THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition No.27246 of 2005 (Dated : 29-04-2010) Between: M/s.Metro Gas Appliances Pvt. Ltd., Rep. by its Director, Fasijung lane, J.N.Road, Hyderabad …Petitioner A n d Chairman & Managing Director and 2 others ..Respondents THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition No.27246 of 2005 ORDER: This Writ Petition has been filed by M/s.Metro Gas Appliances Private Limited represented by its Director Aravind Kumar Kedia assailing the action of the Superintending Engineer (Operation Circle), Hyderabad (North), Andhra Pradesh Central Power Distribution Company Limited (“APCPDCL”)-3rd respondent in demanding Rs.7,05,230/- under Letter No.S.E/OP/N/Hyd/SA.D/ JAO/H.T.IV/D No.679/05, dated 6.8.2005 and non consideration of his representation dated 30.9.2005 by the Chairman & Managing Director, APCPDCL-1st respondent herein. 2. The petitioner applied for power supply on 2.7.1993 to the erstwhile APSEB under L.T category. After collecting necessary deposits, the power supply was given to the petitioner. Subsequently, the petitioner requested the CPDCL to enhance the power supply to 125 KVA from 74 H.P. The same was sanctioned after collecting deposit of Rs.76,500/- as development charges and Rs. 62,500/- as consumption deposit. The petitioner also signed an agreement dated 17.6.2004. The petitioner started incurring losses and therefore, requested the Chief General Manger, Commercial-2nd respondent for reducing the power supply to 74 H.P i.e., to the original supply under letter dated 19.01.2005. The petitioner also submitted necessary information on 17.2.2005 to the 2nd respondent for considering his request. However, the petitioner could not pay the current consumption charges from January 2005 onwards. The 3rd respondent addressed a letter dated 5.7.2005 to the petitioner demanding Rs.1,90,419/- as consumption dues. Subsequently, under letter dated 6.8.2005, the 3rd respondent terminated the agreement dated 17.6.2004 invoking clause 26.10 of the terms and conditions of supply. The service connection to the petitioner factory has been disconnected on 21.3.2005 for non payment of CC charges. The H.T agreement entered by the petitioner with C.P.D.C.L has also been terminated with effect from 22.7.2005. The respondents without acting on the application submitted by the petitioner for conversion of supply from 125 KVA to 74 H.P demanded the petitioner to pay Rs.4,66,866.67 as monthly minimum charges from 22.6.2005 to 7.7.2006. According to the petitioner, the respondents are not justified in demanding minimum charges after termination of the H.T agreement with effect from 22.7.2005. 3. For better understanding of the grievance of the petitioner, I deem it appropriate to refer paragraphs 6 and 7 of the affidavit filed in support of the petition, which read as hereunder:- “6. I submit that the action of the Superintendent Engineer the 3rd respondent is not legal and sustainable. I submit that condition No.26.10 has no application to my case as the non payment of the minimum demand charges is not willful but only due to the fact that my application for conversion of my service connection to L.T was pending. Without converting my power supply to L.T and having kept the same pending for over 7 months the S.E is not justified in demanding minimum charges as applicable to H.T category. The demand of Rs.4,66,866.67 as monthly minimum charges from 22-6-2005 to 7-7-2006 is wholly illegal and unsustainable. The Superintendent Engineer has not stated as to under what provision of law or term of the agreement he has levied the same. I submit that it is pertinent to note that the original agreement for L.T.Service is not yet cancelled. The change of supply from L.T.category supply of power to H.T category cannot be termed as new service connection. It is only enhanced supply of power at my cost of the equipment. The corporation has not incurred a single paise for the equipment for the enhanced power supply. On the other hand it has collected Rs.76,500/- as developmental charges and Rs.62,500/- as consumption deposit. In fact, it is the petitioner who suffered heavy loss. I submit that my original equipment erected for 74 H.P power supply valued at Rs.76,050/- by the corporation was taken away, but not paid to me or adjusted against the demands. I have to sell away the equipment provided at a cost of Rs.2,29,500/- for availing enhanced power supply scrap value. 7. I submit that as my original L.T agreement is not cancelled, corporation has not paid or adjusted the additional consumption deposit of Rs.69,857/- paid by me during the period when the petitioner availed power under L.T category. Therefore, the contention of the Superintendent Engineer that since two years period is not expired the petitioner has not pay the minimum charges applicable to H.T service is illegal and unsustainable.” 4. Rule nisi came to be issued on 22.12.2005. The respondents entered appearance and filed counter. V.Pandu Ranga Murthy, Superintending Engineer (Operation Circle) has sworn to the counter affidavit filed on behalf of the respondents. 5. The counter affidavit, in brief, is: As per the consumer request, sanction was accorded for release of HT supply to Metro gas Appliances (P) Ltd for a CMD of 125 KVA with connected load of 250 HP at 11 KV point in place of 1 No. LT Industrial Service of S.C.No.S-10684 subject to the conditions specified in Lr.No.SE/OP/North/Hyd/CL/FD/ No.66/04 dt. 26.04.04. The consumer executed H.T agreement dated 8.7.2004 duly accepting all clauses of HT agreement and terms and conditions of supply of power. As per 26.8 of terms and conditions of supply of power, consumer is at liberty to seek reduction or termination of HT agreement by giving three months notice after the period of two years from the date of commencement of HT agreement. Hence the petitioner cannot be permitted to reduce the load within two years of the agreement. Since the petitioner applied for conversion from H.T to L.T within the minimum period of two years, his request was not considered. The power supply came to be disconnected because of petitioner failing to pay current consumption dues. Even after four months including one month notice period, the petitioner failed to get power supply restored by paying balance dues. Hence, the H.T agreement was terminated, as per clause 26.10 of the terms and conditions of power supply, with effect from 22.7.2005 without prejudice to the rights and obligations accrued prior to such termination. Minimum charges have been calculated as per Clause 26.8 and 33 of the terms and conditions of supply. Despite the termination of H.T agreement, the petitioner has to pay minimum charges for two years as per terms and conditions of supply of power. Under Condition No.33.2 of the terms and conditions of power supply, the consumer is liable to pay Minimum charges even if electricity is not consumed because of disconnection of power supply by APCPDCL for non-payment of electricity charges, pilferage other malpractices or for any other valid reasons. 