IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE SECOND DAY OF MAY TWO THOUSAND AND EIGHT PRESENT HON'BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION NO : 14980 of 2007 Between: Hindustan Petroleum Corporation Ltd., rep by its Chief Installation Manager, Mr. Moola Parameshwar S/o Late sri M. Bhoomiah Secunderabad Terminal, P.B. No.5, Ghatkesar, Ranga Reddy District-501 301. ..... PETITIONER AND 1 Andhra Pradesh Electricity Regulatory Commission rep by Secretary, Singareni Bhavan, Red Hills, Lakdikapool Hyderaabd-500 004. 2 The Central Power Distribution Company of Andhra Pradesh Limited, rep by Chairman and managing Director, Hyderabad. 3 The Superintending Engineer, APCPDCL., (Operation), Ranga Reddy Circle, (North), Gunrock, Secunderabad-15. 4 The Forum for Redressal of Consumer Grievances of Central Power Distribution Company of A.P. Limited, rep by Chair Person, Singareni Colleries Bhavan, Lakdikapool, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ or order or Direction more particularly one in the nature of Writ of Mandamus declaring (i) the Regulation No. 5(2) of the Andhra Pradesh Electricity Regulatory Commission Establishment of Forum and Vidhyuth Ombudsman for Redressal of Grievances of Consumers Regulations, 2004, in so far as it confines the quorum of the said Forum (4th respondent) to tow members out of four members. (ii) the 2nd part of Regulation 5(5) of the Said Regulations in so far as it validates the proceedings of the said Forum (the 4th Respondent) even if there is a defect in its constitution, and (iii) the Constitution of the Forum for Redressal of Consumer Grievances of Central Power Distribution Company of A.P. Limited. as contrary to section 42(5) of the Electricity Act, 2003(the Act No. 36 of 2003) to the other regulations framed there of and the very object of providing for such Forum for Redressal of Consumer Grievances of Central Power Distribution Company of A.P. Limited and also contrary and (iv) the action of the Superintendent Engineer, the 3rd respondent herein in re categorising the petitioner Unit from H.T.Category-I" to HT Category-II Non Industrial" as violative of Principles of natural justice, illegal and arbitrary and pass such other orders as this Hon'ble Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner :MR.M.RAVINDRANATH REDDY Counsel for the Respondents : MR.O.MANOHER REDDY The Court made the following : HON'BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION NO : 14980 of 2007 ORDER : The petitioner-Hindustan Petroleum Corporation Limited has filed this writ petition seeking a writ of mandamus to declare – (i) the Regulation No.5(2) of the Andhra Pradesh Electricity Regulatory Commission Establishment of Forum and Vidhyuth Ombudsman for Redressal of Grievances of Consumers Regulations, 2004, in so far as it confines the quorum of the said Forum (4th respondent) to two members out of four members, (ii) the 2nd part of Regulation 5(5) of the said Regulations in so far as it validates the proceedings of the said Forum (the 4th respondent) even if there is a defect in its constitution, (iii) the constitution of the Forum for Redressal of Consumer Grievances of Central Power Distribution Company of A.P. Limited, as contrary to Section 42(5) of the Electricity Act, 2003 (the Act No.36 of 2003), to the other regulations framed thereof and the very object of providing for such Forum for Redressal of Consumer Grievances of Central Power Distribution Company of A.P. Limited, and (iv) the action of the Superintendent Engineer, the 3rd respondent herein in re-categorising the petitioner Unit from “H.T.Category-I” to H.T.Category-II (Non Industrial), as illegal, arbitrary and violative of principles of natural justice. But, however, after filing of the counter by the respondents, the learned counsel for petitioner has filed a Memo dated 11.10.2007 confining the relief only to the extent of declaration on the part of the Superintendent Engineer i.e. respondent no.3 herein in re-categorising the petitioner Unit from HT-I category (industrial) to HT-II category (non-industrial), as illegal and against the principles of natural justice. The petitioner is engaged in refining and marketing of petroleum and petroleum products in India. In the year 2002, it established a terminal at Ghatkesar in Nalgonda District for storage and distribution of petroleum products in Andhra Pradesh. For this purpose, it obtained electric power supply connection from Central Power Distribution Company by entering into an agreement as per the terms and conditions of supply framed under the Electricity (Supply) Act, 1948 (hereinafter referred to as ‘the 1948 Act’). From 2002 onwards, the petitioner Unit was being charged power charges as applicable to HT-I category. But however, in the month of January 2004, the 3rd respondent has revised the category of the petitioner’s power connection from HT-I to HT-II, and accordingly raised the bills. About two years thereafter, a letter dated 7th August 2006 was issued by the respondents, calling upon the petitioner to pay the bills at enhanced rate as applicable to HT-II category, for the period from February 2002 to January 2004. Initially, the petitioner, being aggrieved by the change of category, filed a complaint before 4th respondent-Forum for Redressal of Consumer Grievances of Central Power Distribution Company of A.P. Limited (hereinafter