IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH AT:: HYDERABAD. FRIDAY, THE NINETH DAY OF APRIL TWO THOUSAND AND TEN PRESENT:: HON’BLE SMT. JUSTICE T.MEENA KUMARI AND HON’BLE SRI JUSTICE G.V.SEETHAPATHY W.A.Nos.37 & 1053 OF 2001 Between:- The K.C.P. Ltd., (Ramakrishna Cements), Macherla, Guntur Dist. Rep. by its Plant Manager Sri K.Venkataramaiah. …Appellant A n d The A.P.S.E.B., Vidyut Soudha, Somajiguda, Hyderabad rep. by its Secretary and others. …Respondents A N D Andhra Pradesh State Electricity Board, (Now APTRANSCO) rep. by its Secretary, Vidyut Soudha, Somajiguda, Hyderabad. ..Appellant A n d M/s K.C.P. Limited (Ramakrishna Cements), Macherla, Guntur Dist. Rep. by its Plant Manager Sri K.Venkataramaiah and another. …Respondents HON’BLE SMT. JUSTICE T.MEENA KUMARI AND HON’BLE SRI JUSTICE G.V.SEETHAPATHY W.A.Nos.37 & 1053 OF 2001 COMMON ORDER:(Per GVS,J) These two appeals arise out of a common order dated 01-11-1999 in W.P.No.16587 of 1990. 2. W.P.No.16587 of 1990 is filed by K.C.P Limited against the A.P. State Electricity Board seeking a writ in the nature of Mandamus directing the respondents to refund the unauthorisedly collected amount of service line charges and service connection charges collected by them for the release of the additional load of 3000 KVA along with interest from the date of payment till the date of repayment after declaring B.P.Ms.No.1160 (Commercial), dated 03-11-1989 as ultra vires to the provisions and procedures prescribed under the Indian Electricity Act, 1910. 3. The case of the writ petitioner-KCP Limited may be stated, in brief, as under:- The petitioner entered into an agreement with the first respondent-Board and is availing electricity supply for the purpose of cement plant at Macherla classified as High Tension (H.T) consumer. The petitioner was initially availing supply at a voltage of 11 KV. The Board issued B.P.Ms.No.607, dated 21-07-1981 whereunder the consumers availing H.T supply were required to change over to the stipulated voltages depending on their contracted maximum demand. The petitioner was, thus, required to avail supply at 132 KV in place of existing 11 KV. The petitioner spent a crore of rupees in making arrangements to receive supply at 132 KV by erecting a sub-station. The petitioner was also asked to pay 32.263 lakhs towards service line charges, which were duly paid for the purpose of laying 132 KV supply line to its factory. The petitioner started availing supply of 132 KV from 23- 06-1989 because of the delay on the part of the Board in releasing the supply at 132 KV. On account of modernization and expansion of the cement plan, the petitioner, in order to meet the additional requirement, requisitioned for additional load of 3000 KVA over and above the existing demand of 8000 KVA on 20-07-1988. The same was sanctioned and the petitioner was asked to pay a sum of Rs.18 lakhs towards service line charges and Rs.20,000/- towards service connection charges for releasing the additional demand and the said amounts were paid on 24-11-1989. The additional load was released on 11-01-1990. According to the petitioner, the release of additional load does not require installation of any additional equipment or laying of service lines and, therefore, the collection of Rs.18 lakhs towards service line charges is unjustified. The service line charges are payable only towards cost of laying new service lines or amend the existing service lines, as may be necessary in respect of which requisition is made excluding the first 100 ft from the licensee’s distributing mains. The levy and collection of Rs.20,000/- as service connection charges is also unauthorized, irregular and improper. The release of additional load is without rendering any service and the charges claimed are arbitrary and confiscatory in nature. The petitioner, therefore, questions the legality and validity of levy and collection of Rs.18 lakhs towards service line charges and Rs.20,000/- towards service connection charges for releasing of additional load of 3000 KVA. The petitioner also questions the legality and validity of B.P.Ms.No.1160 (Commercial), dated 03-11-1989 and also the mode of computation of service line charges, as illegal and ultra vires to the provisions of the Indian Electricity Act, 1910 (for short ‘the Electricity Act’). 