Madras High Court
R.R.D Tex vs Tamil Nadu Electricity Regulatory ... on 2 August, 2022
Author: R.Subramanian
Bench: R.Subramanian
W.P.Nos.18268 & 18269 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 02.08.2022
CORAM:
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
W.P.Nos.18268 and 18269 of 2017
and
W.M.P.Nos.19840 to 19842 of 2017
R.R.D Tex,
HT SC No.271
S.F.No.617, Suriyanallur Village, Dharapuram,
Tirupur represented by its Manager
P.Muthu Krishnan
.. Petitioner in both the W.Ps
Vs.
1.Tamil Nadu Electricity Regulatory Commission
Rep. by its Secretary,
19-A, Rukmini Lakshmipathy Salai,
(Marshall's Road)
Egmore, Chennai – 600 008.
2.The Tamil Nadu Generation and Distribution
Corporation Ltd., (TANGEDCO)
144, Anna Salai, Chennai – 600002
Represented by its Chairman
3.Director Finance,
Tamil Nadu Generation and Distribution
Corporation Limited,
144, Anna Sali, Chennai – 600 002.
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W.P.Nos.18268 & 18269 of 2017
4.The Superintending Engineer,
Udumalpet Electricity Distribution Circle,
TANGEDCO, Udumalpet.
..Respondents in W.P.No.18268/17
1.The Tamil Naud Generation and Distribution
Corporation Ltd., (TANGEDCO)
144, Anna Salai, Chennai – 600 002
Represented by its Chairman
2.The Superintending Engineer,
Udumalpet Electricity Distribution Circle,
TANGEDCO, Udumalpet.
..Respondents in W.P.No.18269/17
Prayer in W.P.No.18268 of 2017: Writ Petition filed under Article 226 of the
Constitution of India seeking issuance of Writ of Certiorari, calling for the
records of the 3rd respondent's impugned circular Memo CFC/R/FC/R/DFC-
R1/F.HTLT-RTI/D.30/2015, dated 03.02.2016 insofar as the para 3(iii) is
concern and the consequential impugned demand notice bearing
Lr.No.SE/UEDC/UDT/AO/Rev/HT/AS/F.AGAudit2013-15/15 dated
25.11.2015 issued by the 4th respondent, quash the same as illegal, arbitrary
and without authority of law and against the principals of natural justice and
contrary to the Electricity Act, 2003.
Prayer in W.P.No.18269 of 2017: Writ Petition filed under Article 226 of the
Constitution of India seeking issuance of Writ of Mandamus, directing the 2nd
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W.P.Nos.18268 & 18269 of 2017
respondent to adjust/ give refund of the balance security deposit of
Rs.1,24,88,454/- payable to the petitioner as per Regulation 5(5)(v) of the
Tamil Nadu Supply Code, 2004.
For Petitioner : Mr.S.P.Parthasarathy in both the W.Ps
For Respondents : Mr.M.Abul Kalam, Standing Counsel
in both the W.Ps
COMMON ORDER
In W.P.No.18268 of 2017, the challenge is to the action of the 4th respondent in demanding a sum of of Rs.1,24,88,454/- as due and payable by the petitioner based on the audit objections made by the AG Audit Team.
2. The basis on which the Audit Team treats this Rs.1,24,88,454/- as short levy has not been disclosed. The demand is made on the petitioner and the amount due as per the demand is sought to be adjusted towards the additional security deposit that is to be re-funded to the petitioner on an yearly re-determination of the security deposit. On receipt of the demand, the petitioner sent a reply on 24.02.2016 relying upon certain orders of TNERC and contending that the demand itself is unjust.
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3. In the mean time, during the annual re-determination of the security deposit, it is found that the petitioner is liable to maintain a security deposit of Rs.53,93,450/-. It was further found that the security deposit available to the credit was Rs.2,33,91,022/- leaving an excess of Rs.1,79,77,572/-. The 4th respondent conveniently adjusted the excess security deposit with the amount demanded as per the audit objection and adjusted the remaining amount of Rs.55,09,118/- towards current consumption bill for the month of May 2017.
4. Mr.S.P.Parthasarathy, learned counsel appearing for the petitioner would contend that as far as the amount claimed based on the audit objection are concerned the respondent is obliged to adopt the procedure prescribed in the circular dated 03.02.2016, which provides for a show cause notice, a personal hearing and an reasoned order being passed determining the amount payable. This circular has been issued based on the order of the Tamil Nadu State Information Commission. According to Mr.S.P.Parthasarathy, the procedure prescribed under the circular dated 4/11 https://www.mhc.tn.gov.in/judis W.P.Nos.18268 & 18269 of 2017 03.02.2016 has not been followed, no opportunity has been given to the petitioner before slapping the demand dated 25.11.2015. Therefore, the very demand dated 25.11.2015 is liable to be set aside. As a consequence the adjustment to the security deposit towards the amount demanded should also go.
