IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC WEDNESDAY, THE 12TH AUGUST 2009 / 21ST SRAVANA 1931 WP(C).No. 32337 of 2007(Y) --------------------------------------- PETITIONER: ------------------- M/S.THANIKKUDAM BAGAWATI MILLS LIMITED, THANIKUDAM, KURICHIKKARA P.O., THRISSUR - 680 028, REPRESENTED BY ITS MANAGING DIRECTOR, MR.S.NAGAMANICKKAM. BY ADVS. MR.DEVAN RAMACHANDRAN, SMT.T.G.SEETHAL. RESPONDENTS: ------------------------ 1. KERALA STATE ELECTRICITY BOARD, VYDHYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM - 695 004, REPRESENTED BY ITS SECRETARY. 2. KERALA STATE ELECTRICITY REGULATORY COMMISSION, VYDHYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM - 695 004, REPRESENTED BY ITS SECRETARY. 3. THE ASSISTANT ENGINEER, SECTION OFFICE, RAMAVARMA PURAM, KURIACHIRA P.O., THRISSUR DISTRICT – 680 028. R1 & R3 BY MR.C.K.KARUNAKARAN, SC, KSEB. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12/08/2009, ALONG WITH W.P.(C). NO.15835 OF 2008,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). NO.32337/2007-Y: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE REGULATION ISSUED BY THE R.2. DTD. 02/03/05. EXT.P.2: COPY OF THE ORDER ISSUED BY THE R.1. DTD. 30/06/07. EXTP.3: COPY OF THE CALCULATION SHEET PREPARED BY THE PETITIONER DTD. 24/10/07. EXT.P.4: COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE R.2. DTD. 23/10/07. EXT.P.5: COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER. RESPONDENTS' EXHIBITS: EXT.R1.A: COPY OF THE ORDER OF THE PROCEEDINGS OF THE SECRETARY DTD. 14/07/2008. EXT.R1.B: COPY OF THE RECOMMENDATIONS OF THE CODE REVIEW PANEL MADE IN THE MEETING HELD ON 16/01/2008. //TRUE COPY// P.A. TO JUDGE. Prv. ANTONY DOMINIC, J. ================ W.P.(C) NOs. 32337 OF 2007 & 15835 OF 2008 ======================== Dated this the 12th day of August, 2009 J U D G M E N T The petitioners in these writ petitions are High Tension Consumers availing of supply of electrical energy from the 1st respondent to meet the requirements of their industrial establishments. 2. In so far as the petitioner in WP(C) No.32337/07 is concerned, he has been a defaulter from the year 2000-01 onwards. Similarly, in so far as the petitioner in WP(C) No.15835/08 is concerned, it is stated that they have committed default for the period from July 2004 to May 2005. The prayer made by the petitioner in WP(C) No.32337/07 is to reduce the rate of interest claimed from 24% to 12%. In fact pursuant to an order passed by this Court, the claim raised by the petitioner in this writ petition was considered and was turned down by Ext.R1 (a) order which is also sought to be quashed. 3. In so far as the petitioner in WP(C) No.15835/08 is concerned, what is under challenge is Ext.P1, the revenue recovery proceedings initiated for recovering the amounts WPC 32337/07 & 15835/08 :2 : including the interest at 24% from the petitioner. According to the petitioner herein, they have already paid the energy charges along with interest at 12% and the dispute is only regarding the claim for interest at 24%. 4. The contention raised by the petitioners are the following. 5. According to them, prior to the implementation of the Kerala State Electricity Supply Code, 2005 w.e.f. 2/3/05, parties were governed by the provisions of the Conditions of Electrical Energy framed by the Electricity Board under Section 79(j) of the Electricity (Supply) Act, 1948. It is stated that under Clause 32(e) of the Conditions of Supply of Electrical Energy, defaulters were liable to pay interest at 24%. It was while so that the Supply Code, 2005 was implemented and as per Clause 23 thereof, it was ordered that in case of belated payments, penal interest at twice the Bank rate based on actual number of days of delay from the due date has to be charged by the licencee. The contention raised is that in the worst scenario, liability to pay interest in terms of Clause 32(e) of the Conditions of Supply could extend only till the WPC 32337/07 & 15835/08 :3 : introduction of Supply Code viz., till 2/3/05 and any demand for interest for the period subsequent there to, should only be in terms of the provisions contained in Clause 23 of the Supply Code, 2005. 6. This contention of the petitioners is sought to be contradicted by the counsel for the Electricity Board. According to the Board, the liability to pay the energy charges was incurred by the respective petitioners for periods including the period prior to 2.3.05. It is stated that liability for interest is a consequence on the default to discharge the liability and therefore the rate of interest that is applicable on the date of default, irrespective of the introduction of the Supply Code, is the rate as provided under Clause 32(e) of the Conditions of Supply of Electrical Energy, which is at 24% per annum. On this basis, it is contended that for defaults prior to 2/3/2005, rate of interest applicable is 24%. 7. Having considered the submissions made by the respective counselon either side, I am inclined to agree with the counsel for the petitioners. 8. As already stated the Conditions of Supply of Electrical WPC 32337/07 & 15835/08 :4 : Energy framed under Section 79(j) of the Electrical (Supply) Act, 1948 governed the relationship between the parties until 2/3/2005 and therefore the liability for payment of interest provided under Clause 32(e), also continued to apply to the parties so long as Conditions of Supply of Electrical Energy was in force. The Supply Code, 2005 admittedly came into force w.e.f. 2/3/2005 and therefore liability for interest since then has to be in terms of Clause 23 of the Supply Code, 2005. There is nothing in the Supply Code, 2005 which provides that any liability incurred prior to the introduction of the Supply Code will remain unaffected by the Supply Code, in which event, justifiably the Board could have contended that irrespective of the introduction of the Supply Code, 2005, interest at 24% as provided under Clause 32(e) of the Conditions of Supply should be paid by the defaulters as and when the liability is settled. In the absence of such a saving provision, in my view for the period subsequent to 2/3/2005 irrespective of whether the liability was already accrued at the time when the new Code was implemented, defaulters can be levied only at the rate as provided under Clause 23 of the Supply WPC 32337/07 & 15835/08 :5 : Code, 2005. If that be so, necessarily the demands made on the petitioners will have to be revised applying Clause 23 of the Supply Code, 2005 or the period subsequent to 2/3/2005. 9. Accordingly, Ext.R1(a) in WP(C) No.32337/07 and Ext.P1 in WP(C) No.15835/08 will stand quashed. It is directed that the respondents shall rework the liability of the petitioners applying interest as per Clause 32(e) of the Conditions of Supply for the period till 2/3/2005 and thereafter, as per Clause 23 of the Supply Code, 2005. Thereafter it will be open to the respondents to call upon the petitioners to discharge the liability due from them. Writ petitions are disposed of as above. ANTONY DOMINIC, JUDGE Rp