4. The respondents filed counter opposing the writ petition and contending, in brief, as follows:- The first respondent-Board is a statutory body constituted under Section 5 of the Electricity (Supply) Act, 1948 (for short ‘the Supply Act’) charged with the obligation to supply electricity. The Board had invested enormous amounts of several hundreds of crores of rupees for acquisition of equipment and establishing the generating stations and for laying distribution lines etc., for transmitting the power and distributing the same among the various classes of consumers at different voltages. Before extending the supply to consumers through service lines, the Board has to transmit the power through transmission lines to sub-stations depending on the capacity of generating stations and sub-stations. Wherever new/additional loads are requisitioned by the existing/prospective consumers, the Board invariably has to make necessary changes to its infrastructure either by increasing the capacity of the sub-stations or by erecting new sub-stations. In some cases, the capacity of the generating stations had to be increased which required enormous amount of capital investment. Initially, the Board was collecting the cost of service line charges from the consumers/prospective consumers under voluntary loan contribution scheme, whereunder the amount collected towards service line charges were refundable after the stipulated period together with interest. As the said system was not satisfactory and was found to be not in accordance with the statutory provisions, the Board by B.P.Ms.No.693, dated 19-09-1985 introduced the system of collection of service line charges with reference to connected load/CMD requisitioned. After detailed examination and in supercession of the earlier orders and in exercise of power under Section 49 of the Supply Act, the Board issued B.P.Ms.No.1160 (Commercial), dated 03-11-1989 introducing the system of collection of service line charges including the charges for amendment of existing lines, if any required. The said charges shall be collected on the basis of power requisitioned both for new and additional loads and at the slab rates for each kilometre of the distance between the distributing main and consumer’s point of supply. In the annexure appended to the said proceedings, the service line charges payable by different categories consumers were specified. In respect of the petitioner’s company which is receiving supply at 132 KV, the service line charges stipulated were Rs.600/- per each KVA of demand requisitioned plus line charges of Rs.5 lakhs per kilometre. Pursuant to the said orders, the service line charges were calculated and collected from the petitioner. Hence, the petitioner is not entitled to claim refund of the said amounts. As B.P.Ms.No.1160, dated 03-11-1989 was issued by the Board in exercise of the statutory power under Section 49 read with Section 59 of the Supply Act, the said proceedings are valid and legal. 5. It is not disputed that during the pendency of the writ petition, the petitioner approached the Chief Electrical Inspector, Government of Andhra Pradesh, raising a dispute as regards collection of service line charges and the Electrical Inspector purporting to exercise the power under Clause VI (3) of the schedule of the Electricity Act had decided that the respondent-Board had not incurred any expenditure in releasing the additional load of 3000 KVA and accordingly held that the Board is not entitled to collect the said sum from the petitioner and also declared that B.P.Ms.No.1160, dated 03-11-1989 is inconsistent with Clause VI of the Electricity Act and thus not valid. 6. The respondent-Board filed W.P.No.863 of 1993 questioning the order passed by the Chief Electrical Inspector inter alia contending that the Chief Electrical Inspector had no jurisdiction to decide the dispute. It is further contended by the Board that under Clause VI (3) of the schedule, the Electrical Inspector is empowered to adjudicate any dispute or difference relating to the cost of any service line and the subject matter of the dispute does not fall within the jurisdiction of the Electrical Inspector, as the amount so collected from the petitioner, though styled as service line charges, in effect is only in the nature of recouping the huge investments made and to be made by the Board on EHT/HT/LT lines, establishment of sub- stations, erection of distribution transformers, establishment of generating stations etc. The Board, therefore, contends that the order dated 30-05-1992 passed by the Electrical Inspector is without jurisdiction and is liable to be set aside. 7. The writ petition was opposed by the petitioner- company and also by the Chief Electrical Inspector. The petitioner-company would contend that the Electrical Inspector was having jurisdiction to decide a dispute by virtue of Clause VI (3) of the schedule to the Electricity Act and consequently the order passed by the Electrical Inspector is justified. It is further contended by the petitioner that the Board has an effective alternative remedy by way of appeal as provided by Section 36(2) of the Electricity Act and, therefore, the writ petition is not maintainable. 8. The learned Single Judge following the decision of the Apex Court in DR.SMT.KUNTESH GUPTA VS. MANAGEMENT OF HINDU KANYA MAHA VIDYALAYA, SEETHAPUR AND OTHERS (AIR 1987 SC 2186), wherein it was held that the availability of alternative remedy is not an absolute bar for maintainability of the writ petition, especially in cases where the authority who passed the order had acted wholly without jurisdiction and in view of the fact that the validity of B.P.Ms.No.1160, dated 03-11-1989 is subject matter of W.P.No.16587 of 1990 filed by the petitioner-company, rejected the contention of the petitioner regarding the maintainability of W.P.No.863 of 1993 on the ground of availability of alternative remedy. 