6. Heard Sri M.P.Chandramouli, learned counsel appearing for the petitioner and Sri O.Manohar Reddy, learned Standing Counsel appearing for the respondents. 7. Learned counsel appearing for the petitioner submits that the petitioner having suffered set backs in the business, submitted representation to the Chief General Manager (Commercial) on 19.01.2005 for reducing power supply to 74 HP i.e., to the original supply and the authorities instead of acting on the said letter proceeded to disconnect power supply and terminated the H.T agreement and made a demand of Rs.4,66,866.67 as monthly minimum charges from 22.6.2005 to 7.7.2006 and such demand after termination of H.T agreement is arbitrary and illegal and therefore, it is unsustainable. In a way, his contention is when once H.T agreement is terminated with effect from 22.7.2005, there is no obligation on the part of the petitioner to pay minimum consumption charges subsequent to 22.7.2005. He would also contend that the petitioner submitted representation dated 30.9.2005 to the 1st respondent and without considering the said representation, making a demand of Rs. 7,05,230/- is arbitrary and illegal. 8. Learned Standing Counsel appearing for the respondents submits that as per the H.T agreement, the petitioner has to pay minimum charges for two years and within two years period, the petitioner cannot make a request for conversion of supply from 125 KVA to 74 HP, and therefore, the application filed by the petitioner seeking conversion of supply from 125 KVA to 74 HP is contrary to the terms of the agreement and the same has been rightly not considered by the respondents. He would also contend that termination of H.T agreement by the authorities on 22.7.2005 is without prejudice to their rights to collect minimum current consumption charges for two years, as stipulated therein. Learned counsel placed reliance on the following clauses of the H.T. Agreement. 9. Clause 26.8, 26.10 and 33 of the Agreement read as hereunder:- “26.8 Termination of Agreement in respect of H.T supply:- The consumer is at liberty to seek reduction or termination of the agreement by giving three months notice in writing expressing his intention to do so at any time after the period of two years from the date of commencement of agreement. The Board can terminate the agreement, at any time, giving one week’s notice if the consumer violates the terms of the agreement, or the terms and conditions of supply prescribed by the A.P.S.E.B Board from time to time or the provision of any law touching the agreement including the Electricity (Supply) Act, 1948, the Indian Electricity Act, 1910 and rules made thereunder”. 26.10 Termination of agreement for LT and HT Consumers where supply of electricity remains disconnected. Where any consumer, whose supply is disconnected for non-payment of any amount due to the Board on any account, fails to pay such dues and regularize his account within three months from the date of disconnection, the Board may if it thinks fit, after completion of 3 months period, issue one month notice for termination of the agreement. If the consumer still fails to regularize the account, the Board shall terminate the agreement with effect from the date of expiry of the said one month notice. Such termination shall be without prejudice to the rights and obligations incurred or accrued prior to such termination. 33. Liability for payment of minimum charges:- 33.1 Minimum charges are required to be paid by the consumers to cover fixed charged incurred by the Board for affording supply such as depreciation, General reserve, interest and salaries and wages and other fixed expenses, etc. The minimum charges now prescribed do not fully cover the above fixed charges. 33.2 Minimum charges shall be payable by the consumer as specified in the tariffs for different categories of consumers. This obligation shall be absolute. The minimum charges will be payable by consumer even if no electricity actually consumed for any reason whatsoever and also if the charges for electricity consumed are less than the minimum charges. The minimum charges will be payable even if electricity is not consumed because supply has been disconnected by the Board because of non payment of electricity charges, pilferage, other malpractices or for any other valid reason.” 10. A reading of the above referred clauses in the conditions of supply of power indicates that the consumer cannot terminate the agreement within two years of the date of H.T agreement. Only after two years, the consumer can make a request either for termination or for conversion from HT to LT. The two years is the minimum period. Within these two years period, the petitioner has no option either to seek for termination or for conversion from H.T to L.T. He is bound to pay the minimum current consumer charges under H.T category for the two years period. Even after the H.T agreement is terminated, the right accrued to the department prior to the termination are saved. This is evident from clause 26.10. Therefore, the contention of the counsel appearing for the petitioner that after termination of the H.T agreement, the respondents cannot claim minimum consumption charges has no substance. Under the conditions of supply, the petitioner is bound to pay the minimum charges for a period of two years, despite disconnection of supply for nonpayment of current consumption charges or for any other reason. Therefore, the action of the respondents in demanding minimum consumption charges for two years period cannot be said to be arbitrary or illegal. 11. Hence, this Writ Petition fails and accordingly, the same is hereby dismissed. _____________________ B.SESHASAYANA REDDY, J Dt.29-04-2010 RAR THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition No.27246 of 2005 DATED : 29-04-2010