Madras High Court
Syed Tajudeen Madani vs The Tamil Nadu Electricity Board on 9 November, 2011
Author: V. Ramasubramanian
Bench: V. Ramasubramanian
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 09/11/2011 CORAM THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN W.P.(MD)No.12587 of 2010 And M.P.(MD) Nos.1 and 2 of 2010 1.Syed Tajudeen Madani 2.N.Vittobai (The second petitioner represented through her power of attorney agent Mr.Syed Tajudeen Madani, first petitioner herein) .. Petitioners vs. 1.The Tamil Nadu Electricity Board, Represented through its Chairman, Anna Salai, Chennai-2. 2.The Superintending Engineer, Trichy Electricity Distribution Circle/Metro Tamil Nadu Electricity Board, Trichy-20. 3.The Exuecutive Engineer, O&M/Urban, Tamil Nadu Electricity Board, Trichy-17. 4.The Assistant Executive Engineer, O&M/Urban, Tamil Nadu Electricity Board, Trichy-1. .. Respondents Writ Petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorarified Mandamus, calling for the records on the file of the fourth respondent herein in AEE/O&M/CONT/TRY/F Theft Energy/10 D.No.196/10 dated 27.9.2010 and quash the same as illegal, ultravires and unconstitutional and consequently direct the fourth respondent to restore the disconnection effected on 25.9.2010 and for other consequential relief. !For Petitioners ... Mr.H.Lakshmi Shankar for Mr.V.Raghavachari. ^For Respondents ... Mr.S.M.S.Johnny Basha, Standing Counsel for TNEB. :ORDER
The petitioners have come up with the above writ petition, challenging a demand made by the fourth respondent claiming consumption charges and damages for using a domestic electricity service connection for commercial use.
2. I have heard Mr.H.Lakshmi Shankar, learned counsel for the petitioners and Mr.S.M.S.Johnny Basha, learned Standing Counsel for the respondents.
3. The first petitioner is a practising Advocate. He has his residence at No.1, First Cross Street, Anaikatti Maidan, Beema Nagar, Trichy-1. The first petitioner had taken the first floor of the premises bearing Door No.6, First Cross Street, Anaikatti Maidan, Beema Nagar, Trichy-1 from the second petitioner herein, on monthly rental basis to run his Office as an Advocate. The premises owned by the second petitioner, in the first floor portion of which the first petitioner is a tenant, has a domestic electricity service connection. It is the very same connection that is used by the first petitioner for running his Advocate's Office in the first floor.
4. While taking the meter reading in the month of August 2010, the Assessor noticed the use of the first floor of the premises as an Advocate's Office and reported the matter to the fourth respondent.
5. Thereafter the Enforcement Wing of the respondent-Board made a surprise inspection on 25.9.2010, of the premises in question and claimed that the payment of domestic Tariff was unlawful. Immediately a compounding fee of Rs.4,000/- was collected from the second petitioner and the second respondent also agreed to pay the consumption charges.
6. Thereafter, the fourth respondent raised a demand by the impugned communication dated 27.9.2010, raising provisional assessment charges to the tune of Rs.90,490/-. Challenging the said demand, which according to the respondents is only a provisional assessment notice, the petitioners have come up with the above writ petition.
7. Fortunately, the facts are not in dispute. The second petitioner is the owner of the property at No.6, First Cross Street, Anaikatti Maidan, Beema Nagar, Trichy-1. The second petitioner is using the ground floor portion of the said property as her residence. She has let out the first floor portion to the first petitioner for running an Office. Therefore, the only question that arises for consideration is as to the Tariff which is applicable to the first floor portion of the premises. While the contention of the petitioners is that the current consumption charges are payable only as per Tariff I-A, the contention of the respondents is that the Tariff applicable is Tariff-IV, since, the first floor portion of the premises is for commercial purposes.
8. The respondents have filed a counter affidavit contending that the office run by the first petitioner would not come under the category of LT Tariff 1-A. This LT Tariff 1-A is applicable only to buildings used for residential purposes. According to the respondents, as per Tariff orders dated 16.3.2003 and 31.7.2010, Tariff 1-A is applicable only if the consulting rooms of any professionals are attached to the residences of such professionals provided no trading is undertaken. Since the office of the first petitioner is not attached to his own residence, the respondents claim that the use of electricity by the first petitioner for a purpose other than domestic purpose, would also tantamount to theft of energy under Section 135(1)(c).
