Madras High Court
A Society Registered vs Appellate Authority Executive ... on 23 August, 2022
Author: R.Vijayakumar
Bench: R.Vijayakumar
W.P(MD).Nos.256 and 257 of 2012
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
ORDER RESERVED ON : 22.07.2022
ORDER PRONOUNCED ON : 23 .08.2022
CORAM:
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P.(MD).Nos.256 & 257 of 2012
and
MP(MD).Nos. 1 of 2012 & 1 of 2013 and
1 & 2 of 2012 and 1 of 2013
TVS Agri Sciences Research Institute
(Reg.No.63 of 2003)
A Society Registered
under Tamil Nadu Societies Registration Act
Having register office at
D.No.78, West Veli Street
Madurai
Represented by Mr.Anbazagan ….Petitioner
Vs
1.Appellate Authority Executive Engineer
(Operations)
230 KV Electricity Sub Station
Kayathar
Tirunelveli District
2.Executive Engineer
Tamil Nadu Electricity Generation and Distribution
Corporation
Eruvadi
Tirunelveli District
https://www.mhc.tn.gov.in/judis
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W.P(MD).Nos.256 and 257 of 2012
3.Assistant Executive Engineer
Tamil Nadu Electricity Generation and Distribution
Corporation
Eruvadi
Tirunelveli District …..Respondents
Prayer in W.P(MD).No.256 of 2012: This Petition filed under Article 226 of
the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling
for the records relating to the impugned order passed by the first respondent
dated 12.12.2011 in Lr.No.EE/E/Kayathar/D-DOC/2011 confirming the final
assessment order passed by the third respondent in Lr.No.AEE/E/Eruvadi/F-
DOC/D-270/2011 dated 05.09.2011 relating to the service connection No.D
385, quash the same and further direct the 2nd and 3rd respondent to refund the
amount deposited by the petitioner towards 50% of the penalty amount levied
with respect to service Connection No.D 385.
Prayer in W.P(MD).No.257 of 2012: This Petition filed under Article 226 of
the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling
for the records relating to the impugned order passed by the first respondent
dated 12.12.2011 in Lr.No.EE/E/Kayathar/F-DOC/2011 confirming the final
assessment order passed by the third respondent in Lr.No.AEE/D/Eruvadi/F-
DOC/D-271/2011 dated 05.09.2011 relating to the service connection No.D
386, quash the same and further direct the 2nd and 3rd respondent to refund the
amount deposited by the petitioner towards 50% of the penalty amount levied
with respect to service Connection No.D 386.
https://www.mhc.tn.gov.in/judis
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W.P(MD).Nos.256 and 257 of 2012
(In both petitions)
For Petitioner : Mr.M.S.Krishnan
Senior Counsel
For M/s.Sarvabhauman Associates
For Respondents : Mr.S.Deenadhayalan
Standing Counsel for TNEB
COMMON ORDER
Both the writ petitions have been filed by a TVS Agri Science Research Institute who are consumers of Electricity, challenging an order passed by the appellate authority arising out of the proceedings under Section 126 of Electricity Act.
Factual Background:
2.According to the petitioner, they are a society registered under Tamil Nadu Societies Registration Act and they approximately own 440.31 acres in Eruvadi and Vadakku Valliyoor Village in Tirunelveli District along with buildings, sheds, wells and other facilities set up in relation to agricultural purpose. According to the petitioner, the said lands are mainly used for raising agricultural crops like paddy, sugarcane and coconut trees. Nearly 2500 coconut trees, certain fruit bearing trees like Sappota, Amla, Pappaya and Mango have been planted and raised in less numbers. The petitioner had https://www.mhc.tn.gov.in/judis 3/20 W.P(MD).Nos.256 and 257 of 2012 further contended that the said institute has been established mainly to promote research facilities for carrying on research in agricultural and allied fields.