5. Contending contra Mr.M.Abul Kalam, learned counsel appearing for the respondents 2 to 4 would contend that the objections of the petitioner were heard and the amount due on the basis of the objections of the audit was reduced to Rs.80,74,279/- from Rs.1,24,88,454/- leaving a sum of Rs.44,14,180/- in the hands of the TANGEDCO to be adjusted towards the future power bills. Though such a counter has been signed in July 2017 and presented in March 2021, the said sum of Rs.44,14,180/- has neither been adjusted nor re-funded to the petitioner till date. The petitioner was also directed to pay the future current consumption bills while granting interim stay of the impugned proceedings.
6. Mr.M.Abul Kalam, learned counsel appearing for the 5/11 https://www.mhc.tn.gov.in/judis W.P.Nos.18268 & 18269 of 2017 respondents would further contend that once the audit objection has been discussed with the representative of the petitioner and the final audit amount has been arrived at no further opportunity is required to be given to the petitioner as required by the circular dated 03.02.2016. He would also submit that the remaining security deposit payable would be adjusted in future current consumption bills.
7. I am unable to accept the submissions of the learned counsel for the respondents for the following reasons:
The demand made on the basis of the audit objection is separate and independent from the liability of the consumer to maintain a particular amount as security deposit.
8. The Supply Code deals with security deposit and it imposes obligation on the part of the licensee to re-work the security deposit based on the current consumption charges and if there is any excess, the same has to be adjusted in two consecutive current consumption bills and any excess available after such adjustment, the same will have to be re-paid to the 6/11 https://www.mhc.tn.gov.in/judis W.P.Nos.18268 & 18269 of 2017 consumer by way of a cheque before the due date of the third consumption bill. These provisions are mandatory. The respondents will have to follow the Supply Code scrupulously in matters of re-fund of security deposit. In order to avoid re-fund of security deposit, the respondents cannot seek to adjust the same with the audit dues, that too without determining the audit due after following the procedure as prescribed in the Circular dated 03.02.2016.
9. Admittedly no notice was given to the petitioner prior to the demand dated 25.11.2015. After having made a demand on the petitioner and after having adjusted the amount payable to the petitioner with the amount demanded, an opportunity to the petitioner is only superficial and the same cannot be considered as an opportunity given to the petitioner in compliance with the requirement of the circular dated 03.02.2016. Hence, the contention of the Department that the petitioner was given an opportunity after the demand was slapped on him cannot be accepted as compliance with the requirements of the circular dated 03.02.2016.
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10. From the records it is clear that no opportunity was given to the petitioner before the demand was made on 25.11.2015 based on the audit objection. The averments in the counter that the audit party has accepted some of the objections of the petitioner and reduced the amount to be recovered to Rs.80,74,279/- would lend credence to the contention of the petitioner that the entire audit objection suffers from several deficiencies.
11. I am therefore of the opinion that the order impugned in the writ petition will have to be set aside and it is accordingly set aside leaving it open to the respondents to re-determine the amount payable by the petitioner as per the audit objection after giving opportunity to the petitioner and after hearing the petitioner. Therefore, the writ petition in W.P.No.18268 of 217 is allowed.
12. As regards W.P.No.18269 of 2017 an obligation is imposed on the licensee to adjust the excess security deposit and Rule 5(5)(v) of the Supply Code provides procedure for adjustment. As already pointed out the 8/11 https://www.mhc.tn.gov.in/judis W.P.Nos.18268 & 18269 of 2017 respondent has adjusted a sum of Rs. 55,09,118/- in the current consumption charges for the month of May 2017. The remaining amount of Rs.1,24,68,454/- is yet to be adjusted. Therefore, there is a clear non- compliance of the procedure under Rule 5(5)(v) of the Supply Code and therefore this writ petition has to be allowed and the same is allowed. There will be a mandamus directing the respondents to adjust the said sum of Rs.1,24,68,454/- in the two future current consumption bills and the balance if any should be paid to the petitioner by way of a cheque before the due date for the third current consumption bill. No costs. Consequently, the connected writ miscellaneous petitions are closed.
02.08.2022
dsa
Index :No
Internet :Yes
Speaking order
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W.P.Nos.18268 & 18269 of 2017
To:-
1.The Chairman and Managing Director,
Tamil Nadu Generation and Distribution
Corporation Limited (TANGEDCO)
144, Anna Salai, Chennai – 600 002.
2.The Superintending Engineer,
Gobi Electricity Distribution Circle,
Tamil Nadu Generation and Distribution
Corporation Limited (TANGEDCO),
Gobichettipalayam.
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W.P.Nos.18268 & 18269 of 2017
R.SUBRAMANIAN, J.
dsa
W.P.Nos.18268 and 18269 of 2017
and
W.M.P.Nos.19840 to 19842 of 2017
02.08.2022
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