Kerala High Court
M/S. Suprime Steel Industries vs Kerala State Electricity Board on 22 August, 2005
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM
FRIDAY,THE 1ST DAY OF NOVEMBER 2013/10TH KARTHIKA, 1935
WP(C).No. 17191 of 2013 (Y)
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PETITIONER :
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M/S. SUPRIME STEEL INDUSTRIES
KUTTAMASSERY, ALUVA,
REPRESENTED BY ITS MANAGING PARTNER
SRI. ABDUL KAREEM M.K.
BY ADVS.SRI.J.JULIAN XAVIER
SRI.FIROZ K. ROBIN
RESPONDENTS :
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1. KERALA STATE ELECTRICITY BOARD
REPRESENTED BY ITS SECRETARY, VYDHUTHI BHAVAN, PATTOM
THIRUVANANTHAPURAM, PIN - 695 004.
2. DEPUTY CHIEF ENGINEER, APTS (HQ)
KERALA STATE ELECTRICITY BOARD, VYDHUTHI BHAVANAM
PATTOM, THIRUVANANTHAPURAM, PIN - 695 004.
3. SPECIAL OFFICER (REVENUE)
KERALA STATE ELECTRICITY BOARD, VYDHUTHI BHAVANAM
PATTOM, THIRUVANANTHAPURAM, PIN - 695 004.
4. ASSISTANT EXECUTIVE ENGINEER
APTS, PALAKKAD, PIN - 679 001.
5. ASSISTANT ENGINEER
ELECTRICAL SECTION, VAZHAKKULAM, PIN - 683 117
R1 TO R5 BY ADV. SMT.NAZEEBA.O.H., SC
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01-11-2013,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Mn
...2/-
WP(C).No. 17191 of 2013 (Y)
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APPENDIX
PETITIONERS' EXHIBITS :
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EXT.P1:- TRUE COPY OF MAHAZER DATED 22/8/2005 PREPARED BY THE
ASST.ENGINEER, ELECTRICAL SECTION, VAZHAKKULAM.
EXT.P2:- TRUE COPY OF THE BILL DTD. 23/8/2005 ISSUED BY THE 3RD
RESPONDENT TO THE PETITIONER.
EXT.P3:- TRUE COPY OF THE APPEAL DATED 24/8/2005 FILED BY THE
PETITIONER BEFORE THE 2ND RESPONDENT.
EXT.P4:- TRUE COPY OF THE JUDGMENT DATED 25/8/2005 IN WPC
NO. 25379/2005.
EXT.P5:- TRUE COPY OF THE ORDER DATED 7/6/2007.
EXT.P6:- TRUE COPY OF THE DEMAND DATED 23/7/2007 ISSUED BY THE 3RD
RESPONDENT.
EXT.P7:- TRUE COPY OF THE JUDGMENT DATED 26/8/2011 IN CC NO. 9/2008 OF
THE ADDITIONAL SESSIONS JUDGE, NORTH PARAVOOR.
EXT.P8:- TRUE COPY OF THE JUDGMENT DATED 27/11/2012 IN WPC
NO. 24046/2007.
EXT.P9:- TRUE COPY OF THE ARGUMENT NOTE DATED 6/2/2013 FILED BY THE
PETITIONER BEFORE THE 2ND RESPONDENT.
EXT.P10:- TRUE COPY OF THE LETTER DATED 19/2/2013 ISSUED BY THE 2ND
RESPONDENT.
EXT.P11:- TRUE COPY OF THE LETTER DATED 28/2/2013 FILED BY THE
PETITIONER BEFORE THE 2ND RESPONDENT.
EXT.P12:- TRUE COPY OF THE LETTER DATED 1/3/2013 FILED BY THE COUNSEL
FOR THE PETITIONER BEFORE THE 2ND RESPONDENT.
EXT.P13:- TRUE COPY OF THE AD CARD SINGED BY THE 2ND RESPONDENT.
EXT.P14:- TRUE COPY OF THE ORDER DATED 27/3/2013 ISSUED BY THE 2ND
RESPONDENT.
EXT.P15:- PHOTO SHOWING THE KSEB'S SEAL AS WELL AS LOCK OF THE
METER CUBICLE.
EXT.P16:- COPY OF THE COVERING LETTER DATED 9.7.2013.
(Contd..)
