IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH AT HYDERABAD THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.No.3203 of 2008 Date: 10th November, 2010 Between M/s Anagha Binny Rice Mill, Cherlagowraram Village, Kanagal Mandal, Nalgonda District, Rep. by its Proprietrix, B.Vasavamba. .. Petitioner and The Central Power Distribution Company of A.P. Ltd., Singareni Bhavan, Red Hills, Hyderabad, rep. by its Chairman and Managing Director and others. .. Respondents THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.No.3203 of 2008 ORAL ORDER: This writ petition is filed seeking a Mandamus declaring the notice dated 1.11.2007 issued by fourth respondent as arbitrary, illegal and contrary to Condition No.12.1.2 of general terms and conditions of Supply and Section 56 of Electricity Act, 2003 and consequently set aside the same. It appears, petitioner is a Rice Mill Unit located at Cherlagowraram village, Kanagal mandal, Nalgonda district. It has obtained service connection under L.T. Category-III bearing Service Connection No.440 from the first respondent. According to the petitioner, the service connection is being inspected by the officials of the first respondent at regular intervals and such inspections are being conducted once in a month for the purpose of taking meter reading. Petitioner has been paying power consumption charges as raised by fifth respondent from time to time. While that being so, the impugned notice dated 1.11.2007 has been issued by fourth respondent stating that the reading of the service connection was reviewed by the internal audit and found that there is a shortfall of Rs.47,071/- towards low power factor/exceeding connected load charges. After receiving the said notice, petitioner made a detailed representation to the third respondent on 4.12.2007 stating that as per clause 5.13.1 of general terms and conditions of supply framed by first respondent in exercise of powers conferred under Section 16 of the Act, as approved by the Regulatory Commission vide proceedings dated 6.1.2006, the L.T. Consumers using induction motors shall install L.T. Stunt Capacitors as specified. Even the first respondent can install the capacitors of required rating and shall recover the expenditure incurred thereon from the consumers. As per condition No.12.1.2 of the said general terms and conditions of supply, if the capacitors installed are found damaged or became defective or ceased to function, the designated officer shall serve a notice on the consumers requiring them to rectify the defect in the capacitors within 30 days, but in the event of failure on the part of consumer to comply with the same, the distribution company may levy surcharge as specified by the Commission in the tariff orders issued from time to time. In this case, no such procedure has been followed nor the capacitor was found defective in the inspection conducted by the officials. Further, as per Section 56(2) of Electricity Act, 2003, no sum due from any consumer 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 arrear of charges for electricity supplied and the licensee shall not cut off the supply of the electricity. In the present case, there was no mention in the impugned notice as to any earlier dues payable by the petitioner. To support his case, the learned counsel for petitioner relied upon the judgment in M/S ARIF SPINNING MILLS, JALPALLY v. ASSISTANT DIVISIONAL ENGINEER, OPERATION, A.P.S.E.B. SAROORNAGAR AND OTHERS[1], wherein under identical circumstances, a Division Bench of this Court held as under: “This mandates that the consumer shall be served with a notice to get the capacitor replaced/rectified or corrected within 30 days of the inspection and intimate the fact of replacement/rectification to the concerned Section Officer, Operation, of the Board etc. In the view we had taken that it is not established that petitioner did not instal the capacitor at the time when the energy was released to its unit, it can only be that at the time when the inspection was made the capacitor, which was originally installed, became defective and was therefore removed -- at any rate there was no capacitor on the date of the inspection: we do not see why the said condition is not attracted to such a situation also. If we are right in this, then the respondents ought to have given 30 days notice to the petitioner requiring it to instal a new capacitor. It may be that to satisfy themselves the respondents could have required the production of the earlier capacitor, which might have been removed because of its malfunctioning. In the present case we see that in the affidavit in support of the Writ Petition it has been asserted that as on the date of that affidavit i.e. 14-12-1989 the petitioner's unit had a capacitor. That has not been denied in the counter-affidavits filed and it is not the case of the respondents that the petitioner's unit had been working without a capacitor after the letter dated 8-11-1989 was served on the petitioner or that the petitioner had not in fact installed a capacitor subsequently. Condition No. 38.9(a), after the amendment, enables the respondents to levy surcharge only in the event of the petitioner failing to instal a capacitor after a 30 days notice was served on it as mandated under that Condition. In view of the failure of the respondents in producing the relevant records before us and in the light of the above discussion, we have to allow this writ petition and it is accordingly allowed.” The respondents have filed a detailed counter denying the allegations made by the petitioner and stated that no inspection was conducted by any of the officers of the company. In the internal audit conducted by the company, the auditors made certain objections as to non-collecting of surcharge for failure to install capacitor, therefore the present demand notice has been issued. Having heard both sides and perused the impugned notice and other material made available on record, I am of the view that even as per Clause 12.1.2, the respondents are duty bound to issue notice before raising any demand of this nature. If any capacitor is found defective, the inspecting authority, within 30 days from the date of inspection, shall issue notice and then decide the matter as per law. Admittedly, in this case no such procedure has been followed. On the basis of internal audit conducted, straightaway the impugned notice has been issued asking the petitioner to pay an amount of Rs.47,071/-. In view of the judgment referred above and as well as in view of admitted facts, I am of the considered opinion that the impugned notice issued by the respondents suffers from gross violation of principles of natural justice apart from being contrary to the general terms and conditions of agreement. Therefore, the impugned notice is liable to be set aside. In the result, the writ petition is allowed and the impugned notice is set aside. However, it is made clear that this will not preclude the respondents from issuing any show cause notice on the basis of any evidence available before them after furnishing copies of such evidence to the petitioner and taking appropriate action, as required under law. No order as to costs. ______________ C.V.RAMULU, J Date: 10.11.2010 AK THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.No.3203 of 2008 10.11.2010 [1] AIR 1998 AP 48