IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC THURSDAY, THE 11TH JUNE 2009 / 21ST JYAISHTA 1931 WP(C).No. 18428 of 2006(R) -------------------------- PETITIONER(S): --------------- THE PRINCIPAL, THANGAL KUNJU MUSALIAR COLLEGE OF ENGINEERING, KOLLAM. BY ADV. SRI.N.SUGATHAN SMT.VARSHA BHASKAR SRI.S.PRASANTH (AYYAPPANKAVU) RESPONDENT(S): --------------- 1. KERALA STATE ELECTRICITY BOARD, THIRUVANANTHAPURAM, REPRESENTED BY THE SECRETARY. 2. ACCOUNTS OFFICER, K.S.E.B., VYDHYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM. 3. DEPUTY CHIEF ENGINEER, K.S.E.B., ELECTRICAL CIRCLE, KOLLAM. 4. THE ASSISTANT ENGINEER, K.S.E.B., ELECTRICAL SECTION, KILIKOLLOOR, KOLLAM. ADV. SRI.C.K.KARUNAKARAN, SC FOR KSEB FOR R1 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC NO.18428/2006 APPENDIX PETITIONER'S EXHIBITS P1 : COPY OF the ORDER DATED 23/04/1990 OF THE KSEB. P2 : COPY OF the LETTER DATED 11/07/1997 BY THE PETITIONER. P3 : COPY OF THE LETTER DATED 20/12/2003 BY THE KSEB. P4 : COPY OF the REPLY DATED 04/02/2004 BY THE PETTIONER. P5 : COPY OF the ORDER DATED 04/05/2004 OF THE KSEB. P6 : COPY OF the LETTER DATED 29/05/2004 OF the KSEB. P7 : COPY OF the LETTER DATED 13/07/2004 OF the KSEB. P8 : COPY OF the LETTER DATED 04/08/2004 BY THE PETITIONER. P9 : COPY OF THE LETTER DATED 24/11/2004 BY THE PETITIONER. P10 : COPY OF THE POWER ALLOCATION ORDER DATED 18/10/2004. P11 : COPY OF THE CHART SHOWING THE SPLIT UP DETAILS OF FINE. P12 : COPY OF THE POWER BILL DATED 06/04/2004. P13 : COPY OF THE ORDER DATED 16/04/2005 OF THE KSEB. P14 : COPYH OF THE APPEAL PETITION DATED 28/04/2005. P15 : COPY OF the ORDER DATED 26/06/2006 OF THE KSEB. P16 : COPY OF THE QUOTATION DATED 04/10/2006. P17 : COPY OF THE PROFORMA INVOICE DATED 18/11/1991 ISSUED FOR THE PURCHASE OF L.T.2 PART METER. P18 : COPY OF THE BILL DATED 11/12/1991 ISSUED FOR THE PURCHASE OF L.T.2 PART METER. //TRUE COPY// PA TO JUDGE. jg ANTONY DOMINIC, J. ------------------------- W.P.(C.) No.18428 of 2006 --------------------------------- Dated, this the 11th day of June, 2009 J U D G M E N T The petitioner, an educational institution, has filed this writ petition challenging Exts.P13 & P15. They also seek a direction to respondents 1 & 2 to refund the energy charges and demand charges levied as fine as per Annexure III of Ext.P14. 2. The petitioner was a Low Tension consumer. The billing method adopted in respect of consumers like the petitioner was objected to by various educational institutions including the petitioner. Considering the objections so raised, Ext.P1 order was issued by the Board on 23/04/1990, which inter alia provided that in the case of educational institutions having connected load above 100 KVA and availing of supply at L.T. and hence to bill at H.T., the billing demand shall be taken as 50 KVA and billed provisionally as a special case from March, 1989 onwards till two part tariff meters are installed by them. It is also stated that in such cases, an undertaking to the effect that additional amount, if any, shall be WP(C) No.18428/2006 -2- paid based on actual recorded maximum demand and 75% contract demand, when they install LT two part tariff meters, and also to execute agreement specifying contract demand, has to be obtained from the consumers. The benefit of Ext.P1 order was extended to the petitioner, and that they were being billed taking 50 KVA, as the billing demand. 3. The petitioner’s case is that as per Exts.P18 dated 11/12/1991, they purchased a two part meter, which was also tested by the TMR unit of the Board. Since then, according to them, they have been requesting the Board to install the meter, but, however, it was not done. Despite reminders, the position continued as such. It is stated that on 02/03/2002, a two part meter was installed by the Board themselves, and consumption was being recorded on that basis. According to the petitioner, by about May, 2003, on account of its non-use, the meter purchased by them way back in 1991 was found defective. However, in May, 2004, the aforesaid meter installed by the Board was found to be faulty, and was reset. Subsequently, the Board issued Ext.P7 dated 13/07/2004 calling upon the petitioner to install the two part meter. The petitioner’s case is that