WP(C).No. 17191 of 2013 (Y)
EXT.P16(a):- COPY OF THE REVISED DEMAND.
EXT.P17:- COPY OF THE COVERING LETTER DATED 29.8.2007 FORWARDING THE
CHEQUE TO THE 3RD RESPONDENT.
RESPONDENT(S)' EXHIBITS : NIL
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//TRUE COPY//
P.S. TO JUDGE
Mn
C.K. ABDUL REHIM, J.
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W.P.(c) No. 17191 OF 2013
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DATED THIS THE 1st DAY OF NOVEMBER, 2013.
J U D G M E N T
Proceedings through which penalty was imposed against the petitioner under Section 126 of the Electricity Act, 2003 (the 'Act' for short) is under challenge in this writ petition. The petitioner is an industry which availed electric connection under High Tension (HT) tariff. The Anti-Power Theft Squad (APTS) attached to the 1st respondent Board conducted an inspection at the premises of the petitioner on 22-08-2005. Exhibit P1 mahazer prepared at the time of inspection revealed that, the said inspection was conducted based on an information received by the Chief Vigilance Authority that the petitioner has dismantled seals affixed on the Electric Meter and is adjusting recordings of the Meter so as to reduce the bill amounts. In Ext.P1 mahazer the following defects were noted:
(i) Displacement of Black paint because of scratches occurred around the 'KWH', 'KVARH' and 'KVAH' counters of the meter.
W.P.(c) No.17191/2013 -2-
(ii) There was difference between the actual consumption and the consumption recorded in the 'KVARH' meter of the consumer, which will indicate that there is no consistant proportion with respect to different months leading to an inference that the recording was adjusted in different manner during the various months.
(iii) The seals affixed on the Meter Box was seen as re-fixed after dismantling. The Meter Seals as well as the sealing wires inside the meter re-assembled as new ones and those seals when compared with the seals affixed at the Test Terminal Block and PT secondary fuse unit were seems to be new ones. The impression contained on the led of the seals show different from the normal impression which is being used by the Board.
2. Based on the findings as above, allegation was raised in the Mahazar that the petitioner was making adjustments with respect to recording in the Meter by opening Meter Box, after displacing it seals and by affixing fresh seals by his own.
W.P.(c) No.17191/2013 -3-
3. On the basis of the inspection conducted, the 3rd respondent had issued Ext.P2 Bill imposing penalty on the petitioner to the tune of Rs.28,90,523/-, which was challenged by the petitioner in appeal before the 2nd respondent. Since the electric supply was disconnected on the date of inspection itself, the petitioner had approached this court in a writ petition. In Ext. P4 judgment this court directed the 2nd respondent to consider the appeal. Further, direction was issued to reconnect supply on deposit of an amount of Rs.5 lakhs. This court also imposed a condition that the petitioner should make payment of the balance amount to make up the deposit upto 1/3rd of the amount demanded, within a period of 6 weeks, after the date of reconnection. In accordance with the direction issued, the electric supply was restored. The appeal was considered by the 2nd respondent and disposed of through Ext.P5 order. Discarding all the contentions of the petitioner, especially the contention that there occurred no tampering of the Meter or pilferage of energy, it was found that, the petitioner had opened the Meter Box and Meter Cover and W.P.(c) No.17191/2013 -4- adjusted the 'counter digits' intermittently so as to show a reduced consumption . However, it is observed that the penalty imposed on the basis of the recorded maximum demand is not reasonable. Hence it was directed to recompute the average of the maximum demand recorded during the previous six months period. It was also directed that penalty should be computed on the basis of 0.9 as load factor for 20 hours per day. Ext.P6 is the consequential bill issued on the basis of Ext.P5 order.
4. The petitioner again approached this court challenging Exts.P5 and P6. The said writ petition was disposed of through Ext.P8 judgment. It was contended before this court that the appellate authority had failed to take note of the fact that the Meter Box (Meter Cubicle) was locked by KSEB authorities from outside and that there was no allegation that the petitioner tried to open the cubicle or that he had a second key with him. This court found that the appellate authority has not taken into consideration of those aspects. Hence Exts.P5 and P6 were set aside and the matter was remitted to the 2nd respondent W.P.(c) No.17191/2013 -5- for a fresh disposal of the appeal. The appellate authority was directed to take into account of the materials available on record. The petitioner was permitted to lead additional evidence, if any. It was specifically observed that, the appellate authority should take due care with respect to the allegation of tampering. It was directed to take into consideration of the readings for the past one year period and also the readings with respect to future period after inspection, in order to come to a conclusion regarding the allegation of tampering .
