by the appellant as 12,01,750/-, towards the actual expenditure incurred for erection of one 12.5 MVA 110 KV transformer calculated at 1,58,10,742/- and the pro rata amount arrived at 1265/KVA.
11. The learned Single Judge after referring to Clauses 7 and 8 of the Kerala Electricity Supply Code, 2005 came to the conclusion that there is no ambiguity regarding the fact that the Board is entitled to collect such charges that would be incurred W.A.No.1667 of 2016 9 by it for the purpose of sub-station or to enhance the capacity of the sub-station to provide additional power load which has been requested by the appellant. In the said circumstances, the writ petition was dismissed declining interference on Ext.P11 order passed by the 2nd respondent and the appellant was granted one month's time to pay the amount demanded in Ext.P12.
12. The learned counsel for the appellant would contend that the demand made by the Board based on Ext.P4 judgment of the Division Bench of this Court in W.A.No.900/2013 and connected cases is legally unsustainable as the said judgment was not pertaining to the issue relating to collection of development charges for capacity enhancement of an existing sub-station, but it was mainly concerning with the right of the Board to collect development charges. In other words, according to the learned counsel for the appellant, the question regarding sustainability of the demand towards the expenses for capacity enhancement of an existing sub-station was not a subject matter therein.
W.A.No.1667 of 2016 10
13. Regarding the contention raised by the learned counsel for the appellant that Ext.P4 judgment of this Court was not pertaining to the issue relating to collection of development charges for capacity enhancement of an existing sub-station, we notice that W.A.No.900/2013 and connected cases arise out of a common judgment of the learned Single Judge dated 22.11.2002 in which it was held that the levy of transmission side development charges and demand for non-refundable advance impugned in the Writ Petitions were illegal and on that basis, the learned Single Judge ordered that the amounts realised from the writ petitioners therein should be refunded to them with 6% interest.
14. Therefore, the common issue raised in W.A.No.900 of 2013 and connected cases was regarding the legality of the levy of transmission side development charges by the Board, allegedly without obtaining the approval of Regulatory Commission. The validity of the demand made by the Board for non-refundable advance from the consumers was also under challenge. As W.A.No.1667 of 2016 11 discernible from Para.5 of the judgment, before the Division Bench arguments were advanced only against the findings of the learned Single Judge regarding the legality of the levy of transmission side development charges. Therefore, the Division Bench confined the examination only on the first issue, without in any manner disturbing the findings of the learned Single Judge in so far as the second issue is concerned.
15. Before the Division Bench, it was argued on behalf of the Board that, the levy has the approval of the Regulatory Commission and they have also relied on the order dated 23.05.2011 passed by the Commission approving the cost data for transmission work. Per contra, the respondents therein (the consumers) contended that, by the order dated 16.11.2009 the Regulatory Commission had rejected OP No.13 dated 14.05.2009, wherein the Board sought approval of its proposal to introduce development charges for new investments from 2008-
09. They also contended that the order dated 23.05.2011 of the Regulatory Commission relied on by the Board has no relevance W.A.No.1667 of 2016 12 as far as they are concerned because, according to them, it has application only to electric plants and lines above 11KV level and that their plants and lines are below 11KV. Since the scope of the dispute involved in those appeals has thus narrowed down to the above controversy, all that the Division Bench examined was whether the levy of transmission side development charges, which was impugned in those proceedings, has the approval of the Regulatory Commission as provided under the Electricity Act, the Supply Code and the Terms and Conditions of Supply.