3.The petitioner had contended that the petitioner has got two service connections in D.Nos.385 and 386. Those service connection were under Tariff V. The petitioner had obtained a different service connections for illuminating the office building and thereafter, filed an application to the respondent board on 30.06.2004 for converting D.385 and D.386 into a free agricultural service connection. The said request of the petitioner was accepted by the board and an order was passed on 10.09.2004 converting the said connection into Tarrif IV connection. Thereafter, the authorities have inspected the site on 02.08.2011 and they arrived at a finding that the agricultural service connection is being utilised for horticulture purpose and hence, there is an unauthorised usage of service connection attracting Section 126 of Electricity Act. Two provisional assessment orders were used by the respondent board on 02.08.2011 for both the service connections.
4. The petitioner herein had filed his reply on 11.08.2011 contending that mainly they are cultivating coconut trees and it should be treated only as an agricultural operation. The other fruit bearing crops are only inter crops https://www.mhc.tn.gov.in/judis 4/20 W.P(MD).Nos.256 and 257 of 2012 and hence, the electricity board was not right in classifying their activities as horticulture activities. On 16.08.2011, a notice was issued by the respondent authorities seeking further explanation from the writ petitioner. The writ petitioner submitted a detailed reply for both the service connections on 02.09.2011. As per the said reply, the coconut trees are the major crops with around 2500 trees. Only based upon the request made by the petitioner society, the authorities after inspecting the agricultural land, have given a consent and passed an order converting Tariff V to Tariff IV. Even in the said application, the petitioner has mentioned that they are cultivating crops like Coconut trees, Paddy, Sugarcane, Mangoes, Amla and Sappota and after verifying the lands, the order was passed by the respondent board.
5.The petitioner had further contended that the board has not made out a case of unauthorised use of electricity because the service connection have been utilised only for agricultural purpose. The petitioner had further contended that after granting connection under Tariff IV, the respondent board cannot turn around and thereafter, contended that the usage is unauthorised.
6.The board after considering the reply, passed a final assessment order confirming the unauthorised usage and directed the petitioner Society to pay https://www.mhc.tn.gov.in/judis 5/20 W.P(MD).Nos.256 and 257 of 2012 a sum of Rs.5,27,965/- as per the enclosed working sheet. These two orders were challenged by way of writ petition in W.P.Nos.12963 and 12964 of 2011. This Court by an order dated 15.11.2011 disposed of the writ petitions directing the first respondent to dispose of the appeal dated 30.11.2011 within a period of four weeks from the date of receipt of copy of the order. Pending writ petitions, the petitioner society has already deposited 50% penalty amount as per demand raised.
7.The appellate authority had recorded the statement of authorities of the board as well as authorised representative on behalf of the petitioner society. The appellate authority had arrived at a finding that the board has clarified that Tariff V would be attracted for horticulture purpose and hence, the order passed by the respondent board authorities converting it from Tariff No.V to Tariff No.IV on 10.09.2004 is a negligent act on the part of the electricity board. Even after receipt of the order dated 11.08.2004, the respondent board has not made any attempt to restore it to Tarrif No.5 service connection. After arriving at such a finding, the appellate authority held that clarification has been published in the website of the board and in the newspaper and hence, the petitioner society ought to have approached the board for restoration of Tariff V connection. The appellate authority further found that the service connection under Tariff IV is meant for agricultural https://www.mhc.tn.gov.in/judis 6/20 W.P(MD).Nos.256 and 257 of 2012 purpose and when the same has been used for horticulture purpose, it should only be deemed to be an un-authorised use and attracts the provisions of Section 126 of the Electricity Act. The appellate authority further found that the board had rightly issued a final assessment order under Regulation No. 23(AA)(15) of the Tamil Nadu Electricity Supply Code and arrived at the quantum of energy consumption as per Regulation No.23(AA)(7) of Tamil Nadu Electricity Supply Code. This order of the appellate authority is under challenge in the present writ petition.
