Madras High Court
Infosys Limited vs Superintending Engineer on 23 May, 2024
Author: J.Nisha Banu
Bench: J.Nisha Banu
W.A.No.1680 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on 17.07.2025
Delivered on 24.09.2025
CORAM
THE HONOURABLE MRS.JUSTICE J.NISHA BANU
AND
THE HONOURABLE MR.JUSTICE M.JOTHIRAMAN
W.A.No.1680 of 2024
Infosys Limited,
# 44, Infosys Avenue,
Electronics City, Hosur Road,
Bangalore-560 100, India,
also at
Techno Park SEZ,
Mahindra World City, Chengalpattu
Kancheepuram District-600 304.
... Appellant
Versus
Superintending Engineer,
TANGEDCO,
Chengalpattu ... Respondent
Prayer: Writ Appeal is filed under Clause 15 of the Letters Patent, praying
to set aside the order dated 23.05.2024 passed by learned single Judge in
W.P.No.1839 of 2021.
1/51
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W.A.No.1680 of 2024
For appellant(s): Mr.Vijay Narayanan, S.C.
For M/s.King and Patridge
For Respondent(s): Mr. P.Wilson, S.C.
For Jai Venkatesh, St.counsel
JUDGMENT
(By J.Nisha Banu,J.) This Writ Appeal has been directed against the order dated dated 23.05.2024 passed by learned single Judge in W.P.No.1839 of 2021.
2. The brief facts, which led to the filing of the present appeal are as follows:
2.1 The appellant company has been granted electricity service connection vide HT SC No.447 in the year 2005 under HT Tariff-IA, which is industrial category purpose. The appellant, as a welfare measure to their employees, has established food courts, shopping outlets for essential items, ATM and gymnasium, etc. in their campus. According to the appellant, they do not collect water and electricity charges from the operators of the above outlets. It appears that while reviewing HT Accounts for the year 04/2007 to 03/2008, the AG Audit has raised an audit objection vide Audit Enquiry 2/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 No.23, dated 20.05.2009 to a tune of Rs.4,50,18,325/-. Thereafter, by order, dated 07.11.2020, the respondent made a demand for payment of Rs.6,72,95,384/- towards shortfall amount due to wrong application of Tariff for the period 04/2009 to 11/2011 and in the same order, it was communicated that the current consumption bill pertaining to the appellant company will be billed under the Commercial Tariff HT-TF III instead of HT-IA. The grievance of the appellant is that they are engaged in Software development (IT) activities only and there are no activities being carried out relating to ITES in the campus of Mahindra World City, however, to their shock and surprise, by the impugned order dated 07.11.2020, the respondent arbitrarily directed the appellant to pay the shortfall amount and that the current consumption charges will be billed under Commercial Tariff until the segregation of activities of the above said outlets. According to the appellant, the certificate issued by the Development Commissioner, MEPZ and the SOFTEX forms would confirm that the appellant is carrying only software development and does not carry any commercial activities and further, the consumption of electricity power by the said outlets does not involve more than 4% of the energy consumed by them. It is the case of the 3/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 appellant that the claim of shortfall amount made after a period of eight years, is barred by limitation in terms of Section 56(2) of the Electricity Act, 2003. Challenging the impugned order, dated 07.11.2020, the appellant has moved a Writ Petition.
2.3 The said Writ Petition was resisted by the respondent by filing a counter affidavit, stating that based on the audit objection, the respondent demanded the shortfall amount in the year 2012, however, the appellant has not paid the same and the moment the demand is made, it becomes a sum due and the non-payment every month becomes a continuing cause of action and in the records of the respondent, the said amount is continuously shown as recoverable amount and thereby, the claim of the respondent is not barred by limitation. It is further stated that the appellant is collecting certain amounts from the outlets and if the facilities are extended to the public or the premises are leased out to service providers which provide service in their own name or rent is collected, then the energy consumption must be metered separately. With these averments, the respondent sought for dismissal of the Writ Petition.4/51
https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 2.4 On consideration of the contentions putforth by the learned counsel on both sides, learned single Judge came to the conclusion that since the appellant being engaged in both software development and information technology enabled service, within the same premises, it is appropriate to adopt higher tariff which is the norms, in the case of service engaged in two types of activities, within the same premises and as such, while finding no infirmity or illegality in the impugned proceedings to interfere with the same, dismissed the Writ Petition.
2.5 Questioning the order of the learned single Judge as well as challenging the original impugned order, dated 07.11.2020, Mr.Vijay Narayanan, learned Senior counsel at the out set would vehemently contend that the appellant was not engaged in ITES activities at all in the Unit as it is carrying on only Software development and not BPO services which are covered under ITES, as such, the applicability of HT-III (Commercial) tariff does not arise and in this regard, he would refer to the Certificate issued by the Office of the Development Commissioner dated 06.07.2010, wherein, it was certified that the appellant are engaged in Software development only 5/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 and as such, they may be considered as a Unit approved for development of Software and thereby, the impugned order, dated 7.11.2020 demanding payment of shortfall amount to the tune of Rs.6,76,09,540 as well as the order of the learned single Judge confirming the impugned order, cannot stand and liable to be set aside.
