IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.T.RAVIKUMAR WEDNESDAY, THE 29TH JUNE 2011 / 8TH ASHADHA 1933 WP(C).No. 30414 of 2010(B) ---------------------------------- PETITIONER(S): ------------------- SREEDHAREEYAM AYURVEDA EYE HOSPITAL & RESEARCH CENTRE (P) LIMITED, KOOTHATTUKULAM, REPRESENTED BY SHRI K.S. BIJU PRASAD, CHIEF EXECUTIVE OFFICER. BY ADV. SRI.P.DEEPAK RESPONDENT(S): --------------------- 1. THE KERALA STATE ELECTRICITY BOARD REPRESENTED BY THE SPECIAL OFFICER REVENUE, VYDYUTHI BHAVANAM, THIRUVANANTHAPURAM. 2. THE STATE ELECTRICITY OMBUDSMAN THANAATH BUILDING, CLUB JUNCTION, POOKATTUPADI ROAD, EDAPALLY TOLL, ERNAKULAM. 3. THE CONSUMERS GRIEVANCE REDRESSAL FORUM. CENTRAL REGION, ERNAKULAM. 4. THE DEPUTY CHIEF ENGINEER, ELECTRICAL CIRCLE, PERUMBAVOOR, ERNAKULAM. 5. THE ASSISTANT ENGINEER, ELECTRICAL SECTION, KOTHATTUKULAM. 6. THE KERALA STATE REGULATORY COMMISSION THIRUVANANTHAPURAM. R1 TO 5 BY ADV. SRI.P.P.THAJUDEEN, SC, K.S.E.B R6 BY ADV. SRI. SREE KUMAR, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs W.P.(C). NO. 30414/2010 APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE HT AGREEMENT DATED 23/10/2000 P2: COPY OF THE APPLICATION DATED 31/03/2006. P3: COPY OF THE INSTALLATION COMPLETION REPORT DATED 31/03/06 P4: COPY OF THE POWER ALLOCATION DATED 30/03/2007. P5: COPY OF THE MAHAZZER DATED 08/09/2009. P6: COPY OF THE COMCPLAINT DATED 29/09/2009 FILED BEFORE THE CGRF. P7: COPY OF THE STATEMENT FILED BY THE 4TH RESPONDENT BEFORE THE CGRF. P8: COPY OF THE PROVISIONAL ASSESSMENT DATED 05/11/2009 P9: COPY OF THE AMENDED COMPLAINT DATED 11/11/2009 P10: COPY OF THE INTERIM ORDER OF CGRF DATED 26/11/2009 P11: COPY OF THE ORDER OF CGRF DATED 20/04/2010 P12: COPY OF THE REPRESENTATION DATED 17/05/2010 FILED BEFORE THE OMBUDSMAN. P13: COPY OF THE COUNTER-AFFIDAVIT DATED 22/06/2010 P14: COPYOF THE ORDER OF THE OMBUDSMAN DATED 23/09/2010 P15: COPY OF THE APPLICATION DATED 10/09/2009. P16: COPY OF THE COMMUNICATION DATED 17/09/2010 OF THE RESPONDENT, SERVED ON THE PETITIONER ON 04/10/2010 P17: COPY OF THE COMMUNICATION DATED 01/10/2010 OF THE RESPONDENT SERVED ON THE PETITIONER ON 06/10/2010 RESPONDENT'S EXHIBITS:NIL /TRUE COPY/ P.A. TO JUDGE. svs C.T.RAVIKUMAR, J. ---------------------------- W.P.(C)No.30414 of 2010 ---------------------------- Dated 29th June, 2011 JUDGMENT The petitioner - Sreedhareeyam Ayurveda Eye Hospital Research Centre (P) Limited, Koothattukulam - filed this writ petition mainly challenging Exts.P11 and P14 and seeking issuance of a writ in the nature of prohibition restraining the fifth respondent from proceeding further on Ext.P8 provisional assessment issued pursuant to Ext.P5 site mahazar prepared on 8.9.2009. An alternative prayer has also been made as hereunder:- “Alternatively, and without prejudice to the contentions, issue a writ in the nature of mandamus or such other writ, order or direction commanding the 4th & 5th respondents to pass orders on Exhibit P15 application for enhanced contract demand and power allocation without insisting on final settlement of the amounts demanded under Exhibit P8 provisional assessment.” 2. A succinct narration of the facts is required for the purpose of considering whether the petitioner is entitled to the aforesaid reliefs. Ext.P1 agreement was executed between the petitioner and the Kerala State Electricity Board (KSEB) on 23.10.2001 for supply of High Tension (HT) energy. The petitioner was assigned consumer No.24/3787 under HT IV (commercial) tariff with contract WP(C).No.30414/2010 2 demand of 50 KVA. As on 23.10.2001 the approved connected load was 77.92 KW. On 8.9.2009 the Anti Power Theft Squad (APTS) of KSEB inspected the petitioner's premises and found unauthorized additional load as well as unauthorized additional extension. Ext.P5 is the mahazar prepared after the said inspection. The inspection on 8.9.2009 revealed that the total load on the HT connection was 263 KW and there was an extension to an ATM counter of Federal Bank with connected load of 4.634 KW. Pursuant to the inspection the following matters were reported:- “(i) That the contract demand for consumer number HT 24/3787 is 50 KVA. (ii) That the average maximum demand for the last few years is more than 100 KVA. (iii) That the connected load as on the date of execution of Exhibit P1 agreement (23/10/2001) was 77.92 KW. (iv) That the total connected load as on the date of inspection (8/9/2009) was 263 KW. (v) That a load of 4.634 KW is seen extended for the functioning of an ATM counter of Federal Bank.” In view of the above findings as per Ext.P5, it was reported that there was violation of the terms of Ext.P1 agreement and that without executing a fresh agreement the petitioner had drawn additional load WP(C).No.30414/2010 3 and also extended the HT connection for the functioning of an ATM counter of Federal Bank with connected load of 4.634 KW and thus misused the energy. Thereupon, the