9. The main question, which arose for consideration in W.P.No.16587 of 1990, was whether B.P.Ms.No.1160 (Commercial), dated 03-11-1989 was illegal and contrary to the provisions of the Supply Act and the Electricity Act, as contended by the petitioner-company. 10. The learned Single Judge following the law laid down by the Apex Court in a catena of decisions including KERALA STATE ELECTRICITY BOARD VS. S.N.GOVINDA PRABHU AND BROTHERS (1986(4) SCC 199), HINDUSTAN ZINC LIMITED VS. ANDHRA PRADESH STATE ELECTRICITY BOARD AND OTHERS (1991(3) SCC 299), SRI SEETHARAM SUGAR COMPANY LIMITED AND ANOTHER VS. UNION OF INDIA AND OTHERS (1990(3) SCC 223) and BIHAR STATE ELECTRICITY BOARD AND ANOTHER VS. USHA MARTIN INDUSTRIES AND ANOTHER (1997(5) SCC 289) held that fixation of price is legislative in character and unless it is shown that the said fixation is unreasonable and arbitrary, the Court shall loathe to interfere with the said fixation, and rejected the contention of the petitioner-company that the fixation of the charges under the impugned proceedings was confiscatory and penal in nature. On the contention of the Board that the Electrical Inspector erred in entertaining the dispute without jurisdiction and, therefore, the order dated 30-05-1992 passed by the Electrical Inspector is liable to be set aside, the learned Single Judge held that the Electrical Inspector erroneously concluded that the Board proceedings are inconsistent with Clause VI of the schedule, as he failed to notice the power of the Board in issuing the impugned proceedings. Accordingly, the learned Single Judge set aside the finding of the Electrical Inspector to the extent that B.P.Ms.No.1160 is inconsistent with Clause VI of the schedule. The learned Single Judge also held that collection of Rs.20,000/- towards service connection charges is in accordance with the condition framed in exercise of the powers under Section 49 and having regard to the quantum, the said amount is neither unreasonable nor arbitrary. Accordingly, the learned Single Judge disposed of the two writ petitions as under: i) B.P.Ms.No.1160 (Commercial), dated 03-11-1989 is intra vires of the powers of the Board and is traceable to Section 49 of the Electricity (Supply) Act, 1948 to the extent it prescribes charges per KVA of requisitioned demand and is not inconsistent with Clause VI of the Schedule. ii) That part of B.P.Ms.No.1160, dated 03-11-1989 which purports to levy line charges at the fixed rates in addition to per KVA charges is inconsistent with Clause VI of the Schedule of the Indian Electricity Act, 1910 and it is hereby declared that the Board is entitled to collect only the actual cost of service line charges incurred by the Board for extending supply to the consumer from its distribution main to the consumer’s premises. iii) The finding of the Electrical Inspector that B.P.Ms.No.1160 (Commercial), dated 03-11-1989 is inconsistent with Clause VI is set aside subject to para (ii) above. iv) The demand and collection of service connection charges at the rates stipulated by the Board is neither arbitrary nor confiscatory and thereby upheld. Aggrieved by the said findings and directions, the petitioner-KCP Limited filed an appeal in W.A.No.37 of 2001 and the A.P.S.E.B filed other appeal in W.A.No.1053 of 2001. 11. Arguments of the learned counsel for the appellants and respondents in both the appeals are heard. Records are perused. 12. The main contention of the learned counsel for the appellant-company is that it is the statutory duty of the respondent to install and maintain the distribution lines for supply of energy to the subject consumer and it is the statutory obligation of the respondent-Board to provide necessary infrastructure for supplying electricity up to the point of supply and as per the definition of ‘service line’ in Section 2(l) of the Indian Electricity Act, 1910, service line means any electric supply line through which energy is transmitted from the distributing main to the consumer’s premises. He would further contend that as per proviso (b) to Clause VI (1) of the schedule to the Indian Electricity Act, the power of the respondent-Board to collect service line charges is restricted and the respondent-Board is entitled to collect the actual cost incurred for laying the service line beyond one hundred feet from the distributing main and the respondent-Board being a creature of statute cannot act beyond or de hors the Acts and Rules. He would further contend that the Chief Electrical Inspector is empowered to decide any dispute with regard to the cost of laying the service line and the learned Single Judge erred in holding otherwise. The learned counsel for the appellant-company would further contend that B.P.Ms.No.1160 (Commercial), dated 03-11-1989 is ultra vires the powers of the respondent- Board and the Board is not justified in issuing