referred to as ‘the Forum’), and the same was numbered as C.G.No.39/2006- 07. When the said complaint was dismissed, the petitioner has approached this Court by filing a writ petition being W.P.No.26254 of 2006, in which, the order passed by the 4th respondent-Forum was questioned. A Division Bench of this Court, in the judgment in W.P.No.26254 of 2006 dated 4th January 2007, recorded a finding that the comments offered by the respondent-authorities were not furnished to the petitioner- consumer, as such, he could not effectively put-forth his submissions in support of the complaint, and also on the ground that the Forum has decided the matter without recording valid reasons, quashed the order of the Forum and remitted the matter for fresh consideration. But, however, before its disposal and before consideration of petitioner’s complaint, consequent to the directions issued by this Court, the petitioner has sought for information with regard to constitution of the Forum and the qualifications of its members by filing an application under the Right to Information Act. It is the case of the petitioner that the very constitution of the 4th respondent Forum is contrary to Section 42(v) of the Electricity Act, 2003. After obtaining the said information with regard to constitution of the Forum and the qualifications of its members, the petitioner has filed this writ petition questioning the very constitution and also the consequential declaration declaring the action of respondent- authorities in changing the category of petitioner’s power supply from HT-I to HT-II as arbitrary and illegal. During the pendency of the writ petition, the petitioner withdrew the complaint itself in view of the fact that the very constitution of the Forum is questioned, but however, when the matter is taken up, on the ground that respondents have not denied the allegation of petitioner that he was not given an opportunity before change of category, he has confined the relief only with regard to declaration on the change of category. He has also filed a Memo to that effect. In the affidavit filed in support of the petition, it is categorically stated that having regard to the nature of the petitioner-establishment and the activities being undertaken by it, it was rightly charged under HT-I category, when initially electricity supply was started in the year 2002. To that effect, parties have also entered into an agreement for supply of electricity as per the terms and conditions of supply framed by the erstwhile Electricity Board, which are binding on the successive Companies. It is also categorically stated that with regard to similar Company i.e. M/s. Indian Oil Corporation Limited, when a doubt has arisen with regard to category for charging the bills, the Company was inspected by the Divisional Engineer/ DPE/Hyderabad and ultimately he sought declaration from the erstwhile Electricity Board and the Board has examined the whole issue and agreed that having regard to the activities undertaken by the said Corporation, it falls under HT-I category as per the tariff notification. The impugned action of the respondents is questioned mainly on the ground that having categorized the petitioner under HT-I in the year 2002, the respondent-authorities cannot unilaterally change the category of supply without giving an opportunity to the petitioner. It is submitted that such action of the respondents is illegal and in violation of the principles of natural justice. Counter affidavit is filed by the Chief General Manager, Projects (incharge Chief General Manager, HRD), A.P. Central Power Distribution Company Limited. In the counter affidavit, while agreeing that in the year 2002, the power connection given to the petitioner was categorized under HT-I, it is stated that such categorization was done by mistake. It is averred that having regard to the nature of business being undertaken by the petitioner-Corporation, it does not fall within HT-I category. It is stated that in order to fall under HT-I category, consumer has to satisfy that it carries on the activities of ‘manufacturing’, ‘processing’ and ‘preserving goods for sale’. It is stated that after noting the mistake, the said category conversion was done on 05.02.2004. It is stated that consequently, after change of category, the consumption charges are being levied at the rates applicable to HT-II category and the petitioner is paying the same. It is stated that asmuch as the earlier categorization was by mistake, the petitioner is liable to pay the differential amount of consumption charges with effect from February 2002. The respondents have relied on condition No.35 of the Terms and Conditions of Supply framed under the 1948 Act, to support the conversion of category. Further it is stated that as new terms and conditions came into effect from 6th January 2006, condition No.3.4.1 of General Terms and Conditions of Supply will not apply to the case of the petitioner. Heard Sri M.Ravindranadh Reddy, learned counsel for petitioner, and Sri O.Manoher Reddy for the respondents. In view of the proposed order in this writ petition, it is not necessary to go into the details with regard to the nature of business of the petitioner Unit, etc. The petitioner has obtained electricity service connection in the year 2002 and it is also not in dispute that the power connection was categorized as HT-I as per the terms