16. With reference to the order dated 23.05.2011 of the Regulatory Commission (in TP-87/2011), the Division Bench observed that, although the said order of the Commission makes reference to the standard estimate rates for work above 11KV level, which was prepared by the Board on the directions of the Commission, analysis of the Commission and the order passed by it shows that the scope and applicability of the methodology approved by the Commission is not confined to works above 11KV level. When, irrespective of whether the supply is above W.A.No.1667 of 2016 13 11KV level or not, the transmission side developmental works for supply of energy and the expenses thereof incurred by the Board are in no way different, absolving consumers availing of supply below 11KV would have been without any rational basis and such an irrational classification would not stand judicial scrutiny. Therefore, the Division Bench observed that, there is no reason to hold that the Regulatory Commission has excluded the consumers availing of supply below 11KV level from the liability to pay development charges on the transmission side. (Paras.20 and 21 of the judgment)
17. Similarly, with reference to the order dated 16.11.2009 of the Regulatory Commission, the Division Bench observed that, in the said order, while declining the proposal of the Board, the Commission has made it clear that a distribution licensee is entitled to charge the expenses incurred for providing supply specifically to a consumer as approved by the Commission. Moreover, by the subsequent order dated 23.05.2011, the Commission has approved recovery of W.A.No.1667 of 2016 14 transmission side development charges in so far as consumers above 11KV are concerned, which order does not restrict its scope and applicability only to consumers availing supply above 11KV and it applies to others also. Therefore, the Division Bench held that, the order of the Commission dated 16.11.2009 cannot be relied on to defeat the claim of the Board. (Paras.22 and 23 of the judgment)
18. Relying on the counter affidavit filed by the Secretary of the Commission in W.P.(C)No.20515 of 2011, it was argued before the Division Bench that, the Regulatory Commission has not authorised the Board to collect any development charges for supply of electricity to new consumers. Along with the said counter affidavit, the Commission has also produced its interim order dated 07.10.2011 in O.P.No.22/2011, wherein the Board was directed not to collect development charges/sub station enhancement expenditure, etc. The Division Bench noticed that, in the affidavit, apart from referring to the order dated 16.11.2009 in OP No.13, the Commission has not made any W.A.No.1667 of 2016 15 reference to its subsequent order dated 23.05.2011 in TP- 87/2011. As discrnible from the judgment, even during the course of hearing, the Division Bench could not get any clear answer from the Commission on the scope of its order dated 23.05.2011, which was passed long after order dated 16.11.2009 was passed. The Division Bench noticed that, in the affidavit, apart from referring to the order dated 16.11.2009, the Commission has not made any reference to its order dated 23.05.2011. Therefore, in the absence of any reference or explanation regarding the order dated 23.05.2011 in TP-87/2011, the Division Bench expressed its inability to act upon the affidavit by the Commission and to hold that the said affidavit disproved the case of the Board that it is entitled to realise the transmission side development charges.
19. Therefore, the Division Bench disposed of W.A.No.900 of 2013 and connected cases, setting aside the common judgment dated 22.11.2012 of the learned Single Judge, to the extent the levy and collection of transmission side development W.A.No.1667 of 2016 16 charges are held illegal. Those among the respondents therein, who have not paid the amounts demanded by the Board, were allowed two months' time from the date of receipt of a copy of that judgment to pay the amounts due from them.
20. In view of the law laid down by the Division Bench in its judgment dated 30.06.2014 in W.A.No.900 of 2013 and connected cases (in which one among us [AKN(J)] was a member), the consumers like the appellant herein, who availed power supply are liable to pay development charges on the transmission side. In view of the law laid down by the Division Bench in Ext.P4 judgment, the appellant who is a consumer under the Board cannot now contend that as it was not a party to Ext.P4 judgment no demand in terms of the law laid down by this Court in that judgment can be made against it.
21. Clause 7 of the Supply Code of 2005 deals with power to recover expenditure. As per Clause 7(1) subject to the conditions of Clause 8, the Commission authorises the licensee under Section 46 of the Electricity Act, 2003 to recover from the W.A.No.1667 of 2016 17 owner or occupier of any premises requiring supply the expenses reasonably incurred by the licensee for providing any electric line or electrical plant required specifically for purpose of giving such supply. The 1st proviso to Clause 7(1) provides that the licensee shall not be entitled to recover such expenditure if such expenditure is under the Scheme approved by the Commission or otherwise charged in the annual revenue requirements of the licensee. The 2nd proviso to Clause 7(1) provides further that, the licensee may exempt any person requiring connection under Clause 8(1) from payment of expenditure if such person is below poverty line requiring supply with a connected load below 500 watts or if such person belongs to SC/ST category requiring supply with a connected load of 1000 watts.