once the Board reset the two WP(C) No.18428/2006 -3- part meter, which it had installed in March, 2002, adopting average consumption of June, July, and August, 2004, the arrears due from the petitioner for the period from April 1990 to June, 2004, was calculated and an amount of Rs.11,48,952/- was demanded by issuing Ext.P13. On its receipt, the petitioner submitted Ext.P14 objecting to the quantification of its liability. Accordingly, the matter was reconsidered, and the Board issued Ext.P15 demanding a total sum of Rs.12,82,564/-. This included Rs.35,750/- towards short assessment of minimum demand for the period from March, 1989 to March, 1990, and Rs.95,927/- towards 25% of energy charges levied as penalty for non-installation of TOD meter for the period from May, 2004 to November, 2004. It is in the aforesaid background, the petitioner is challenging Exts.P13 & P15. 4. The other challenge raised by the petitioner is regarding the levy of fine. The petitioner submits that by Annexure III of Ext.P14, Rs.4,49,909.77 was realized towards fine for the alleged delay on its part in installing the two part meter. It is stated that 25% of the energy charges for the period from January, 2002 to November, 2004 is what is levied on this account. The petitioner is also objecting to levy of Rs.45,787.50 as fine for the period from WP(C) No.18428/2006 -4- July 2004 to November, 2004 for the alleged delay in signing the H.T. agreement. Therefore, the challenge is against Exts.P13, P15 and also against the levy of fine of Rs.4,49,909.77 and Rs.45,787.50 as per Annexure III of Ext.P14. 5. On facts, the learned standing counsel for the Board would submit that since May, 1989, L.T. consumers having connected load above 100 KVA were treated as H.T. consumers. It is stated that educational institutions were complaining against the new billing method and it was therefore that a provisional arrangement was made by Ext.P1 order, which was to remain in force till the installation of two part meter, which also was to be procured by the consumer. It is stated that the benefit of Ext.P1 was extended to the petitioner also. The allegation of the petitioner that they acquired a meter as per Ext.P17 invoice and that the same was produced before the respondent Board is specifically denied by them. The learned standing counsel also makes reference to Ext.P17 and submits that the said invoice does not show the purchase of a meter as claimed by the writ petitioner. It is stated that without installing the meter, the procurement of which was the obligation of the petitioner, the petitioner enjoyed the benefit of the WP(C) No.18428/2006 -5- provisional billing as per Ext.P1. It is stated that, when the meter was found to be faulty, the respondent had installed the meter on 02/03/2002, and consumption of energy was being recorded. It is stated that only in May, 2004, the meter installed on 02/03/2002 was reset, and that two part metering system was introduced only thereafter. It is contended that once the two part metering system was introduced, the average consumption of June, July and August was taken for calculation of arrears, as provided in Clause 31(C) of the Conditions of Supply of Electrical Energy, and that arrears for the period from April, 1990 to June, 2004 was demanded. It is stated that the said period is the period, during which the petitioner was enjoying the benefit of the provisional billing system introduced by Ext.P1 order referred to above. 6. In this context, one of the contentions raised by the learned counsel for the petitioner to be noticed is that during the period 1990-2004, according to them, there has been considerable increase in the consumption of energy. Therefore, the learned counsel for the petitioner contended that if the average consumption of June, July and August, 2004 is taken for billing for the period from 1990 onwards, that will be totally unrelated to the WP(C) No.18428/2006 -6- actual quantity that was being consumed by the petitioner. 