and conditions of supply framed under the Act. Prior to new terms and conditions of supply were framed, there were terms and conditions of supply as framed in B.P.Ms.No.690, dated 17.09.1975 framed in exercise of powers conferred by Section 49 of the 1948 Act. After the Electricity Act, 2003 came into force, the said terms and conditions of supply are substituted by new terms and conditions of supply. Though the agreement entered into and the connection extended to the petitioner was in the year 2002, which was governed by terms and conditions of supply framed under B.P.Ms.No.690, dated 17.09.1975, but however, this conversion was done in the year 2004. The said conversion was done from HT-I category to HT-II category by the respondents, on their own, in the year 2004, by a mere communication to the petitioner through letter dated 7th August 2006. On receipt of the said letter, though the petitioner had been making representations, but however, respondents have issued letter dated 10th November 2006, demanding differential bills from the petitioner for the period from February 2002 to January 2004. Under condition No.35 of the earlier terms and conditions of supply, the respondent/authorities are empowered to re-classify the category of supply and also to suitably revise the bills if necessary, retrospectively. But, however, it is to be seen that having examined the nature of activities carried on by the petitioner-corporation at the time when initial power supply was extended by entering into an agreement, and by collecting the bills for a period of about two years under HT-I category, if the classification is to be changed, unless the consumer is notified on the proposed re-classification, respondent authorities cannot re-classify the same unilaterally. Though there is no express provision for giving such an opportunity, but to meet the principles of natural justice, such an opportunity shall be read into condition No.35 of the terms and conditions of supply. It is also pertinent to note that as per the revised terms and conditions of supply, particularly under 3.4.1 of the general terms and conditions of supply, it is expressly provided for issuance of a notice, before changing the category of supply, and unless such a notice is issued, category of supply cannot be changed. Though such an express provision is not there in the earlier terms and conditions of supply under condition no.35, but to meet the principles of natural justice, more particularly to revise the bills retrospectively, it is obligatory on the part of the respondents to issue notice to the petitioner, before re-classifying the petitioner’s power connection from HT-I to HT-II category. In normal course, as the petitioner has already filed a complaint before the 4th respondent-Forum, he is not entitled to pursue this writ petition. But however, in view of the fact that the respondents have not disputed the contention of petitioner that no opportunity was given to him before change of category, the petitioner withdrew the complaint and filed a Memo to that effect. In view of the withdrawal of the complaint filed before the 4th respondent-Forum, and asmuch as the petitioner did not press for grant of other relieves in the writ petition, it is a fit case to declare such re- classification as illegal and arbitrary. The learned counsel for petitioner has placed reliance on a judgment in the case of AET Laboratories Limited v. Central Power Distribution Company of Andhra Pradesh Limited[1], in which, this Court disproved revision of bills without notifying to the consumer about change of category. Though it is submitted by learned counsel for respondents Sri O.Manoher Reddy that the petitioner has paid the bills at the revised tariff too, but however, since the respondent is a Government owned Company which is mainly involved in the business of distribution of power supply, by resorting to an action in gross violence of principles of natural justice, it cannot defend its action merely on the ground that petitioner/consumer has paid the bills as per the rates applicable to the revised category. For the aforesaid reasons, the writ petition is allowed. The change of classification of power connection of the petitioner from HT-I category to HT-II category and consequential levy of differential bill charges, is declared as illegal. However, it is open for the respondents to issue notice to the petitioner for change of category in accordance with the existing terms and conditions of supply. If any consumption charges are collected from the petitioner either on account of arrears or regular monthly consumption charges based on the revised category, the same shall be refunded to the petitioner or re-adjusted against the consumption bills. There shall be no order as to costs. ______________________ R. SUBHASH REDDY, J 2nd May 2008 ajr To 1 The Secretary, Andhra Pradesh Electricity Regulatory Commission, Singareni Bhavan, Red Hills, Lakdikapool Hyderaabd-500 004. 2 The Chairman and Managing Director, The Central Power Distribution Company of Andhra Pradesh Limited, Hyderabad. 3 The Superintending Engineer, APCPDCL., (Operation), Ranga Reddy Circle (North), Gunrock, Secunderabad-15. 4 The Chair Person, The Forum for Redressal of Consumer Grievances of Central Power Distribution Company of A.P. Limited, Singareni Colleries Bhavan, Lakdikapool, Hyderabad. [1] 2007 (4) ALT 183