9. The question as to whether the legal profession is a commercial activity or not was taken up for consideration by the Supreme Court in M.P.Electricity Board vs. Shiv Narayan {2005 (7) SCC 283}. After analysing the purport of the expressions "commerce"and "profession", the Supreme Court held in para 14 of the said decision that "a professional activity must be an activity carried on by an individual by his personal skill and intelligence" and that "there is a fundamental distinction between a professional activity and an activity of commercial character". In para 16 of the judgment, the Court also held as follows:-
"Even if it is accepted that the user was not domestic, it may be non- domestic. But it does not automatically become 'commercial'. The words 'non- domestic' and 'commercial' are not interchangeable. The entry is commercial. It is not a residual entry, unless the user is commercial. The rate applicable to the commercial user cannot be charged merely because it is not considered to be domestic user".
10. But after pointing out the above, the Supreme Court referred the matter to a larger Bench, in view of the fact that an earlier decision of a co- ordinate Bench, in New Delhi Municipal Council vs. Sohan Lal Sachdev {2000 (2) SCC 494}, had taken a different view. Therefore, no reliance can be placed upon the decision in M.P.Electricity Board, as it is not an authoritative pronouncement, but only an expression of opinion and a reference to a larger Bench.
11. In V.Sasidharan vs. M/s.Peter and Karunakar and others {AIR 1984 SC 1700}, which arose under The Kerala Shops and Commercial Establishments Act, the Supreme Court held that a lawyer's office cannot be construed as a commercial establishment. But the said decision was with reference to the definition of the expressions "commercial establishment" and "establishment" appearing in Section 2 (4) and (8) of the Kerala Act.
12. In K.Kanagasabapathy vs. The Chairman, Tamil Nadu Electricity Board {W.P.No.21731 and 26956 of 2003 decided on 23.12.2010}, B.Rajendran, J., was concerned with a case where the Advocate's office was attached to his residence. Therefore, the learned Judge held that the respondents cannot charge commercial tariff. But in the case on hand, the office of the first petitioner is not attached to his own residence, though it is attached to the residence of the second petitioner. Therefore, it is necessary to have a closer scrutiny.
13. Consequent upon the enactment of the Electricity Regulatory Commission Act, 1998, the Government of Tamil Nadu constituted the Tamil Nadu Electricity Regulatory Commission, under G.O.Ms.No.58, Energy Department, dated 17.3.1999. The Commission issued its maiden Tariff Order under Section 29 of the Act, on 15.3.2003. The revised tariffs were ordered to be applicable from 16th March 2003 till the Electricity Board sought a revision. The Board was at liberty to seek a revision once in every financial year. But the Board did not seek revision of tariff till January 2010.
14. In the meantime, the Electricity Regulatory Commission Act, 1998 was repealed by the Electricity Act, 2003. Thereafter, the Commission notified the Tamil Nadu Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff) Regulations 2005, on 3.8.2005 under Section 61 read with Section 181 of the 2003 Act.
15. Subsequently, the Commission issued the Tariff Order No.3 of 2010 on 31.7.2010. It came into effect on 1.8.2010 and was to be valid either till 31.3.2011 or till the Board filed necessary petition for revision.
16. The Low Tension electricity consumers are classified by the Electricity Board for the purpose of fixation of Tariffs, into various categories, as follows:-
I-A - Domestic.
I-B - Huts.
II-A - Street lights and water supply II-B - Recognised Educational Institutions, places of public worship etc. III-A1 - Cottage Industries.
III-A2 - Power Looms.
III-B - Industries.
IV - Agriculture and HT Lift Irrigation.
V - Commercial and others
17. In Chapter-9 of its order dated 31.7.2010, the Tamil Nadu Electricity Regulatory Commission considered the Tariff that could be fixed for various types of consumers. While doing so, the Commission directed under Chapter 9.10.5 that all hospitals run by Charitable Trusts offering completely free treatment, shall be placed on par with Government Hospitals and classified under LT Tariff II-B. Similarly, the Creches and Recreation Centers run by Plantations were classified under LT Tariff II-B(1). The Tariff for Private Colleges was fixed on par with Cinema Theatres. I do not know if this is due to the fact that the former has also become places of entertainment like the latter, these days. In para 9.11.10, the Commission recommended the revision of Tariff for various categories of consumers, including domestic consumers, covered by Tariff I-A. While doing so, the Commission held that Tariff I-A is also applicable to the following categories of services -
(1) Handlooms in residences of handloom weavers (regardless of the fact whether outside labour is employed or not) and to handlooms in sheds erected where energy is availed of only for lighting and fans. (2) Public conveniences maintained and run by the local bodies and by such other organisations.
(3) Community Nutrition Centres and Block Offices of Tamil Nadu Integrated Nutrition Projects.
(4) Anganwadi Centres, Nutritious Meal Centres and School Buildings associated with the Government Welfare Schemes and Electric crematorium by local bodies.
(5) Old Age Homes, Leprosy Centres run by charitable institutions rendering free service.