petitioner has filed Ext.P6 complaint under Regulation 8 of the Kerala State Electricity Regulatory Commission (Consumer Redressal Forum and Electricity Ombudsman) Regulations, 2005 (for short `Regulations 2005') before the Consumers' Grievance Redressal Forum (CGRF). It was filed with prayers to quash Ext.P5 mahazar and also to direct the respondent to refund an amount of Rs.3,46,825/- collected for exceeding the contract demand. Thereafter, the Assistant Engineer of Koothattukulam Electrical Section issued Ext.P8 provisional bill for Rs.19,36,637/- on 5.11.2009 for unauthorized additional load and unauthorized additional extension. Consequently, Ext.P6 complaint was sought to be amended as per Ext.P9. On 26.11.2009 the CGRF passed Ext.P10 interim order directing that the supply to the petitioner's premises shall not be disconnected until further orders. Later, after hearing the petitioner and also the respondents Ext.P11 order dated 20.4.2010 was passed dismissing the complaint preferred by the petitioner. Feeling aggrieved by the same, the petitioner filed Ext.P12 representation dated 1.5.2010 before the Electricity Ombudsman under Regulation 19 of the Regulations, 2005. WP(C).No.30414/2010 4 Ext.P12 was rejected by the Ombudsman as per Ext.P14 order dated 23.9.2010. It is contended that with a view to give a quietus to the issue, the petitioner submitted a fresh application for enhancement of the contract demand from 50 KVA to 150 KVA, as per Ext.P15 dated 10.9.2009. However, the KSEB refused to proceed with Ext.P15 and also to enhance the contract demand on the ground that the amount due under the provisional assessment was not paid by the petitioner. It is in the said circumstances, challenging Exts.P11 and P14 and also seeking the alternative prayer as extracted above, that this writ petition has been filed. 3. After the institution of this writ petition the petitioner has filed I.A.No.13997 of 2010 for receiving additional documents viz., Exts.P16 and P17. Ext.P16 is a communication dated 17.9.2010 from the office of the 4th respondent intimating the petitioner that the additional load as demanded under Ext.P15 could be sanctioned only if the petitioner clears the pending arrears. As per Ext.P17 dated 1.10.2010 the petitioner was informed that an amount of Rs.56,34,794/- is due as arrears. However, no consequential amendment was effected to challenge Exts.P16 and P17. A statement has been filed on behalf of the first respondent KSEB. WP(C).No.30414/2010 5 4. I have heard the learned counsel appearing for the petitioner and also the learned standing counsel for the first respondent. 5. As per Ext.P1 agreement the contract demand as on 23.10.2001 was 50 KVA and as on that date the approved connected load was 77.92 KW. The inspection conducted on 8.9.2009 by the APTS wing of KSEB revealed that as on that day the total connected load was 263 KW and a load of 4.634 KW was seen extended for the functioning of an ATM counter of the Federal Bank Limited. The petitioner did not dispute the fact that the contract demand which was 50 KVA on 23.10.2001 in terms of Ext.P1 was extended to an ATM counter of Federal Bank with connected load of 4.634 KW and also that as on the date of inspection viz., on 8.9.2009 the connected load was 263 KW as against the approved connected load of 77.92 KW. The contention of the petitioner is that on 31.3.2006 the petitioner submitted an application for additional load seeking enhancement of the contract demand as 70 KVA. However, no action was taken thereon though section 43 of the Electricity Act, 2003 read with Regulations 5 and 6 of the Kerala Electricity Supply Code, 2005 make it obligatory on the part of the KSEB to provide power supply within one month from the date of the application. In other words, according to the petitioner, within one WP(C).No.30414/2010 6 month from 31.3.2006, in terms of the said application, the contract demand should have been enhanced as demanded. It is ignoring the laches and lapses on the part of the officials of the KSEB, in terms of the aforesaid provisions, that as per Ext.P5 the petitioner was condemned for not having got the additional load approved and also for not having executed an agreement. In this context, it is also to be noted that, even after alleging that an application for additional load was submitted as early as on 31.3.2006 the petitioner continued to pay penal charges without any demur. It was only after the inspection conducted on 8.9.2009 by the APTS wing of KSEB that the petitioner filed Ext.P6 complaint before the CGRF raising grievances against the inaction on the part of the officials of the KSEB in not enhancing the contract demand and regularizing the additional load besides throwing challenge against the findings in Ext.P5 mahazar and seeking refund of the amount already collected towards penal charges viz., Rs.3,46,825/-. 