22. Clause 8 of the Supply Code of 2005 deals with time frame for providing supply. Sub-clause (1) of Clause 8 deals with supply which requires no extension of distributing main; Sub- clause (2) deals with supply which requires extension of distributing main; Sub-clause (3) deals with supply which W.A.No.1667 of 2016 18 requires commissioning of new sub station; Sub-clause (4) deals with supply which requires commissioning of new sub station along with extension of electric line; etc. Sub-clause 3(a) of Clause 8 provides that, in cases where supply of electricity requires commissioning of a new sub-station, after receipt of application as provided under Clause 5, if the licensee finds that supply of electricity to the premises applied requires commissioning of a new sub-station which is not covered as part of the investment plan approved by the Commission, the licensee shall inspect the premises of the applicant and prepare the cost estimate for the works and intimate the applicant within one month of receipt of application. With reference to the term 'the premises of the applicant' in Clause 3(a) of the Supply Code of 2005 the learned counsel for the appellant would contend that the preparation of cost estimate for the work as contemplated under the said provision will be applicable only if the sub-station is constructed within the premises of the applicant and not otherwise, i.e., where the construction of the sub-station is W.A.No.1667 of 2016 19 outside the premises of the applicant.
23. We are unable to agree with the above said proposition mooted by the learned counsel for the appellant for more than one reasons. Firstly, Clause 7(1) of the Supply Code makes it explicitly clear that, subject to the conditions under Clause 8 therein the licensee is authorised to recover from the owner or occupier of any premises requiring supply the expenses reasonably incurred by the licensee for providing any electric line or electric plant required specifically for giving such supply. In the instant case the appellant has not disputed the fact that, the facility in the sub-station required to be enhanced for the purpose of providing additional power load to its industrial unit. It is also not in dispute that for providing such additional power load the Board has to incur 1,58,10,742/- for erection of one 12.5 MVA 110 KV transformer. The demand made against the appellant is only for 12,01,750/-, the pro rata amount arrived at 1265/KVA for the additional power requirement of the appellant. Therefore, the fact that in order to provide additional power W.A.No.1667 of 2016 20 allocation to the appellant's industrial unit the Board has to incur additional expenditure to a substantial extent is not in dispute.
24. Now the question to be decided is whether the licensee can recover such expenses in terms of Clause 8(3)(a) of the Supply Code of 2005. As per Clause 8(3)(a), on receipt of an application under Clause 5, if the licensee finds that supply of electricity to the premises in question requires commissioning of a new sub-station which is not covered as part of the investment plan approved by the Commission, the licensee shall inspect the premises of the applicant and prepare a cost estimate for the work and intimate the applicant the same within one month. Therefore, the only requirement is to find out whether for supply of electricity to the premises in question the licensee requires commissioning of a new sub-station which is not covered as part of the investment plan approved by the Commission. In the case on hand, the materials on record would show that, though there was a sub-station the facilities/capacity of that sub-station has to be enhanced for providing additional power load to the industrial W.A.No.1667 of 2016 21 unit of the appellant. As rightly noticed by the learned Single Judge the provisions under Clause 8(3)(a) contemplate that the licensee will have to inspect the premises only for the limited purpose of preparing the cost estimate and to intimate the same to the applicant. The estimate so prepared by the licensee is not with reference to the work that has to be undertaken in the premises of the applicant alone but also the additional expenditure that may have to be incurred by the Board for providing additional power load to the premises in question. It was in such circumstances, the learned Single Judge arrived at a conclusion that there is absolutely no ambiguity regarding the fact that the Board is entitled to collect pro rata development charges that would be incurred by it for the purpose of sub- station or to enhance the capacity of the sub-station to provide additional power load as requested by the appellant.
25. In the result, we find absolutely no valid reasons to interfere with the judgment of the learned Single Judge. The writ appeal fails and the same is accordingly dismissed. W.A.No.1667 of 2016 22
However, considering the fact that the time limit fixed by the learned Single Judge for payment of the amount demanded in Ext.P12 is already over, we deem it appropriate to grant the appellant one month's time from the date of this judgment to pay the amount as demanded in Ext.P12. Till such time all coercive steps pursuant to Ext.P12 shall be kept in abeyance.
Sd/-
P.R.RAMACHANDRA MENON, JUDGE Sd/-
ANIL K.NARENDRAN, JUDGE skj True copy P.A to Judge