(6) Consulting Rooms of any professionals attached to the residences of such professionals provided no trading is undertaken or no motive power is used in the Consulting Room.
(7) All consumers under this category, shall have ISI marked motor and motor loads of 3 HP and more shall install adequate power factor improvement capacitors (ISI marked) Non compliance shall invite compensation charges as per TNERC regulations.
18. A perusal of the categorisation of consumers by the Board, as approved by the Tamil Nadu Electricity Regulatory Commission, would show that even industries using Low Tension Power Supply come under Tariff III-B. Cottage Industries and Power Looms come under Tariff III-A1 and III-A2. Even street lights and water supply come under Tariff II-A. Recognised Educational Institutions and places of public worship come under Tariff II-B. Therefore, to say that the Office of an Advocate would come under Tariff-V under the category "commercial and others", merely because it is located in the residence of another person, would make an Advocate's office much worse than an industrial activity under Tariff III-B.
19. If the Board and the Commission desired to keep the level of operations, as the bench mark, for classifying Advocates having consultation rooms in their own residences as a separate category from Advocates having huge offices elsewhere, even then the classification may not strictly satisfy the bench mark. There are prosperous Advocates having huge offices in their own residences. There are also less fortunate Advocates having very small consultation rooms, which cannot accommodate more than a table and a couple of chairs, but located elsewhere. Therefore, the level of operation does not depend upon whether the consultation room is located in their own residences or in the residences of others or elsewhere.
20. In any case, there is no rationale behind limiting the application of Tariff I-A only to those Advocates having consultation rooms in their own residences and not extending the same benefit to those having consultation rooms in the residences of other people. While it may be possible to distinguish a consultation room located in a residential building from a consultation room located in a non-residential one, the distinction sought to be made on the basis of ownership, cannot be accepted.
21. But the action of the respondents in treating the Advocate's office located in places other than his own residence, as not coming under Tariff I-A, but coming under Tariff V, is in terms of an order passed by the Tamil Nadu Electricity Regulatory Commission, by virtue of Section 86 (1) the Electricity Act, 2003. All orders passed by the Commission are appealable to the Appellate Tribunal for Electricity under Section 111. The order passed by the Appellate Tribunal is appealable to the Supreme Court under Section 125. Moreover, the Tariff Order 3 of the TNERC dated 31.7.2010 is not under challenge before me in this writ petition. Therefore, it may not be proper for me to indirectly nullify the effect of Tariff Order 3 of the TNERC, by setting aside the demand made by the respondents. Hence, I am of the view that the appropriate course of action would be to direct the first respondent to seek appropriate clarifications from the TNERC, under Section 86 (1) of the Electricity Act, 2003.
22. In the meantime, it is stated that the second petitioner has already applied for demolition. The total amount of demand made under the impugned communication was Rs.90,490/-. Out of the said amount, the petitioners have already paid a sum of Rs.15,000/-. But in view of the dispute, the respondents have not agreed to effect disconnection for the purpose of demolition and reconstruction. Therefore, the appropriate course of action would be (i) to direct the first respondent to seek clarifications from TNERC and (ii) to direct the respondents to keep in abeyance, the demand for payment of the balance amount of Rs.75,490/-, upon the petitioners executing a bond undertaking to make payment, if the decision of the TNERC is adverse.
23. Accordingly, the writ petition is disposed of with the following directions:-
(i) Within 4 weeks of receipt of a copy of this order, the first respondent shall apply to the Tamil Nadu Electricity Regulatory Commission under Section 86(1) of the Act, for a clarification as to whether a classification between Advocates having consultation rooms in their own residences and Advocates having consultation rooms in other places would be a reasonable classification and as to whether it would be fair to place the former category of Advocates under Tariff I-A and the latter category of Advocates under Tariff V.
(ii) Since the second petitioner seeks to demolish the premises and necessary orders for disconnection are not issued on account of the pendency of the demand, the respondents are directed to pass necessary orders to enable the petitioners to demolish the building, upon the petitioners executing personal bonds for payment of the balance amount of demand viz., Rs.75,490/-, in the event of the clarifications issued by the Regulatory Commission going against the claim of the petitioners.
The writ petition is disposed of accordingly. There will be no order as to costs. Consequently connected miscellaneous petition is closed.
Svn To
1.The Chairman, Tamil Nadu Electricity Board, Anna Salai, Chennai-2.
2.The Superintending Engineer, Trichy Electricity Distribution Circle/Metro Tamil Nadu Electricity Board, Trichy-20.
3.The Exuecutive Engineer, O&M/Urban, Tamil Nadu Electricity Board, Trichy-17.
4.The Assistant Executive Engineer, O&M/Urban, Tamil Nadu Electricity Board, Trichy-1.