3. He would point out that on earlier occasion, the respondent issued demand notice, dated 19.07.2012, claiming shortfall amount of Rs.6,72,95,384 for the period from 04/2009 to 11/2011, for which, the appellant, vide detailed reply, dated 25.07.2012, has clarified that the appellant was engaged only in Software Development and not carrying out ITES in Mahindra World City and thereafter, there was no communication or demand from the respondent till the year 2020, however, after a period of more than eight long years, a show cause notice, dated 19.10.2020 was issued to the appellant as to why the alleged shortfall amount should not be collected, which is barred by limitation by virtue of Section 56(2) of the Electricity Act, 2003 which mandates that no electricity dues can be recovered from a consumer after two years from the date the sum became 6/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 first due. Further, no bills were sent continuously showing the said shortfall amount as arrears of charges of electricity recoverable from the appellant. Therefore, the learned Senior counsel would contend that the impugned demand notice, dated 07.11.2020, directing the appellant to pay shortfall amount of Rs.6,72,95,384/- does not satisfy the mandatory requirement of sub-section (2) of Section 56 and hence, the same is barred by limitation and cannot be sustained and liable to be set aside. In this regard, the learned Senior counsel relied upon the following decisions, viz.,
a) “MSED Co. versus Electricity Ombudsman”, (2019 (2) Mh.L.J.,) wherein, the Hon'ble Supreme Court has held that the Electricity Act 2003 has a special period of limitation of two years. The licensee can recover the amount due from the consumer only for a period of two years when such sum became first due. The Distribution Licensee cannot demand charges for consumption of electricity for a period of more than two years preceding date of the first demand of such charges. Relevant portion in paragraphs 66 and 67 is extracted as under:
“66. By sub-section (2), the category or the 7/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 beneficiary of electric supply, namely, the consumer, is covered. As far as that consumer is concerned, by an overriding effect, sub-section (2) says that section 56, which may have a marginal heading as disconnection of supply in default of payment, but so far as the consumer is concerned, no sum due from him under section 56 shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrears of charges for electricity supplied. If this condition is satisfied, then alone the licensee shall cut-off the supply of electricity and not otherwise. Now the issue raised before us is very specific. We do not think that there is any difficulty or confusion in understanding the ambit and scope of the section. Sub-section (2), which is not in the nature of a proviso, as contended by the learned Advocate General, but is an independent provision which applies only to consumers. All the words and expressions that are employed and used in the section in hand have been defined. Unless the context otherwise requires, the definition is as set out in section 2 and its clauses. In the case of sub-section (2) of section 56, it is the consumer to whom the electricity is supplied. He 8/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 cannot be vexed in the event the licensee is negligent in recovering the amount due. The licensee can recover the amount due from the consumer only for a period of two years when such sum became first due. In the event, after two years the licensee wants to recover the amount, then it is the obligation and duty of the licensee as well to show the sum due from the consumer continuously as recoverable as arrears of charges for the electricity supplied to the consumer. The supply may be already effected and the charges may be unpaid. However, in the running/monthly bills which are despatched to the consumer, such sum has to be continuously shown as recoverable as arrears of charges of electricity and then alone, after the period of two years, the recovery is permissible/ The precondition for disconnection of electricity in the case of any consumer is distinctly set out. In addition to a fifteen days' clear notice in writing before disconnection, the licensee must also satisfy the Court or the Legal Forum that there was not only a neglect to pay on the part of the consumer but additionally the licensee has initiated the steps in terms of this provision before the expiry of two years. In case this section is invoked against any consumer after two 9/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 years, then, action in terms thereof will be permissible only after the sum which was first due has been shown continuously or carried as recoverable as arrears of charges for the electricity supplied. This is ordinarily done by intimating or notifying to the consumer, in the running or monthly bills, such arrears together with the charges for the electricity supplied in the given month.
67. So understood, we do not see any difficulty or any conflict and if the action is challenged in a Court of law, that Court will have to decide the issue on a case-to-case basis. The fulfilment of condition as set out in the sub-sections will be an issue to be decided on the basis of the facts and circumstances in each case. No general rule can be laid down. In terms of the specific conditions of the provision, the fulfilment thereof, in a given case, can be determined, decided and adjudicated upon. If the action is challenged on the ground that the preconditions are not satisfied, then as well, a decision will depend on the facts and circumstances of each case. There cannot be any conflict or confusion once the matter is approached in this manner.”
b) “Ajmer Vidut Vitran Nigam versus Rahamathulla” (2020) 4 SCC 10/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 650, wherein, the Hon'ble Supreme Court has held that limitation of two years provided by Section 56(2) of the Act, not applicable to raise an additional or supplementary demand. Time will start to run afresh from the date of discovery of mistake, in other words, Section 56(2) will apply for additional or supplementary demand after it became first due. In para 7.3 to 7.5,, it has been observed as under:
7.3 In Swastic Industries v. Maharashtra SEB (1997(9) SCC 465, this Court while interpreting Section 24 of the Electricity Act, 1910 held that: (SCC p. 467, para 5) "5. It would, thus, be clear that the right to recover the charges is one part of it and right to discontinue supply of electrical energy to the consumer who neglects to pay charges is another part of it."
7.4. Sub-section (1) of Section 56 confers a statutory right to the licensee company to disconnect the supply of electricity, if the consumer neglects to pay the electricity dues. This statutory right is subject to the period of limitation of two years provided by sub-section (2) of Section 56 of the Act.
7.5. The period of limitation of two years would commence from the date on which the electricity charges became "first due" under sub-section (2) of Section 56. 11/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 This provision restricts the right of the licensee company to disconnect electricity supply due to non-payment of dues by the consumer, unless such sum has been shown continuously to be recoverable as arrears of electricity supplied in the bills raised for the past period. If the licensee company were to be allowed to disconnect electricity supply after the expiry of the limitation period of two years after the sum became 'first due' it would defeat the object of Section 56(2).
c) “Prem Cottex versus Uttar Haryana Biji Vitran Nigam Limited” (2021) 20 SCC 200, wherein, the Hon'ble Supreme Court has held that no sum can be recovered after two years from when it first became due. The period of limitation prescribed under Section 56(2) will not start running till the bill is raised and so long as limitation has not started running, the bar for recovery and disconnection will not come into effect. In paragraphs 13 and 14, it has been observed as under:
“13. But a careful reading of Section 56(2) would show that the bar contained therein is not merely with respect to disconnection of supply but also with respect to recovery. If sub-section (2) of Section 56 is dissected into two parts it will read as follows:12/51
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(i) No sum due from any consumer under this section shall be recoverable after the period of two years from the date when such sum became first due; and
(ii) the licensee shall not cut off the supply of electricity.