5. In the meanwhile, a criminal case registered against the petitioner ended up in acquittal through Ext.P7 judgment passed by the Additional Sessions Court, North Parur in CC.No.9/2008. When the matter came up for consideration before the 2nd respondent, pursuant to the remand ordered in Ext.P8 judgment, the petitioner had produced Ext.P7 judgment as well as the copy of deposition of all the officers before the criminal court, who had conducted the inspection. A detailed argument note was also submitted, as per Ext.P9. Arguments were heard on W.P.(c) No.17191/2013 -6- the appeal on 6.2.2013. Thereafter the 2nd respondent issued Ext.P10 notice requiring the petitioner as well as two officers of the Board who were present at the time of inspection, for a personal examination. The petitioner objected such a course by submitting Ext.P12 letter stating that, examination of the witnesses is not required, because the petitioner is not disputing their oral testimony before the criminal court. Despite such objection, the appellate authority had recorded statements of those Officers and issued Ext.P14 order disposing the appeal. The appellate authority had arrived at a conclusion based on the material and evidence that available, the consumer was resorting to unfair means for reducing recorded consumption by opening the Meter Cubicle, Meter Cover and by adjusting counters of the Meter with external means. Therefore the penalty imposed was confirmed. It is challenging Ext.P14 this writ petition is filed.
6. The main grounds of challenge raised against imposition of penalty which is confirmed in Ext.P14 can be summarised as follows; It is specifically pointed out that the W.P.(c) No.17191/2013 -7- presence of the Meter Cubicle was omitted to be noticed in Ext.P1 mahazer. The petitioner had produced Ext.P15 photograph showing the position of the Meter Cubicle. It is pointed out that the Meter Box and the entire apparatus of the Electric Meter are enclosed in the Meter Cubicle. Referring to Ext.P7 judgment it is pointed out that PW3 examined therein, who is none other than the Assistant Executive Engineer who was present at the time of inspection, had deposed that the Meter Cubicle was seen locked at the time of inspection with a pad lock provided by the consumer. The above fact was reiterated in the deposition of PW2 who was the Assistant Executive Engineer who is a member of the inspecting team. Specific case of the petitioner is that the Meter Cubicle was under
lock and key of the authorities of the Board and it was sealed. Only after breaking the seals of the Meter Cubicle the meter could be examined. But the very existence of the Meter Cubicle itself is not mentioned in Ext.P1 mahazer. According to the petitioner the omission was willful and malafide.
W.P.(c) No.17191/2013 -8-
7. While appreciating the above contention it is to be noted that the presence of a Meter Cubicle was admitted by the officials of the Board, who were examined before the appellate authority. There is an admission of the Assistant Executive Engineer, APTS, Palakkad that Meter Box (Meter Cubicle) was locked at the time of inspection with an old lock provided by the consumer. According to him one key was with the Assistant Engineer and the other two keys were with the consumer himself. But he admits that the same was not mentioned in the mahazer, because the lock was not provided by the KSEB. It is further stated that Meter Cubicle was provided at an open yard and the consumer might have provided a lock and key arrangement for their internal safety aspects. The Assistant Engineer of the Electrical Section, who was in charge at the relevant time of the inspection had stated that, in order to keep the meter in safe condition it was provided with a lock by the consumer himself. According to him two keys of that lock was with the consumer and one key was kept at the section office. But he had categorically admits that Meter Box W.P.(c) No.17191/2013 -9- (Meter Cubicle) was sealed using KSEB seal after taking reading on every month. But his statement is to the effect that on a close inspection it was made clear that the consumer had opened the lock, presumably by using his keys and the seals were removed using small screw drivers. It is not clear as to whether he is mentioning about the seals in the Meter Cubicle or with respect to the Meter cover. However it is evident that the Meter and other apparatus were kept inside the Meter Cubicle which was locked with a pad lock. If that be so, who had opened the Meter Cubicle for the purpose of inspection and who was keeping the key of the Meter Cubicle are relevant factors which out to have been reflected in the site mahazer prepared. Omission with respect to mentioning about the existence of a Meter Cubicle is relevant, as far as the conduct of an inspection by the APTS and is also relevant in the matter of imposing penalty, alleging unauthorised extraction of energy. Inference of such an omission can only be taken in favour of the consumer.