Contentions of the Counsel for the petitioner:
8.The learned Senior Counsel appearing for the writ petitioner had contended that the service connection is being utilised only for agricultural purpose and not for any other purpose. According to the learned Senior Counsel, the petitioner society has made an application to the respondent board for converting it from Tariff V to Tariff IV. Even in the said application, it was specifically mentioned that they are cultivating coconut and other fruit bearing trees. The authorities have inspected the agricultural land and only thereafter, they passed an order on 10.09.2004 changing the Tariff V to Tariff IV. Hence, the authorities cannot be heard to contend that Tariff IV service connection was un-authorisedly used for horticultural purpose.
https://www.mhc.tn.gov.in/judis 7/20 W.P(MD).Nos.256 and 257 of 2012
9.The learned Senior Counsel further contended that as per Tariff order of the year 2010, Tariff IV was meant for agricultural service connection. The Tamil Nadu Electricity Regulatory Commission has issued a press release on 30.03.2012 to the effect that the meaning of agricultural service connection has been amended to include incidental activities like Sericulture, Horticulture, Poultry Farming, etc using water available from agricultural pump sets. The learned Senior Counsel further relied upon Tariff IV of 2012 order to contend that the agricultural and allied activities include horticulture activities also. Hence, he contended that the contention of the respondent board that the agricultural service connection was un-authorisedly utilised for horticulture purpose is not legally sustainable.
10.The learned Senior Counsel also relied upon a clarificatory order of the Tamil Nadu Electricity Regulation Commission in Clarificatory order No. 1-4 of 2012, dated 24.12.2012 which clarifies that the horticulture is also one of the allied activities of agricultural and it should only be construed as agricultural activities.
11.The learned Senior Counsel had relied upon a Division Bench judgement of our High Court reported in 2018(1) CTC 612 (Mad) ( Tamil Nadu Electricity Board and others Vs. T.Vellaichamy Nadar), dated https://www.mhc.tn.gov.in/judis 8/20 W.P(MD).Nos.256 and 257 of 2012 04.01.2018, while had interpreted that the said clarificatory order is retrospective in nature. According to the learned Senior Counsel, in the said case on the same allegation, theft of energy was alleged to have taken place on 20.12.2009 for which the clarificatory order dated 24.12.2012 was pressed into service and the Court had arrived at a finding that in view of the retrospective nature of the clarificatory order, charges levelled against the writ petitioner relating to the theft of energy or different user are not sustainable. Hence, the learned Senior Counsel had contended that in the present case, an inspection has been conducted on 01.08.2011 and hence, the clarificatory order dated 24.12.2012 having retrospective effect should be taken into consideration and the allegation of unauthorised use of electricity is not legally sustainable.
12.The learned Senior Counsel further contended that the appellate authority has given a specific finding that due to negligence on the part of the respondent board, the tariff was changed from Tariff V to Tariff IV. After arriving at such a finding, the appellate authority ought not to have confirmed the order passed by the original authority. When the change of tariff has taken place due to some default on the part of the respondent board, the petitioner cannot be alleged to have committed an unauthorised use of electricity attracting the provision of Section 126 of the Electricity Act. Hence, he prayed for allowing the writ petitions.
https://www.mhc.tn.gov.in/judis 9/20 W.P(MD).Nos.256 and 257 of 2012 Contentions of the Counsel for the respondents:
13.Per contra, the learned Standing counsel appearing for the Electricity Board had contended that the petitioner society is having more than 100 acres of land out of which only a small portion is being utilised for cultivation of coconut. Rest of the area is used for cultivation of fruit bearing trees and such activities should only be construed to be for horticulture activities. He had further contended that under the tariff order of the year 2010, if the motor used for horticulture activities does not exceed 10 HP, they will fall under Tariff IIIA(1). If the connected load exceeds 10 HP, it would fall under Tariff III B. Free service connection of Tariff IV is exclusively meant for agricultural purpose only. The inspection having taken place on 01.08.2011 only Tariff order 2010 would be applicable to the writ petitioner and hence, they cannot rely upon tariff order 2012 to contend that the horticulture being an allied activities of agricultural, could fall under Tariff IV.