6. Ext.P6 complaint and also Ext.P9 amended complaint were considered by the CGRF and the petition filed by the petitioner was dismissed as per Ext.P11. As already noticed hereinbefore, either before the authorities or CGRF the petitioner did not dispute the fact that the approved connected load was only 77.92 KW and the contract WP(C).No.30414/2010 7 demand as per Ext.P1 was only 50 KVA. The facts that on the date of inspection by the APTS wing of KSEB viz., on 8.9.2009 the total load on the HT connection was 263 KW and the extension made to ATM counter of Federal Bank was with the connected load of 4.634 KW were also not disputed. True that, the contention of the petitioner is that going by the relevant provisions under the Electricity Act and also the Regulations referred above, within 30 days from the date of application that is, within 30 days from 31.3.2006, the first respondent should have provided power supply that is, should have enhanced the connected load and also the contract demand. Having failed to discharge the said statutory duty the first respondent and its officials cannot saddle the petitioner with the liability arising out of their lapses and laches, it is contended. In short, according to the petitioner, there was no justification or reason for collecting the penal charges and hence, it is liable to be refunded and the findings in Ext.P5 to the contrary were liable to be set aside. It is also contended that the application for enhancement of the connected load should have been considered and the additional load should have been regularised and the contract demand also should have been revised. The CGRF after hearing the rival contentions found that Ext.P1 agreement executed between the WP(C).No.30414/2010 8 petitioner and the KSEB was for a contract demand of 50 KVA and on account of the installation of additional load the contract demand exceeded. The alleged application for enhancement of power submitted on 31.3.2006 was not pursued by the petitioner and at any rate, the petitioner had not obtained it regularized. Along with the application the petitioner had not submitted the certificate from the Electrical Inspectorate taking note of the fact that the connection is one under the HT category and, therefore, on account of the non-production of the approval from the Electrical Inspectorate the application, if any, submitted was incomplete. Based on such findings it was held that the demand for penal charges was in tune with the provisions under the Electricity Act and the Regulations and it called for no interference. Since the petitioner had not disputed the fact that the connected load was only 77.92 KW and an additional load of 4.634 KW was seen extended to an ATM counter of the Federal Bank in the petitioner's premises Ext.P8 provisional assessment bill amounting to Rs.19,36,637/- was issued under section 126 of the Electricity Act, 2003 (for short `the Act'). In case the petitioner got any grievance it could be challenged under section 127 of the Act before the concerned Deputy Chief Engineer, it was further held. While dismissing the complaint preferred by the WP(C).No.30414/2010 9 petitioner as per Ext.P11 order it was observed that it would be open to the petitioner to prefer an appeal before the Electricity Ombudsman. Accordingly, the petitioner had submitted Ext.P12 appeal, in troth, representation, as contemplated under Regulation 19 of the Regulations, 2005 before the Electricity Ombudsman. The petitioner had sought for the following reliefs:- “(i) To declare the scene mahazar dated 8.9.2009 viz., Ext.P5 as null and void. (ii) to direct the KSEB to refund the amount of Rs.3,46,825/- collected in the pretext of excess Maximum Demand. (iii) to declare the bill dated 5.11.2009 viz., Ext.P8 herein for Rs.19,36,637/- as null and void. (iv) to set aside the order dated 20.4.2010 of CGRF viz., Ext.P11.; and (v) to allow Rs.1,00,000/- as expenditure for filing the petition and to recommend the Kerala State Electricity Regulatory Commission to proceed against KSEB for non compliance with the directions and the Electricity Act, 2003. 7. After hearing the contentions, the Electricity Ombudsman, as per Ext.P14, dismissed Ext.P12 representation. The Ombudsman found that the petitioner as well as the officials of the KSEB had failed to adhere to the agreement conditions and to observe the rules and WP(C).No.30414/2010 10 procedures. Taking note of the fact that the actual recorded Maximum Demand had exceeded regularly from May, 2005 onwards by an average of 30 KVA it was found that even if the contention of the petitioner that the application for regularization of additional load was submitted on 31.6.2006 was taken as correct, it was done only after about 11 months since the petitioner started drawing around more than 30 KVA which was over and above the contract demand. While holding that there is no material before the Ombudsman to accept the contention of the first respondent