Therefore, the bar actually operates on two distinct rights of the licensee, namely, (1) the right to recover, and (ii) the right to disconnect. The bar with reference to the enforcement of the right to disconnect, is actually an exception to the law of limitation. Under the law of limitation, what is extinguished is the remedy and not the right. To be precise, what is extinguished by the law of limitation, is the remedy through a court of law and not a remedy available, if any, dehors through a court of law. However, Section 56(2) bars not merely the normal remedy of recovery but also bars the remedy of disconnection. This is why we think that the second part of Section 56(2) is an exception to the law of limitation. “14. Be that as it may, once it is held that the term "first due" would mean the date on which a bill is issued, (as held in para 6.9 of Rahamatullah Khan case (2020 (4) SCC 650 and once it is held that the period of 13/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 limitation would commence from the date of discovery of the mistake (as held in paras 9.1 to 9.3 of Rahamatullah Khan), then the question of allowing licensee to recover the amount by any other mode but not take recourse to disconnection of supply would not arise. But Rahamatullah Khan case says in the penultimate paragraph that "the licensee may take recourse to any remedy available in law for recovery of the additional demand, but barred from taking recourse to disconnection of supply under sub-section (2) of Section 56 of the Act".
4. Therefore, the learned Senior counsel would contend that when once the the period of limitation of two years would commence from the date on which the electricity charges became first due under Section 56(2) and admittedly, in the present case, the first demand notice was issued in the year 2012, demanding to pay shortfall amount, later, it was dropped on consideration of the reply, dated 25.07.2012 submitted by the appellant and till the year 2020, it has not been continuously shown in any of the subsequent bills as recoverable arrears of electricity consumption charges, as such, issuance of impugned order, dated 07.11.2020 after a lapse of 8 14/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 years, is barred by limitation and is liable to be set aside. He would point out that the learned Judge has not discussed this issue in detail and failed to hold that the impugned demand is barred by limitation.
5. The learned Senior counsel would further contend that by the original impugned order, dated 07.11.2020, it was communicated that the entire current consumption bills of the appellant will be billed under Commercial Tariff (HT-III) until the segregation of activities, like shopping outlets, bank, ATM centre, food courts and gymnasium, etc., but as a welfare measure, the appellant has established the branded food courts, shopping outlets, ATM, etc., for essential services and the appellant is not collecting electricity and water charges from the operators of the said outlets and the activity of providing facilities by the appellant company to its employees through outsourcing at subsidized rates without any profit, is a welfare activity and the same cannot be considered under commercial category to attract Commercial Tariff. In this regard, he referred to the tariff Order in T.P.No.1 of 2017, dated 11.08.2017 of the Tamil Nadu Electricity Regulatory Commission passed as regards determination of Tariff for 15/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 Generation and Distribution, wherein, Clause 5.2.2.6 reads as under:
“Commercial view:
“It is clarified that if facilities provided by the industrial unit to employee have been outsourced to a private player but they cater to employees of only that particular industrial unit, then such activity cannot be considered under commercial category, as mere outsourcing does not change the purpose of service being rendered. However, if part/entire premises are leased/rented out to a service provider like food outlets, viz., McDonalds, Saravana Bhavan, Adayar Ananda Bhavan, KFC, etc., present in food courts, which provide service in their own name, then such activity will have to be metered separately sub-metered and categorised under LTV Tariff.”
6. He would further submit that the respondent had carried out a complete inspection on 04.12.2020 and computed the maximum load of the above said outlets is 305 KVA as against the total load of 8275 KVA from the separate meters installed by the appellant and thus, it is clear that the total metered current consumption of the outlets is only 3.68% and hence, 16/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 the application of commercial tariff to the entire unit is arbitrary. He would point out that pursuant to the status report filed by the respondent stating that after physical and electrical segregation of loads, the appellant has to apply for separate service connection along with fixing of meters to measure and assess separately the consumption of electricity by commercial activities within HT premises, the appellant vide letter dated 15.04.2025, communicated to the respondent bringing to its knowledge that the appellant has completed the electrical panel segregation activities both electrically and physically to install the sub meters for the outlets by incurring 96 lakhs, but the respondent has deliberately avoided installing meters and vide letter dated 30.06.2025, the respondent arbitrarily rejected the request of the appellant on the account of the segregation not being in line with the TNPDCL guidelines. The learned Senior counsel would submit that the total energy consumption of the outlets amounts to 4% of the total energy consumption of the unit, while so, imposition of commercial tariff to the entire unit is arbitrary. With these contentions, the learned Senior counsel would urge this Court to set aside the order of the learned single Judge and consequently, the original order, dated 7.11.2020 17/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 impugned in the Writ Petition.
7. On the other hand, Mr.P.Wilson, learned Senior counsel for Mr.Jai Venkatesh, learned Standing counsel for the respondent (TANGEDCO) would contend that the appellant was engaged in the activities of software development and also information technology enabled services (ITES) as certified by MEPZ Letter of approval dated 09.05.2005 and as per Board Memo No.77 dated 02.02.2008 and TNERC's tariff order dated 15.03.2003, the basic service providers and Information Technology enabled services including business outsourcing are to be charged under HT Tariff-III (Commercial) for HT Services and LT Tariff V (Commercial) for LT services. He pointed out that the certificate issued by MEPZ, dated 09.05.2005 provides sufficient proof that the appellant being engaged in both software development and information technology enabled services and as no separate means was adopted to ascertain the activity of the appellant company, in view of the clarification orders issued by the Commission, vide order No.31 of 2010 dated 08.11.2010, the service of Appellant is liable to be classified under HT Tariff-IA applicable to 18/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 Information Technology Services with effect from 01-08-2010 and prior to 01.08.2010 when the earlier tariff order No. 01 of 2002 was in force, the service of the appellant was to be classified under HT Tariff-III. Further, it cannot be said that the demand made by the respondent is barred by limitation as per Sub Clause 2 of section 56 of the Electricity Act, 2003 since as per the Tamil Nadu Electricity Regulatory Commission's order No. 3 of 2010 dated 31.07.2010 and as per Clause 9.10.4.8, the HT/LT services of information technology enabled services or private communication providers will be charged under HT tariff III or LT tariff V and accordingly, the difference to be collected from the Appellant from April, 2009 to August, 2010 was Rs. 2,34,85,411/- under the HT Tariff III while the principle amount liable to be paid by the Appellant then was Rs.6,72,95,384.