W.P.(c) No.17191/2013 -10-
8. The petitioner raised strong contention that neither the inspecting team nor the Assessing Officer had never collected conclusive materials or proof for arriving at conclusion about tampering and adjustment of the Meter readings. It is totally on the basis of a mere suspicion and presumption, that the penalty is imposed. The above contention is raised pointing out that the inspection was conducted only after breaking the seals affixed on the Meter Box (Meter Cover). The only allegation is that the sealing wire and sealing led of the meter cover was seen comparatively new with that of the terminal covers. It is further contended that the higher percentage of error noted while comparing proportion of readings, is attributed towards adjustment of the Meter counters, without there being any evidence and without conducting any checking with respect to accuracy of the Meter. Such a method cannot be adopted for penalizing the consumer, is the contention.
9. While appreciating the above contention, it is necessary to examine as to what exactly is the allegations W.P.(c) No.17191/2013 -11- which lead to the imposition of penalty. In Ext.P5, which is the first order passed by the appellate authority, it is specifically mentioned that during the examination it was seen that the black paint around the counter of the meter showing KWH, KVARH and KVAR readings were seen with scratches, due to adjustments done using some tools like Screw Drivers. Further finding was that the percentage of error varied considerably on comparing the meter readings for the previous periods from 3/2005 to 8/2005 and this had convinced the inspection team that the readings were adjusted by the consumer on every month. As far as a surprise inspection is concerned, fact situation revealed at the time of inspection which will be narrated in the mahazer assumes much importance. The inspecting team had conducted inspection based on a specific information that the consumer is breaking the seals of the Meter on every month and is adjusting the registering mechanism of the Meter for showing reduced consumption of energy. The inspecting team had compared the meter readings of the petitioner from the month of 3/2005 onwards. It is found W.P.(c) No.17191/2013 -12- that the recorded reading in KVARH was not tallying with the theoretical conclusions and it showed high percentage of error varying from 0.25% upto 6.16%, in between the months of 3/2005 to 8/2005. Conclusions arrived by the inspecting team is that, since the Meter installed was a class-I meter the percentage of error should not have exceeded 1%. Allegations are levelled in the site mahazer that the seals affixed on the Meter Box (presumably in the Meter Cubicle) was seen as re-fixed after opening. When the seals affixed on the Meter (Meter Cover) were examined, the wires used for sealing (sealing wire) was seen to be comparatively new one when compared with the seals used inside the Meter Box, Test Terminal Block, PT secondary fuse unit etc. The sealing led seems to be new one. Further allegation is that the mark on the seals seems to be different. The inspecting team found that, all the seals are affixed at a time and difference would indicate that the consumer had opened the meter seals for the purpose of adjusting the recorded readings.
W.P.(c) No.17191/2013 -13-
10. For appreciating the above contentions it is necessary to have an evaluation of the depositions of the officers who were present at the time of inspection, given before the Sessions Court, which is dealt with in Ext.P7 judgment. M.O.1 is the Electric Meter. PW1 examined in the case before the Sessions Court is the Assistant Engineer of the Electrical Section concerned. He had admitted that the mark of KSEB was present on M.O.2 series seals and the inspection was conducted after breaking M.O.2 series seals. He deposed that the Assistant Engineer used to go to the premises for recording the meter reading and for the purpose of taking the reading, the seal of the Meter Box would be opened and the MD needle would be reset. PW3 had admitted that, on every month the Assistant Engineer had gone to the premises for the purpose of recording the reading and the Assistant Engineer told that no tampering was found out with respect to functioning of the Meter in the premises of the consumer. PW3 had admitted before the criminal court that, without comparing M.O.1 meter with a standard Meter it is not possible to say whether the error in W.P.(c) No.17191/2013 -14- reading occurred due to old age of the Meter. He has also admitted the M.O.1 meter is old more than 12 years.