that the application of the petitioner along with the papers were returned on account of certain defects it was observed that till 8.9.2009, the date on which the APTS wing of KSEB inspected the petitioner's premises the petitioner had not taken any step for getting regularization of the additional load. The contention of the petitioner that the regularization of additional load based on application dated 31.3.2006 was only a procedural one and approval from the Electrical Inspectorate was absolutely uncalled for was not upheld by the CGRF. In that context, it is also to be noted that while connection was originally given to the petitioner it was, admittedly, done after the approval from the Electrical Inspectorate. It is a connection under the HT category. No provision was seen relied on by the petitioner to contend and prove that WP(C).No.30414/2010 11 such an approval from the Electrical Inspectorate was not necessary for regularization of the additional load and that it was only a procedural formality. As per Ext.P14, the challenge against Ext.P5 mahazar dated 8.9.2009 was also repelled. Ext.P14 would reveal that the Ombudsman had not considered the issue raised by the petitioner any further taking into account the fact that the Kerala State Electricity Regulatory Commission had clarified on 15.6.2010 that unauthorized additional load is an issue coming under section 126 of the Act. In the light of the said clarification the Ombudsman declined jurisdiction to entertain grievances relating to section 126 of the Electricity Act, 2003. Accordingly, it was held that the petitioner would be free to approach the competent authorities under sections 126 and 127 of the Act. Further, it was held thereunder that if the petitioner had submitted fresh papers for regularization of additional load and revising the contract demand in May, 2010 and the respondent had not taken any action on the matter, on the ground of pendency of the dispute, the respondents therein were to regularize the additional load and to revise the contract demand with effect from the date of the new application as per rules, once the consumer pays the finally settled assessment and a direction to that effect was accordingly, given. WP(C).No.30414/2010 12 8. It is thus obvious from the facts narrated above that both CGRF and also the Electricity Ombudsman found that the remedy of the petitioner to challenge against the actions on the part of the first respondent and its officers in demanding penal charges for unauthorized additional load is a matter falling under section 126 of the Act. In the context of the contentions, it is relevant to refer to section 126 of the Electricity Act. It reads thus:- “126. Assessment.- (1) If on an inspection of any place or premises or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection of records maintained by any person, the assessing officer comes to the conclusion that such person is indulging in unauthorised use of electricity, he shall provisionally assess to the best of his judgment the electricity charges payable by such person or by any other person benefited by such use. (2) The order of provisional assessment shall be served upon the person in occupation or possession or in charge of the place or premises in such manner as may be prescribed. (3) The person, on whom an order has been served under sub-section (2), shall be entitled to file objections, if any, against the provisional assessment before the assessing officer, who shall, after affording a reasonable opportunity of hearing to such person, pass a final order of assessment within thirty days from the date of service of such order of provisional WP(C).No.30414/2010 13 assessment, of the electricity charges payable by such person. (4) Any person served with the order of provisional assessment may, accept such assessment and deposit the assessed amount with the licensee within seven days of service of such provisional assessment order upon him. (5) If the assessing officer reaches to the conclusion that unauthorized use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorized use of electricity has taken place and if, however, the period during which such unauthorized use of electricity has taken place cannot be ascertained, such period shall be limited to a period of twelve months immediately preceding the date of inspection. (6) The assessment under the section shall be made at a rate equal to twice the tariff applicable for the relevant category of services specified in sub- section (5).” The petitioner has not disputed the correctness of the observation made by the Ombudsman in Ext.P14 that the Kerala State Electricity Regulatory Commission had clarified on 15.6.2010 that the unauthorized additional load is a matter falling under section 126 of the Act. Though the petitioner is contending that the issue involved in this case is not one falling under section 126 of the Electricity Act, the petitioner had not challenged the clarification issued by the Kerala State Electricity Regulatory Commission on 15.6.2010 that was relied on by the WP(C).No.30414/2010 14 Electricity Ombudsman to hold that it is a matter falling under section 126 of the Act or the finding of the Ombudsman that the grievances related to section 126 could not be entertained by the Ombudsman. 