14.The learned Standing counsel had further contended that the Clarificatory order issued by the Tamil Nadu Electricity Regulatory Commission dated 24.12.2012 is only with regard to tariff order 2012 and it will not cover any action initiated under tariff order 2010. He had further contended that even in the year 2012 tariff order, the horticulture activities should be covered under free service connection falling in Tariff IV only if it https://www.mhc.tn.gov.in/judis 10/20 W.P(MD).Nos.256 and 257 of 2012 is carried out as allied activities of agriculture. If horticulture activities is carried out as main activities, Tariff IV will not get attracted even under Tariff order 2012. Only Tariff IIIA(1) or Tariff IIIB would get attracted depending upon the connected load. Hence, he had contended that the petitioner's case being governed by the Tariff order of the year 2010. The petitioner society cannot rely upon clarificatory order 2012 arising out of tariff order of the year 2012.
15.The learned Standing Counsel appearing for the respondent board had further contended that the vast extent of land in which fruit bearing trees are cultivated will clearly indicate that the cultivation is only for commercial purposes and not for any domestic usage. He had further contended that the tariff orders are published in the website and the petitioner ought to have knowledge about the applicable tariff order and ought to have approached the authorities concerned for changing of tariff from Tariff IV to Tariff V immediately. Having failed to do so, the provisions of Section 126 of the Electricity Act gets attracted and the assessment order issued by the authorities are strictly in consonance with the Electricity Act and Tamil Nadu Electricity Supply Code. Hence, he prayed for dismissal of the writ petition. https://www.mhc.tn.gov.in/judis 11/20 W.P(MD).Nos.256 and 257 of 2012
16.I have considered the submissions made on either side and perused the materials available on record.
17. The petitioner society was admittedly having two service connections in D.Nos.385 and 386. Those service connections were under Tariff No.V. According to the petitioner, office buildings have been given a separate electricity service connection and the above said two service connections are exclusively used for agricultural purpose. They have approached the electricity board to convert the above said service as a free agricultural service connection. The petitioner society had given a letter to the authorities on 30.06.2004 for effecting such conversion from Tariff V to Tariff IV. Based upon the said request, an order has been passed by the respondent board on 10.08.2004 converting the above said service connection from Tariff V to Tariff IV ( free agricultural service connection). The respondent authorities have conducted an inspection on 02.08.2011 and have issued a provisional assessment order alleging that the agricultural service connection is being used for horticulture purpose. The petitioner has submitted a reply on 02.09.2011 contending that their application for conversion itself revealed that they are cultivating the coconut trees and fruit bearing trees.
https://www.mhc.tn.gov.in/judis 12/20 W.P(MD).Nos.256 and 257 of 2012
18.The final assessment order has not considered the fact that the application for conversion itself mentioned about the fruit bearing trees. The final assessment order has also not considered the fact that only after inspection, the said conversion was effected by the respondent board. The appellate authority in his order dated 12.12.2011 has given a specific finding that on 11.08.2004 itself, the electricity board has issued a clarification that the tariff applicable for horticulture is LT.Tariff No.V. Despite such an clarification on 11.08.2004, the respondent authorities have passed an order on 10.09.2004 effecting change in tariff from Tariff No.V to Tariff No.IV. Hence, it is clear that on the date when the authorities effected change in tariff, they were aware of the said order dated 11.08.2004 and only after being convinced that the service connection is utilised for agricultural purpose, they have effected the change.
19.The appellate authority has given a finding that the authorities have negligently effected change from Tariff V to Tariff IV without considering the clarification issued by the board dated 11.08.2004. Hence, it is clear that the change of Tariff from V to Tariff IV was effected b the respondent board in an negligent manner and the petitioner society cannot be charged with the allegation of unauthorised usage of electricity. In the reply dated 02.09.2011, the petitioner society has categorically contended that their application https://www.mhc.tn.gov.in/judis 13/20 W.P(MD).Nos.256 and 257 of 2012 clearly disclosed about the fruit bearing trees and only after conducting an inspection to change in tariff was effected by the authorities. This fact has not been disputed either in the final assessment order or in the order passed by the appellate authority. Once the authorities after going through the application and after conducting an inspection, were convinced that the cultivation of coconut and fruit bearing trees would fall within the definition of agricultural activities and thereafter, effected change in tariff, the question of charging the petitioner society of an unauthorised use of electricity for the purpose of horticulture activities does not arise.