8. The learned Senior counsel would also submit that pursuant to the directions of this Court, the respondent conducted an inspection of the appellant premises on 04.07.2024 and found that the activities carried out by the appellant are liable to be charged under commercial tariff-III and 19/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 there was no physical and electrical segregation or separate service connections for billing under different tariff for different activities as per the norms. Further, the appellant provided commercial facilities to their employees, viz., food court, club houses, shopping outlets, gymnasium, etc. to branded companies by entering into rental agreement with them, which are rendering their services for profit and under the guise of welfare measure to their employees, these facilities being provided and they were not collecting any electricity or water charges from them, the appellant is attempting to thwart the right of the respondent to demand and levy appropriate tariff as per the norms of TNERC.
9. As regards the contention raised on behalf of the appellant that the demand of shortfall amount vide impugned order dated 7.11.2020 is barred by limitation in terms of Section 56(2) of the Act is concerned, the learned Senior counsel would contend that the limitation provided under the provision is not applicable for recovery of arrears made by the respondent. He referred to Section 56 of the Electricity Act, 2003 and submit that the provision relates to disconnection of supply in default of payment and sub 20/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 Section 2 of the provision dissected into two actions, viz., i) to recover the charge of Electricity by filing a suit and ii) to cut-off supply of electricity till the charge for electricity is paid. The action to cut-off the electricity requires 15 days notice. Clause 2 of the said Section 56 states that there can neither be recovery nor the electricity supply be cut-off 2 years after the amount became due. However, the caveat for the above is the sum due must be shown as continuously as recoverable as arrears of charges. In this regard, he pointed out that based on the audit objection, the respondent demanded the shortfall amount in the year 2012, but the appellant has not paid the same and the moment the demand is made, which by itself, became as a first due and the non-payment every month becomes a continuing cause of action and in the records of the respondent, the said amount has been continuously shown as recoverable and thereby, the applicability of Section 56(2) to hold that the claim made by the respondent is barred by limitation, does not arise. Further, this provision does not preclude the respondent from raising the demand even after expiry of the limitation period of two years, but it can only restrict the right of the respondent to disconnect electricity supply due to non-payment of dues after the period of limitation of two years has 21/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 expired, nor does it restrict other modes of recovery which may be initiated by the respondent for recovery of the dues from the appellant. He would rely on a decision of the Hon'ble Supreme Court in “Pretam Cortex versus Uttar Haryana Biji Nigam Litd” (2021) 20 SCC 200, has observed that the limitation provided under Section 56 of the Electricity Act, 2003 is applicable only for the disconnection and not for the demand of dues by the Board. He would also rely on another decision of the Hon'ble Supreme Court in “K.C.Ninan versus Kerala State Electricity Board” (2023 SCC Online SC 663), wherein, it was observed that the Electricity Board is entitled to recover arrears, while supply of electricity cannot be sought as a right and the same is subject to condition as stipulated by the Board under Section 50 of the Electricity Act, 2003. He would refer paragraphs 94 & 95, which read as under:
“94. Apart from protecting a public good, such conditions also have a reasonable nexus with objects of the 2003 Act, such as a robust development of the electricity industry, protecting the interests of consumers as well as the financial interests of the distribution licensees. The need to protect the financial interests of distribution licensees has been 22/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 explicitly recognized in Section 61 of the 2003 Act which empowers the Appropriate Commission to specify the terms and conditions for the determination of tariff in accordance with commercial principles. ...” “95. The Conditions of Supply and Electricity Supply Code which require the payment of electricity dues of a previous owner as a condition for the grant of an electricity connection have a clear nexus to the scheme of the parent legislations and the objectives sought to be achieved. It is just and reasonable for distribution licensees to specify conditions of supply requiring the subsequent owner or occupier of premises to pay the arrears of electricity dues of the previous owner or occupier as a pre-condition for the grant of an electricity connection to protect their commercial interests, as well as the welfare of consumers of electricity.”
10. The learned Senior counsel would submit that original impugned order dated 07.11.2020 is of two fold, firstly, it demands for payment of Rs.6,76,540.12/- and secondly, to bill the consumption charges under the commercial tariff until segregation of commercial activities. Admittedly, in 23/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 the appellant premises, there are different activities claimed to be provided for staff welfare, such as, food court, shopping outlets, gymnasium, etc., but no segregation or separate connections were provided nor they were billed separately. He would refer to para 6.1.1.3 Tariff Order of the year 2017, which reads as under:
“6.1.1.3 ... Supply used for creating facilities for the compliance of Acts/Laws or for the facilities incidental to the main purpose of the establishment of the consumer, such as their facilities extended to employees/students/ patients/residents as the case may be, within the premises of the consumer, shall be considered to be bonafide purpose, irrespective of whether they are outsourced to a third party of provided by the consumer himself. However, if such facilities extended to the public, or if part/full premises are leased/rented out to a service provider like food outlets present in food court, which provide service in their own name, the energy consumption to such facilities shall be metered by the license separately and only the energy charged under appropriate LT tariff. Such metered energy consumption shall be deducted from the total energy 24/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 consumption registered in the main meter of the HT/EHT supply for billing.” and submit that since the appellant has not provided any physical segregation in their premises for want of change of Tariff and the respondent is unable to waive their liability to pay the demand for the unauthorized adaptation in the past. He also submitted that the appellant is liable to pay a total sum of Rs.14,67,17,663/- with BPCL till 30.06.2025 and unless the appellant clears this due, new applications for supply of energy could not be processed in terms of Regulation 27 of the Tamil Nadu Electricity Distribution Code.
11. The learned Senior counsel would refer to Section 45 of the Act and submit that the respondent is entitled to collect necessary dues for the electricity supplied by it in accordance with the tariff fixed by the State Commission. In this regard, the learned Senior counsel would refer to paragraph 86 from the decision in 'K.C.Ninan case (cited supra) which reads as under:
“86. The 2003 Act lays down the legislative framework for generation, transmission, distribution, 25/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 trading and use of electricity in India. In the process, the Parliament has also conferred discretion on the regulatory authorities, particularly the Central Commission and State Commission, to work out further details within the framework of the legislative policy laid down in the legislation. While making subordinate legislation, the delegated authority has to act within the confines of the plenary legislation. The rules or regulations enacted by the Central Commission or State Commission cannot override the 2003 Act by stipulating inconsistent provisions or by supplanting the parent statute.”