the said proceedings when specific power is conferred on it under Section 59 of the Electricity (Supply) Act to defray the capital cost for generating and supplying the energy, by making resort to Section 49 of the Electricity (Supply) Act. He would further contend that under Section 49 of the Supply Act, the Board is empowered to fix uniform tariff and the capital cost, if any, incurred by the Board in laying the supply lines would form part of the tariff and cannot be collected otherwise. He would further contend that levy of any amount in the name of service line charges without reference to the actual cost incurred amounts to levying the tax. 13. The learned counsel for the respondent-Board, on the other hand, would contend that B.P.Ms.No.1160 (Commercial), dated 03-11-1989 was issued by the Board in exercise of powers under Section 49 of the Supply Act introducing the system of collection of service line charges on the basis of the power requisitioned both for new and additional loads at slab rate per each kilometre distance between the distribution main and consumer’s point of supply and the annexure specifies the charges payable by different categories of consumers and the said proceeding issued under Section 49 read with Section 59 of the Supply Act are valid and intra vires. He would further contend that the Chief Electrical Inspector had no jurisdiction to decide the dispute regarding collection of service line charges and his finding that B.P.Ms.No.1160, dated 03-11-1989 is inconsistent with Clause VI of the Electricity Act, is unsustainable. He would further contend that under Clause VI (3) of the schedule, the Electrical Inspector is empowered to adjudicate any dispute or difference relating to the cost of any service line but the subject matter of the present dispute does not fall within the jurisdiction of the Electrical Inspector as the amount collected from the petitioner, though styled as service line charges, in effect, is in the nature of partially recouping the capital cost incurred in establishment and maintenance of the sub-stations, erection of distribution transformers and establishment of generating stations etc. 14. During the pendency of W.P.No.16587 of 1990, the petitioner-Company approached the Chief Electrical Inspector who purporting to exercise power under Section VI (3) of the schedule to the Electricity Act entertained the dispute and held that the Board had not incurred any additional expenditure for releasing of additional load of 3000 KVA and, therefore, is not entitled to collect any amount towards service line charges and declared that B.P.Ms.No.1160 (Commercial), dated 03-11-1989 is inconsistent with Clause VI of the Electricity Act and, therefore, not valid. Aggrieved by the said orders passed by the Chief Electrical Inspector, the Board filed W.P.No.863 of 1993 questioning the orders passed by the Chief Electrical Inspector. The petitioner-Company while seeking to justify the orders passed by the Chief Electrical Inspector also contended that the Board has an effective alternative remedy by way of appeal under Section 36 (2) of the Electricity Act and, therefore, the writ petition is not maintainable. The Chief Electrical Inspector being a quasi-judicial authority also filed a counter and contested the writ petition. The learned Single Judge, while dealing with the preliminary objection regarding the maintainability of the writ petition in view of the available alternative remedy of appeal and relying on the judgment in DR.SMT.KUNTESH GUPTA VS MANAGEMENT OF HINDU KANYA MAHA VIDYALAYA, SEETHAPUR AND OTHERS (AIR 1987 SC 2186), held that availability of alternative remedy is not an absolute bar to the maintainability of the writ petition, especially when the authority who passed the order acted wholly without jurisdiction. The question of validity of B.P.Ms.No.1160 (Commercial), dated 03-11-1989 is also seized by the Court in W.P.No.16587 of 1990 and, therefore, the learned Single Judge had rightly rejected the contention of the petitioner-company regarding the maintainability of the writ petition on the ground of availability of alternative remedy, because the Chief Electrical Inspector had considered the very same question and held B.P.Ms.No.1160 (Commercial), dated 03-11-1989 to be invalid. 15. In view of the rival contentions of the parties, the core question, which falls for consideration is – whether B.P.Ms.No.1160 (Commercial), dated 03-11-1989 is legal and valid and whether the respondent-Board is entitled to collect the service line charges as contemplated therein? 