20.Section 126 of the Electricity Act, 2003 explanation is extracted as follows:
Section 126: (Assessment): --- (1) If on an inspection of any place or premises or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection of records maintained by any person, the assessing officer comes to the conclusion that such person is indulging in unauthorized use of electricity, he shall provisionally assess to the best of his judgement the electricity charges payable by such person or by any other person benefited by such use.
(2) The order of provisional assessment shall be served upon the person in occupation or possession or in charge of the place or premises in such manner as may be prescribed.
(3) The person, on whom an order has been served under sub-
section (2) shall be entitled to file objections, if any, against the https://www.mhc.tn.gov.in/judis 14/20 W.P(MD).Nos.256 and 257 of 2012 provisional assessment before the assessing officer, who shall, after affording a reasonable opportunity of hearing to such person, pass a final order of assessment within thirty days from the date of service of such order of provisional assessment of the electricity charges payable by such person.
(4) Any person served with the order of provisional assessment, may, accept such assessment and deposit the assessed amount with the licensee within seven days of service of such provisional assessment order upon him:
2[***] 3[(5) If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorized use of electricity has taken place and if, however, the period during which such unauthorised use of electricity has taken place cannot be ascertained, such period shall be limited to a period of twelve months immediately preceding the date of inspection.
(6) The assessment under this section shall be made at a rate equal to 1[twice] the tariff rates applicable for the relevant category of services specified in sub-section (5).
Explanation.- For the purposes of this section,- (a) “assessing officer” means an officer of a State Government or Board or licensee, as the case may be, designated as such by the State Government; (
b) “unauthorised use of electricity” means the usage of electricity –
(i) by any artificial means; or https://www.mhc.tn.gov.in/judis 15/20 W.P(MD).Nos.256 and 257 of 2012
(ii) by a means not authorised by the concerned person or authority or licensee; or
(iii) through a tampered meter; or
(iv) for the purpose other than for which the usage of electricity was authorised; or
(v) for the premises or areas other than those for which the supply of electricity was authorized.”
21.A perusal of the above said explanation will clearly indicate that as per explanation (b)(iv), a usage could be termed to be an unauthorised, if it is used for the purpose other than for which the usage of electricity was authorised. In the present case, the petitioner society has not concealed anything in their application for conversion of Tariff and the respondent authorities have also conducted an inspection and thereafter, effected conversion of tariff. Hence, the authorities themselves have authorised the petitioner to use the said service connection for the purpose for which it was mentioned in the application filed by the petitioner society. Therefore, even as per definition under Section 126 of Electricity Act 2003, the usage of the writ petitioner society could never be termed to be an unauthorised use attracting Section 126 of the Electricity Code.
https://www.mhc.tn.gov.in/judis 16/20 W.P(MD).Nos.256 and 257 of 2012
22.The final assessment authority have invoked Regulation 23(AA) (15) of Tamil Nadu Electricity Supply Code for passing the final assessment order. The final assessment authority has also calculated the extent of compensation invoking Regulation No.23(AA)(7) of the said Act. A perusal of the Electricity Supply Code indicate that Regulation No.23 is applicable only for the cases covered Sections 135 to 141 of the Electricity Act relating to theft of energy. In the present case, no proceedings have been initiated as against the petitioner under Section 135 of the Electricity Act. On the other hand, the proceedings have been initiated only under Section 126 of the Electricity Act alleging unauthorised usage of electricity. For an unauthorised use of electricity, the quantum of penalty should be assessed only as per Regulation No.19 and not as per Regulation No.23. Hence, the quantum of penalty imposed upon the writ petitioner invoking Regulation No.23 is also not legally sustainable. The mode of calculation of penalty under Regulation No.19 and under Regulation No.23 are completely different and hence, the impugned order suffers from the said illegality also.