12. Ultimately, the learned Senior counsel would submit that providing comprehensive facilities to its employees by the appellant company as a welfare measure, would certainly boost productivity and profitability for the appellant company and it would lead to higher output and greater profits for the company, however, it is not reasonable for the appellant company to provide such commercial facilities to their employees at the cost of the respondent by claiming that they are entitled to be charged only under concessional industrial tariff. He would submit that already TANGEDCO is running in loss since incurred heavy debts towards 26/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 purchase of power from different power generating companies and it is not fair and appropriate on the part of the appellant to frustrate the payment of the consumption charges under HT Tariff III (Commercial) as per the norms of TNREC and challenge the impugned proceedings, which were rightly issued by the respondent levying the current consumption charges under Commercial tariff, which requires no interference and the learned Judge has also rightly dismissed the Writ Petition.
13. With these contentions, the learned Senior counsel sought for dismissal of the Writ Petition.
14. Heard the learned Senior counsel for the appellant and the learned Senior counsel for the respondent/TANGEDCO and perused the entire materials available on record.
15. The Tamil Nadu Regulatory Commission (TNERC) is the State's independent body responsible for regulating the electricity sector including determining tariffs for generations, transmission and supply, etc. TNERC 27/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 acts as a quasi judicial body, under the provisions of the Electricity Act, 2003 and other specific Acts and regulations in Tamil Nadu. In exercise of the powers vested under Section 29 of the Electricity Regulatory Commission Act, 1998, the Tamil Nadu Electricity Regulatory Commission, Chennai issued first Tariff Order dated 15.03.2003 in T.P.No.1 of 2002 which came into force w.e.f.16.03.2003, wherein, it was clarified that HT Tariff I-A is applicable to all the industrial establishments and registered factories which include tea estates, textiles, software industries, etc, while HT Tariff III is applicable to all commercial establishments and other categories of consumers not covered under HT Tariffs 1-A, II-A, II-B, IV and V. By virtue of this Tariff Order, the Software industries are entitled to be classified under HT-IA tariff including the appellant herein.
16. Based on the above said Tariff Order, dated 15.03.2003, the Tamil Nadu Electricity Board (Accounts Branch), vide proceedings dated 02.02.2008, has instructed as under:
“As per TNERC order dated cited under reference (Tariff Order dated 15.03.2003), basic service providers and IT Enabled Services are to be charged under HT tariff III for HT Services and LT Tariff for 28/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 LT Services.
The list of basic service providers and IT Enabled services are as follows:
I. Private Communication providers (BSNL, Reliance, Aircel, Alrtel, Hutch, Tata Indicom etc.) II. IT Enabled services:
Medical Transcription Legal Database Processing Digital content development/ animation Remote Maintenance Back office operations - Accounts, financial services Data processing Call centers Engineering and Design Geographic Information Services Human Resources Services Insurance Claim Processing Payroll Processing Revenue Accounting Support Centres Website Services (Internets) Business Process Outsourcing (BPO'S) It seems that some BPOs and Call Centres are being charged under Industrial Category (1/e) HT Tariff I or LT Tariff IIIB. This is wrong application of tariff by the respective field officers and the bills have to be revised.29/51
https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 It is reiterated that basic service providers and IT Enabled services are to be charged under HT Tariff III for HT services and LT Tariff V for LT services and it is instructed to revise the tariff for these services and back period arrears of two years from the date of change of tariff may be collected. Also the applicable tariff has to be based only on the Tariff Orders of Tamil Nadu Electricity Regulatory Commission and not on any other document. Whenever there is any deviation in this regard It will be viewed seriously.
Receipt of this memo should be acknowledged and action taken report on the above sent to Director/Tariff cell.”
17. Thereafter, the next Tariff Order No.3 was issued by the TNERC on 31.07.2010 and the relevant portion, is extracted as under:
“9.10.4 IT Industries 9.10.4.1 The TNEB in their letter dated 12.04.2010 have informed the Commission as follows:
“Government of Tamil was addressed for the provision of tariff subsidy to charge Basic Service providers and IT Enabled service under Industrial tariff. Since the chance of getting subsidy from Government of Tamil Nadu for this this category appear to be meagre, these services may be charged under Industrial tariff as per IT policy of Government. The revenue impact has been furnished separately.
2.0 In this connection, it is to be stated that as per Information Communication Technology (ICT) 30/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 Policy of Tamil Nadu 2008 under para (5) , the following definition of terminologies are used:
3.0 IT-ITES Companies will include IT Service (ITS), IT Enabled Services (ITES), Private Communication Providers PCPS), software Industries, IT maintenance and servicing units and hardware units as covered in IT Policy 1997.
a) IT Services are broadly defined as systems Integrations, processing services, information services outsourcing, packaged software support and installations, hardware support and installation.
b) IT enabled services are human intensive services that are delivered over telecom networks or the Internet to the range of business segments which will include
- Medical Transcription
- Legal Database processing
- Digital content development/animation
- Remote maintenance
- Back office operation - Accounts/Financial service
- Data processing
- Call centers
- Engineering and Design
- Geographic Information service - Human Resource Services
- Insurance claim processing
- Payroll Processing
- Revenue Accounting
- Support Centers
- Website Services
- Business Process Outsourcing (BPOs)
c) Private Communication providers include Class A, Class B and Class C -Internet Service Providers, 31/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 Right of way Memorandum of Understanding (MOU) holders, Basic Service Providers and value added service providers like the Common Service Centres operators in the State."
9.10.4.5 The Chairman, TNEB in his letter dated 22- 7-2010 has informed the Commission as follows:-
"In continuation to the letter cited under reference, the following are submitted"-
"2.0 The Government at this current juncture proposes to maintain the status quo ante and continue with the existing tariff classifications for Information Technology Services, Information Technology Enabled Services and private communication providers. A copy of the letter received from Government is enclosed for ready reference.