9. The contention of the petitioner is that the issue raised before the CGRF was one pertaining to the defect/deficiency in electricity service provided by the licencee and also failure on the part of the licencee to perform its obligation under section 43 of the Act and also against the finding in Ext.P5 mahazar regarding the unauthorized use of energy. Based on the said contention it is contended that the finding that the issues involved fall under section 126 of the Act is unsustainable. As already noted, the contract demand was only 50 KVA as per Ext.P1 and that on account of the extension of the HT connection to an ATM counter of Federal Bank with connected load of 4.634 KW the contract demand was enhanced and the connected load as on 8.9.2009, was also seen enhanced much above the approved connected load of 77.92 KW. These facts remained undisputed before the CGRF as also before the Ombudsman. The contention is that the petitioner had submitted an application for enhancement of the connected load on 31.3.2006 and in view of section 43 of the Act and also Regulations 5 & 6 of the Kerala Electricity Supply Code, 2005 the first respondent should WP(C).No.30414/2010 15 have enhanced the connected load and should have revised and enhanced contract demand in terms of the said application. Since it was not done in terms of the said provisions there is no justification for the observation in Ext.P5 mahazar that functioning of the ATM counter in the premises tantamounts to unauthorized use of energy. To sustain the contentions the petitioner relied on the decision of the Hon'ble Apex Court in Punjab State Electricity Board Ltd. v. Zora Singh and others reported in (2005) 6 SCC 776. The liability on account of unreasonable delay in supply of electric connection in the light of the relevant provisions under the Punjab State Electricity Board Sales Regulations, 1999 and Electricity (Supply) Act, 1948 and other enactments and was considered by the Hon'ble Apex Court. The petitioner relies on the provisions under Section 43 of the Electricity Act, 2003 and Regulations 5 & 6 of the Kerala Electricity Supply Code, 2005 and also the decision of the Hon'ble Apex Court in Punjab State Electricity Board's case (supra) to contend that on account of the failure on the part of the KSEB to enhance the connected load and also to revise the contract demand after the receipt of application dated 31.3.2006 the demand for penal charge is unsustainable. In this case, the application was admittedly, not made for getting supply of electricity. WP(C).No.30414/2010 16 In fact, the issue involved in the case on hand is with respect to unauthorised additional load and unauthorised additional extension. The factual statement with respect to the connected load and contract demand was not refuted by the petitioner. The petitioner did not have a case that on mere expiry of thirty days since the submission of application dated 31.3.2006 the additional load could be taken as regularized. I do not propose to consider the rival contentions regarding the non-production of certificate showing the approval or sanction from the Electrical Inspectorate along with the application dated 31.3.2006 in view of the order I propose to pass in this writ petition. Evidently, the petitioner did not have a case that extension to ATM counter of the Federal Bank with connected load of 4.634 KW was made with requisite sanction or permission from the competent authority under the KSEB in accordance with the prescribed procedures. The provisional assessment was made in the said circumstances. Grievance relating such assessment will fall under Section 126 of the Electricity Act. The fact that the said question is intertwined with the other questions such as failure to act upon the application dated 31.3.2006 cannot take the actual issue involved in the case on hand outside the purview of Section 126 of the Act. I am of the view that considering the fact that there is WP(C).No.30414/2010 17 no challenge against Exts.P16 and P17 and also considering the fact that there is challenge against Ext.P8 provisional assessment, the course open to the petitioner is to avail the remedy under section 126 of the Act. Any finding of this Court on merits on the other issues viz., with respect to the question whether the action on the part of the petitioner in not getting the additional load regularized and extending the HT connection to ATM counter of Federal Bank with connected load 4.634 KW are legal or not would definitely hamper the prospects of the