1 6 . It is not disputed that the petitioner-company entered into an agreement with the respondent-Board for supply of electricity for the purpose of cement plant at Macherla under the category of High Tension (H.T) consumer. The petitioner was initially availing supply at a voltage of 11 KV. Subsequently, the petitioner started availing supply of 132 KV. Owing to expansion and modernization of its cement plant, the petitioner-company requisitioned for additional load of 3000 KVA over and above the existing demand of 8000 KVA on 20-07-1988. The same was sanctioned and the petitioner was asked to pay a sum of Rs.18 lakhs towards service line charges and Rs.20,000/- towards service connection charges for releasing the additional demand. The said amounts were paid on 24-11-1989 and additional load was released on 11-01-1990. The petitioner disputes its liability for payment of the said Rs.18 lakhs towards service line charges on the ground that the said charges are payable only towards actual cost of laying the lines or to amend the existing service line as may be necessary and the additional load requisitioned does not involve installation of any additional equipment or additional service lines. The respondent-Board seeks to justify the levy of the said amount towards service line charges on the ground that for meeting the demand for new/additional loads requisitioned by the existing/ prospective consumers, the Board has to necessarily make changes in its infrastructure by increasing the capacity of the sub- stations and by erecting new sub-stations and sometimes to increase the capacity of the generating stations and transmitting the power through the transmission lines incurring heavy capital investment and the same is liable to be met by the consumers at least partially. 17. It is not disputed that initially the Board issued B.P.Ms.No.693, dated 19-09-1985 introducing the system of collection of service line charges with reference to connected load/CMD requisitioned and subsequently on further examination, the Board issued B.P.Ms.No.1160 (Commercial), dated 03-11-1989 in exercise of its powers under Section 49 of the Supply Act and in supercession of the earlier proceedings in B.P.Ms.No.693. B.P.Ms.No.1160 states that it is equitable if the cost of extensions are borne by all the prospective consumers for which such expansion works have been effected and this could be done by apportioning the cost of extension with reference to connected load/CMD requested for and the point at which the supply is required and the voltage of supply. Clause 4 of B.P.Ms.No.1160 contemplates, among other things, levy of two kinds of charges (i) service line charges including charges for amendment of existing line, if any, required to be collected based on the power requisitioned both for new and additional loads and the distance between the consumer’s premises and point of supply and (ii) line charges from main to consumer’s point of supply which is worked out after deducting cost of the line laid on the property other than the consumer’s property, subject to maximum of 30.48 metres. Various rates are indicated in the annexure applicable to different categories of consumers. In respect of the petitioner’s- company, which was receiving supply at 132 KV, the charges prescribed are Rs.600/- per KVA of CMD plus line charges of Rs.5 lakhs per kilometre. Accordingly, the service line charges and the line charges were demanded and collected from the petitioner. 17. B.P.Ms.No.1160 shows that it was issued in exercise of the powers conferred under Section 49 of the Electricity (Supply) Act. Section 49(1) of the Supply Act enables the Board to supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and for the purposes of such supply frame uniform tariffs. Sub-section (2) enumerates the various factors, which the Board shall have to keep in mind while fixing the uniform tariffs. Sub-section (3) enables the Board to fix different tariffs for supply of electricity to any person when it is considered necessary or expedient to do so having regard to the geographical position of the area and nature of supply and purpose for which supply is required and other relevant factors. The only limitation imposed in sub- section (4) is that in fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person. In exercise of the above powers conferred under Section 49, B.P.Ms.No.1160 purports to have been issued. 18. In HYDERABAD VANASPATI LIMITED VS. ANDHRA PRADESH STATE ELECTRICITY BOARD AND OTHERS (1998 (4) SCC 470), the Apex Court examined the power of the Board to frame the terms and conditions of supply and held that Section 49 empowers the Board to supply electricity on such terms and conditions as it thinks fit and the said terms and conditions are statutory in character. It was further held by the Apex Court that even in the absence of any individual contracts, the terms and conditions of supply notified by the Board will be applicable to the consumer and he shall be bound by them. The Apex Court rejected the view that the terms and conditions of supply are contractual and held that they are statutory in character. In JAGADAMBA PAPER INDUSTRIES (P) LTD., AND OTHERS VS. HARYANA STATE ELECTRICITY BOARD AND OTHERS (1983 (4) SCC 508), the Apex Court upheld the power of the Board to unilaterally revise the conditions of supply. In HYDERBAD ENGINEERING WORKS LIMITED AND OTHERS VS ANDHRA PRADESH STATE ELECTRICITY BOAD AND OTHERS (1988(2) SCC 181), the Apex Court upheld