3.0 Under the above circumstances it is submitted that tariff for HT and LT of Information Technology Services alone may kindly be continued in HT Tariff / private communication providers may kindly be continued in HT Tariff III/IA/LT Tariff III B respectively and HT and LT services of IT Enabled services LT Tariff V respectively as at present. 4.0 TNEB shall also request for most urgent orders on its tariff revision proposal presently under consideration by the TNERC.
9.10.4.6 The latest proposal of the TNEB is that HT and LT service connections of Information Technology Services may be granted HT Tariff IA/LT Tariff III B and HT/LT services of IT Enabled Services /private communication providers may be continued in HT Tariff III / LT Tariff V. 9.10.4.7 Therefore, the Commission decides to adopt 32/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 HT Tariff IA/LT Tariff III B for Information Technology Services as Information Communication Policy (ICT Policy) 2008 of Government of Tamil defined in the Nadu. The definition is reproduced below:
"IT services are broadly defined as systems integration, processing services, information services outsourcing, packaged software support and installation, hardware support and installation."
and consequently, the Commission has ordered tariff as under:
9.11.2 HIGH TENSION TARIFF I-A:
..... ..... .....
..... ..... .....
9.11.2.1 This tariff is applicable to all industrial establishments and Registered factories which includes Tea Estates, Textiles, Fertilizers, Salem Steel Plant, Heavy Water Plan, Chemical Plant, common effluent treatment plant, Cold storage units, Information Technology Services.
Information Technology Services as defined in the Information Communication Policy (ICT Policy) 2008 of Government of Tamil Nadu. The definition is reproduced below:
IT Services are broadly defined as systems integration, processing services, information service outsourcing, packaged software support and installation, hardware support and installation.” ...
..... ..... .....
..... ..... .....
9.11.7 HIGH TENSION TARIFF III ..... ..... .....33/51
https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 ..... ..... .....
9.11.7.2 IT Enabled Services/private communication providers will be charged under this tariff.”
18. Subsequent to the above, a Clarificatory Order No.3-1 of 2010 dated 08.11.2010 was issued by TNERC which came into force w.e.f. 01.08.2010, wherein, the category of services which were covered under each group of Information Technology Services as provided in Tariff Order No.3 of 2010, has been specified as under:
1. System integration includes a. Network Management Services b. Application Integration
2. Processing services includes a. Outsourced services in Banking, HR, Finance, Technology and other areas b. Outsourced Back office support for Business transformation and process consulting services.
3. Information Services Outsourcing includes
a) Outsourced Global Information Support Services a.
b) Knowledge Process Outsourcing b.
c) Outsourced Global Contact Centre Operations
d) Outsourced Process Consulting Services
4. Packaged Software Support and Installation includes 34/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024
a) Software design and Development, Support and Maintenance
b) Application installation, support & maintenance
c) Application testing
5. Hardware Support and Installation includes
a) Technical and network operations support
b)Hardware installation, administration and management
c) Hardware infrastructure maintenance and support
19. A reading of the above, it is clear that TNERC has clearly specified the services which can be considered under HT-1A under Information Technology Services.
20. In the present case, the appellant has made an application on 22.04.2005 to the Department of Commerce (MEPZ, Chennai) seeking permission under the Special Economic Zone Scheme for setting up a manufacturing unit, Mahindra SEZ and by proceedings dated 09.05.2005, the appellant was granted permission to set up Mahindra Industrial Park, for the manufacture of the following items up to the capacities specified below on the basis of maximum utilization of plant and machinery, viz., 35/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 Item(s) of manufacture/Service Unit Annual capacity SOFTWARE DEVELOPMENT & EXPORTS NA NA SOFTWARE CONSULTANCY & BPO
21. Thus, by the above said proceedings, dated 09.05.2005, it is clear that the appellant company is undertaking both Software Development & Exports, Software Consultancy and Business Process Outsourcing (BPO). At this relevant point time, the Tariff Order in T.P.No.1 of 2002 dated 15.03.2003 which was in force, wherein, Clause 2.0 and 5.0 are relevant and the same are extracted hereunder:
2.0 High Tension Tariff 1-A Tariff Category Rate in paise per KWHr Rate inrupees (nit) – energy Charges per KVA of Maxium Demand HT Tariff 1-A 350 300
i) This tariff is applicable to all the industrial establishments and registered factories which includes tea estates, textiles, fertilizers, steel plant, heavy water plant, 36/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 chemical plants, software industries, maintenance, training and service institutions...”
ii) to vii) ...... ...... ......” 5.0 High Tension Tariff III Tariff Category Rate in paise per KWHr Rate inrupees (nit) – energy Charges per KVA of Maxium Demand HT Tariff 1II 500 300
i) This tariff is applicable to all Commercial Establishments and other categories of consumers not covered under HT tariffs I-A, II-A, II-B, IV and V.
ii) Industries requiring HT supply during construction period shall be charged under this tariff.”
22. A reading of the above, it is clear that the tariff applicable to the appellant company is HT tariff III since the appellant company was not covered under HT tariffs I-A, II-A, II-B, IV and V.
23. It is not in dispute that the appellant was effected with HT SC No.447, with effect from 08.08.2005 for a load of 3000 KVA, but all along, it has been billed under HT Tariff I (Industry) only even the Tariff Order in 37/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 T.P.No.1 of 2002 was in force, which insists that basic service providers and IT Enabled services are to be charged under HT Tariff III for HT service and also instructed to revise the tariff for these services and back period arrears of two years from the date of change of tariff may be collected.
24. While so, during audit inspection, on verification of HT Accounts for the year 04/2007 to 03/2008, the AG Audit raised an audit objection vide Audit Enquiry No.23, dated 20.05.2009 to a tune of Rs.4,50,18,325/-.
It was due to incorrect application of Tariff made in respect of the appellant company. A relevant portion of the Audit Enquiry, is extracted as under:
“On verification of agreements and ether documents, noted, that M/s. Infosys Technologies (P) Ltd, had provided a certificate certified by MEPZ, Chennai. that the said company is engaged in the following activities.