11. In this regard it is pertinent to note that, despite seizure of the Electric Meter, the authorities have not taken any steps to conduct testing of its functioning. Whether there exists any mechanical defect or error as to whether the percentage of error had exceeded the normal limits because of any defect on the Meter, was not ascertained and not ruled out. Inspite of serious allegation that the petitioner was tampering with the seals of the Meter cover, no steps were taken to verify from the records as to when the meter was sealed for the last. Admittedly those seals were removed and refixed at the time of recording the meter reading, on every month. When was the last sealing of the meter is not mentioned anywhere. When it is admitted that, for the purpose of recording the meter reading the seals will be removed and re-fixed, there is no merit in contending that all the seals were affixed simultaneously and that the comparative new look of the seals of the Meter cover is crucial in inferring that there W.P.(c) No.17191/2013 -15- occurred tampering. Further, despite the allegation that the marks on the led of the seal seems to be different from the normal marking of KSEB, no scientific examination or comparison in this regard was seen made. There is no comparison made with the normal markings on the 'Sealing Plier' used by the KSEB, in order to confirm the alleged difference in the markings. Eventhough an allegation of scratches on the painting on the meter counter was raised, that by itself cannot be taken as a ground to conclude that any adjustments on the recording was made. In this regard the authorities have not made any effort to verify the date on which the particular meter was installed at the premises of the petitioner. Whether the meter was purchased by the consumer or it is meter belonging to the KSEB. If it belong to KSEB whether it was installed at the premises of the petitioner, for the first time etc., are not seen verified or examined. In nutshell, the authorities have not taken any precaution or efforts to arrive at foul proof conclusions regarding the allegation of tampering or adjustment of the meter reading.
W.P.(c) No.17191/2013 -16-
12. In this regard it is pertinent to note that, imposition of penalty under Section 126 is plenary in nature. An assessment is made only as a penal consequence for unauthorised usage of electricity. The Assessing Officer can impose penalty only if he is arrives at a conclusion that the consumer had indulged in unauthorised use of electricity. In the case at hand, the allegation is that there occurred unauthorised usage by tampering of the consumption recording mechanism. When such an allegation is made, it is the duty of the authorities to pinpoint with conclusive evidence and proof regarding such tampering and about the adjustment done in the actual recordings. Going by the failures enumerated as above, with respect to arriving at any conclusion regarding tampering of the meter, imposition of penalty based on mere suspicions or presumptions cannot be sustained legally. None of the possible methods through which the alleged tampering could have been established, were omitted to be adopted by the authorities. When the various factual aspects are remaining adverse against the allegations and W.P.(c) No.17191/2013 -17- when the authorities have failed to discredit those adversaries through available methods of technical examinations and comparisons, the petitioner need to be exonerated from penal consequences, without there being clear proof regarding the tampering and extraction of energy.
13. Further, it is very pertinent to note that, if at all any tampering of the seals and purposeful adjustment of the recording was done, the same can be alleged only after recording of the Meter reading and sealing of the Meter cover, during the last month of the inspection. Therefore, without there being any evidence, no allegation could be raised that such tampering might have occurred during the previous months. Penalty could not be imposed against the petitioner for the period adopted in the order of assessment. Comparison made in the readings noted and the alleged variation in the percentage of error by itself cannot be taken as a ground to impose penalty, especially when the accuracy of the meter was not tested. Therefore this court is of the considered opinion that imposition of penalty based W.P.(c) No.17191/2013 -18- on the inspection mahazer, which is adopted by the Assessing Officer as the sole material, upon which the assessment is made, cannot be accepted legal and sustainable.
14. Learned counsel had raised an allegation that, the inspection was conducted during the period when the KSE Board had declared special incentive of 20% of the amounts collected by way of penalty, to those officials who detected the irregularities. According to the counsel, the allegation of tampering and assessment of penalty was with a malafide intention to grab the benefit of incentive declared. This court is of the considered opinion that an adjudication based on such an allegation is not warranted in view of the findings already rendered in the foregoing paragraphs.
15. In the result the writ petition succeeds and Ext.P2 penal assessment which was ultimately confirmed in appeal through Ext.P14 order of the appellate authority are found to be unsustainable and are hereby quashed.
16. The amounts already remitted by the petitioner by virtue of various interim orders passed by this court shall be W.P.(c) No.17191/2013 -19- refunded/adjusted to the petitioner, within a period of 3 months, from the date of receipt of copy of this judgment. However, considering the dispute existed and the prolonged litigation conducted, it is declared that the petitioner will not be entitled for any interest on the amount which is ordered to be refunded/adjusted as above.
Sd/-
C.K. ABDUL REHIM JUDGE AMG True copy P.A. to Judge