23.The learned Senior Counsel appearing for the petitioner had contended that the clarificatory letter issued by the respondent board in clarificatory order No. 1-4 of 2012 dated 24.12.2012 in which it was clarified that the horticulture is an allied activity of agriculture and it should be construed as an agricultural activity. The learned Standing Counsel appearing https://www.mhc.tn.gov.in/judis 17/20 W.P(MD).Nos.256 and 257 of 2012 for the respondents had contended that the said clarification arises out of tariff order 2012 and hence, it cannot be invoked for tariff order 2010 under which the present case has arisen. The Hon'ble Division Bench judgement of our High Court reported in 2018 (1) CTC 612 (Mad) (The Tamil Nadu Electricity Board and others Vs. T.Vellaichamy Nadar) has held as in Paragraph No.51:
“51..In the instant cases on hand, a reading of the contents of the Clarificatory Order No.1-4 of 2012 dated 24.12.2012 [In regard to the Issue of clarification in the Tariff Order 1 of 2012 on Determination of Tariff for Generation and Distribution] especially with reference to para 10.20.1 under LT Tariff IV and para 10.17.7 under LT III A (1) of the said Tariff Order, show that in the aforestated Tariff schedules, the activities in issue are sericulture, floriculture, horticulture, mushroom cultivation, cattle farming, poultry and bird farming, dairy units and fish/prawn culture. In fact, in LT tariff IV, the emphasis is on the phrase, “carried out as allied activities of agriculture shall be construed as agricultural activities”. But, in LT Tariff III-A(1), the emphasis is on the phrase “who have not been covered under LT Tariff IV. In short, this Court points out that the contents of Clarificatory Order No.1-4 of 2012 dated 24.12.2012 do not in any way unerringly points out that it is prospective in nature. Per contra, it points out that it is retrospective in nature. Suffice it for this Court to point out that the Clarificatory Order No.1-4 of 2012 dated 24.12.2012, in fact, comes to the aid of the Respondent/Writ Petitioner and not the Appellants/Board. Therefore, the https://www.mhc.tn.gov.in/judis 18/20 W.P(MD).Nos.256 and 257 of 2012 Appellants/Board cannot levelled charges of 'Theft of Energy' or 'Different User' against the Respondent/Writ Petitioner, in regard to the impugned demand dated 25.10.2012”.
24.In the said case, there is an allegation of theft of energy on 21.12.2009 much prior to the clarificatory order dated 24.12.2012. The Hon'ble Division Bench has categorically found that the Clarificatory order is retrospective in nature and the Board cannot level charges of theft of energy or different user as against the writ petitioner with regard to impugned demand dated 25.10.2012.
25.In view of the above the Division Bench Judgement, the clarificatory order being retrospective in nature. The horticulture activities falling under the category of allied activity of agricultural would fall within the category of agricultural activity and therefore, attract Tariff IV.
26.In view of the above said discussion, the petitioner cannot be charged with the allegation of unauthorised use of electricity and hence, all the proceedings initiated under Section 126 of Electricity Act culminating in the impugned order are hereby set aside. The writ petitions stand allowed. No costs. Consequently, connected miscellaneous petitions are closed.
23.08.2022 Internet : Yes/No Index : Yes/No msa https://www.mhc.tn.gov.in/judis 19/20 W.P(MD).Nos.256 and 257 of 2012 R.VIJAYAKUMAR, J.
msa Pre-delivery order made in W.P.(MD).Nos.256 & 257 of 2012 and MP(MD).Nos. 1 of 2012 & 1 of 2013 and 1 & 2 of 2012 and 1 of 2013 23.08.2022 https://www.mhc.tn.gov.in/judis 20/20