1. Software Development.
2. 2. IT Enabled Services.
Based on the above certificate, only the bills were rendered under HT. TI (Industry).
38/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 In this context it is brought to notice, that Board Vide Circular No:CFC/Rev/Dir/Tf.Coll/F.ITES/D. 77/08, dt 02.02.2008 had issued instructions that all companies engaged in the activity of ITES, should be billed under HT Tariff III (Commercial). No separate means adopted, to ascertain the activity of the company and as such the bills were rendered under HT Tariff I (Industry) based on the certificate issued by MEPZ, Chennai. Hence, in as much as the certificate provides proof of M/s. Infosys Technologies being engaged in both Software Development and ITES, within the same premises, it is appropriate to adopt higher tariff which is the norm. In the case of services engaged in two types of activities, within the same premises. Hence in the above case, instead of HT Tariff I (Industry), HT Tariff III (Commercial) needs to be adopted. Non-adoption of the same has resulted in loss of revenue to the extent of Rs. 4,50, 18, 325/-
In the case of manufacturing Companies, where there was different activity in different blocks, within the same Factory, Administrative Building, Canteen, Recreation Hall each provided with separate connection and billed under appropriate Tariff, however no such segregation was effected on any of the Software 39/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 Technology Companies. It may be noted, that most of the Software Companies, provides for, as a measure of Staff- welfare, facilities such as Food Court, Shopping outlets, Food eateries, Gymnasium, Auditorium, Mini-theatres and such other facilities, within the same premises. All the above facilities needs to be billed under commercial activity, whereas in practice the power consumption for the above activity is also treated as Industrial Consumption and billed under Industrial Tariff, which is in violation of existing norms.
Also, it may be noted, that most of the Software Companies are in multi-storeyed buildings which are air- conditioned centrally. Hence maximum power is utilised towards air-conditioning of the complex, centrally, than towards the core activity of Software Development / ITES. M/a. Infosys Technology (P) Ltd, as of March 2009, was sanctioned with connected load of 5550 KVA. The entire load of 5550 KVA may not be utilised for the core activity of Software Development / ITES. Hence TNEB may contemplate on aggregating consumption between core activity and other activity and application of appropriate tariff.” 40/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024
25. The above said AG Audit was communicated to the appellant vide letter dated 31.03.2011. In this context, the Board Office Audit Branch has also raised an audit objection vide audit slip No.73, dated 28.12.2011 on the same ground that incorrect application of tariff and also extension of supply to facilities from same HT supply utilized for industrial purpose and while reviewing CC bills of the appellant from 04/2009 to 11/2011, they raised a short levy of Rs.6,72,95,384/- and this was also communicated to the appellant vide letter dated 19.07.2012. In this regard, an inspection in the premises of M/s.Infosys Limited, Mahindra World City Chengalpattu was conducted on 04.12.2020 and during complete inspection, each and every building inside the campus was checked and the load details in respect of industrial and commercial establishments, such as food court, shopping outlets, food catering, gymnasium, auditorium, mini theatre, hospital, etc. were taken into consideration. The detailed report of the inspection reads as under:
a) The following infrastructures / facilities inside the Infosys Campus located at Mahindra World City, Chengalpattu were inspected and analysed as per their operation and functional activities so as to ascertain their 41/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 actual applicable tariff as per the tariff orders of the Hon'ble TNERC.
a. Food Court b. Leisure Block (shops & ICICI Bank) c. Health Club (Gymnasium, Indoor Badminton Court and Medical Centre).
b) Infosys Team shared the relevant vendor agreement copies and load details with TANGEDCO officials for all the three above mentioned locations.
c) The Infosys team briefed that, for the four vendors operating in the Leisure block, a nominal monthly fee is collected towards cleaning and material movement expenses. They do not charge for electricity and water expenses from the vendors.
d) At the food courts, the various kitchens and kiosks and noted down the details of the equipment used for food production and service were inspected. Infosys team appraised us that they do not charge for electricity and water expenses from the food court vendors as well.
e) With respect to the Health Club, the facility was Infosys owned and Infosys operated, with no commercial vendor involvement. The First Aid Center housed inside the Gym block is operated in the same fashion. However, the Doctors and Nursing Staff are engaged by the Apollo Hospitals. It is reported that Apollo run the pharmacy store adjacent to the First Aid Center as well. It was ascertained 42/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 that the Electricity and water charges are not charged from them by Infosys.”
26. It is pertinent to note that within the same premises, the appellant provided the above facilities to their employees which are commercial activities and no separate service connections were obtained nor billed under appropriate tariff. Therefore, as per the norms, the respondent adopted higher tariff in case of services engaged in two types of activities within the same premises and hence, it was concluded that the adoption of industrial tariff (HT Tariff-1) to the appellant was improper and accordingly, it was decided to adopt commercial tariff (HT Tariff III).
27. The learned Senior counsel would contend that the appellant was not engaged in ITES activities in the Unit, but only carrying on Software development and not BPO services which are covered under ITES and therefore, the applicability of HT III (Commercial) tariff would not arise and he also relied upon a Certificate issued by the Office of the Development Commissioner dated 06.07.2010 and his further contention that as a welfare measure, the appellant has established the branded food courts, shopping outlets, ATM, bank, food courts and gymnasium to provide 43/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 essential services to their employees and for this purpose, they are not collecting electricity and water charges from the operators of the said outlets and the activity of providing facilities by the appellant company to its employees through outsourcing at subsidized rates without any profit, is a welfare activity and the same cannot be considered as commercial category to attract commercial tariff and in this regard, he relied upon a Tariff Order in T.P.No.1 of 2012, dated 11.08.2017 of the TNERC, wherein, it was clarified that if facilities provided by the industrial unit to employees have been outsourced to a private player, but they cater to employees of only that particular industrial unit, then such activity cannot be considered as commercial category as mere outsourcing does not change the purpose of service being rendered.
28. This Court does not find any substance in the contention raised by the learned Senior counsel. Admittedly, the appellant got permission for setting up a manufacturing unit in Mahindra SEZ from the Department of Commerce (MEPZ), Chennai and the items of manufacture/service are “Software Development & Exports” and “Software Consultancy & BPO” 44/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 and therefore, it is clear that the appellant being engaged in both Software development and Information Technology Enabled Services within the same premises from the year 2005 onwards. As per the Tariff Order in T.P.No.1 of 2003, dated 15.03.2003, the tariff applicable to the appellant company is HT Tariff III from the date of set up of Mahindra SEZ, i.e .09.05.205. But strangely, the respondent has not adopted till March, 2008. Only, after issuance of the Circular, dated 02.02.2008 by the Chief Financial Controller, Tamil Nadu Electricity Board (Accounts Branch) and during the audit inspection,which was said to have been conducted on 20.05.2009, the respondent raised audit objection to the tune of Rs.4,50,18,325.50, from the month of April, 2008 onwards till March, 2009 and later passed impugned orders. This Court does not find any illegality or infirmity in adopting the HT-III (Commercial) tariff in respect of the appellant company. Having obtained the permission for setting up of Mahindra SEZ for both activities, viz., Software Development & Exports and Software Consultancy & BPO and also carrying on commercial activities within the same premises, such as, providing shopping outlets, food courts, gymnasium, auditorium, mini theatre, hospital, etc. to their employees by entering into rental agreements 45/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 with the providers who set up their outlets with their brand names, without adopting segregation or fixing separate service meters to assess the consumption of electricity, it is not fair on the part of the appellant company to take U turn and contend that they are not engaged in ITES activities and providing the commercial activities to their employees only as a welfare measure and thereby, HT-III (Commercial) Tariff cannot be applied to the appellant. As rightly contended by the learned Senior counsel for the respondent that providing comprehensive facilities by the appellant company to their employees as welfare measure, would certainly boost productivity and profitability for the appellant company and lead to greater profits for the company and it is not fair on the part of the appellant company to provide such facilities at the cost of the respondent claiming that they are entitled to be charged under concessional industrial tariff. The learned Judge also observed that all service providers are running their business in their brand names, viz., Murugan Idly Shop, Apollo Pharmacies Limited, ICICI Bank, etc., which are very familiar to the general public and no bank would operate on subsidized rate such as for low interest and no food provider would sell the food without any profit, of course, they are 46/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 charging low rates only because, they were not paying any electricity consumption charges and water charges and in fact, it is the case of the appellant company that they are not collecting electricity and water charges from the above said providers since all along the appellant company is getting benefit by paying HT-IA tariff as the respondent has been wrongly applying the tariff to the appellant company. As per Clause 6.1.1.3 of Tariff Order of 2017, supply used for creating facilities and extending to the employees within the premises of the consumer, shall be considered to be bona fide purpose and the energy consumption to such facilities shall be metered by the licence separately and only the energy charged under appropriate LT tariff, but admittedly, the appellant has not applied for any separate meters nor provided any physical segregation in their premises for want of change of tariff. Therefore, this Court is of the considered view that the appellant company being engaged in both activities, viz., Software Development and IT Enabled Services, is liable to be charged under HT III (Commercial) Tariff and that the respondent has rightly passed the impugned orders.
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29. As regards the contention of the learned Senior counsel for the appellant company that the demand of shortfall made in the impugned order dated 7.11.2010 is barred by limitation in terms of Section 56(2) of the Act is concerned also, this Court does not find any merit at all. Clause 2 of Section 56 states that there can neither be recovery nor electricity supply be cut off 2 years after the amount became due, however, it is subject to the caveat that the said sum must be shown as continuously as recoverable as arrears of charges. Clause (2) of Section 56 reads as under:
56(2) Notwithstanding anything contained in any other law for the time being in force, no sum due from any consumer, under this section shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrears of charges for electricity supplied and the licensee shall not cut off the supply of the electricity” .
30. A reading of the above makes it clear that no sum due from any consumer shall be recoverable after the period of two years from the date on 48/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 which such sum became first due unless it has been shown continuously as recoverable as arrears of charges and the licensee shall not cut off the supply of the electricity. In the present case, pursuant to the audit enquiry in the year 2009, the respondent made demand towards shortfall in the year 2012, which was admittedly not paid by the appellant, but they replied to it and thereby, it has become first due and thereafter, from time to time, it has been shown as recoverable arrears in the records of the respondent, which can be seen as per the proceedings of the Board Office Audit Branch (BOAB) (copies of the same are enclosed in the typed set of papers at page Nos.43, 45, 50, 54 and 69 and admittedly, the appellant has not paid the amount demanded vide impugned orders and thereby the non-payment of every month becomes a continuing cause of action. Further, the licensee (the respondent herein) has not cut off the supply of the electricity to the appellant company. Finally, as on the date when the impugned proceedings dated 07.11.2020 were issued, the outstanding due was Rs.6,76,09,540.12/-. The Hon'ble Supreme Court in “Pretam Cortex versus Uttar Haryana Biji Nigam Litd” (2021) 20 SCC 200, has observed that the limitation provided under Section 56 of the Electricity Act, 2003 is applicable only for the 49/51 https://www.mhc.tn.gov.in/judis ( Uploaded on: 24/09/2025 05:38:01 pm ) W.A.No.1680 of 2024 disconnection and not for the demand of dues by the Board. Therefore, this Court is of the view that the demand of shortfall made in the impugned order dated 7.11.2010 is not barred by limitation in terms of Section 56(2) of the Act. ,
31. In the light of the above discussion, we are not inclined to interfere with the order passed by the learned single Judge and accordingly, the Writ Appeal fails and the same is dismissed. No costs.
(J.N.B.,J.) (M.J.R.,J.)
24.09.2025
Index: Yes / No
Internet: Yes / No
Speaking Order / Non Speaking Order
suk
To
Superintending Engineer,
TANGEDCO,
Chengalpattu
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W.A.No.1680 of 2024
J.NISHA BANU, J.
and
M.JOTHIRAMAN,J.
suk
Judgment
in W.A.No.1680 of 2024
24.09.2025
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