7. This contention of the learned counsel for the petitioner is sought to be contradicted by the learned standing counsel for the Board by referring to the petitioner’s own averments in paragraph 3 of the writ petition, where, they say that in 1990, the College started regular courses in B.Tech degree, and they purchased 200 computers during 2000. It is pointed out that in between, only the development pointed out in the writ petition is that in September, 2000, they applied for accreditation to National Board of Accreditation, New Delhi, and that 50 computers were acquired in 2001, and that they started modernization of laboratories, and infrastructure. It is on this basis, the learned standing counsel for the Board argued that no substantial variation in the consumption has been pleaded in this writ petition. 8. In so far as the permissibility of levy of arrears is concerned, the learned standing counsel for the Board would submit that the petitioner had the obligation to provide the two part meter, and without complying with the same, they enjoyed the benefit provisional billing through out the period. It is contended that such a person cannot, in the absence of any statutory provision WP(C) No.18428/2006 -7- preventing the Board from realising its dues, claim delay on the part of the Board, and avoid payment of the amount that is legitimately due. 9. In so far as the penalty that is levied on the petitioner by Annexure III of Ext.P14 is concerned, the learned counsel for the petitioner would submit that no regulation framed by the Board authorises it to levy 25% of the energy charges as penalty. Answering this contention, the learned standing counsel for Board would submit that for the delay in installing the two part meter is concerned, the tariff order of 2002 authorises levy of penalty at 25% of the energy charges. It is stated that it was on this basis that penalty of Rs.4,49,909.77 was levied on the petitioner for the period from January, 2002 to November, 2004. 10. In so far as the penalty of Rs.45,787.50 levied on the petitioner towards the delay in the execution of the H.T. agreement is concerned, the learned counsel for the petitioner submits that on 23/04/2004, they applied for additional power allocation, that by order dated 18/10/2004, the Board allowed the same. Installation works were completed on 21/10/2004, and that inspection was held on 05/11/2004, and that agreement was signed on WP(C) No.18428/2006 -8- 24/11/2004. On this basis, it is submitted that there was absolutely no delay on their part, rendering them liable for any penalty. However, the learned standing counsel for the Board answers this contention of the learned counsel petitioner on the ground that although, the petitioner had the obligation to have got the agreement executed as early as in April, 2004, the fact remains that it was signed only in November, 2004, and therefore, the levy of 25% of demand charges is permissible. 11. The first issue that arises for consideration is the correctness of Exts.P13 & P15, where the Board has demanded arrears from the petitioner for the period from April, 1990 to June, 2004, adopting average consumption of June, July and August, 2004. As already stated, by Ext.P1 order dated 23/04/1990, 50 KVA was adopted as billing demand on a provisional basis till two part meter is installed. Consumers were also required to give an undertaking, agreeing to pay the difference once the two part meter is installed. Admittedly, a H.T. consumer like the petitioner had the obligation to provide the meter. Although relying on Ext.P17 invoice, the petitioner contends that two part meter was acquired, that the meter was tested by the TMR unit of the Board, and that WP(C) No.18428/2006 -9- despite their requests, the Board did not install the same, Exts.P17 & P18 invoices produced along with the writ petition do not show that these invoices were issued in relation to any meter that the petitioner had purchased. Therefore, nothing acceptable has been placed on record to prove that a two part meter was made available by the petitioner, and that it was the fault of the Officers of the Board, which resulted in the provisional billing system introduced by Ext.P1 continuing till 2004. True, on 02/03/2002, the Board themselves installed a meter, which was also capable of functioning as a two part meter. However, the meter was reset only in May, 2004, and the two part metering system was introduced only from June, 2004. In such a situation, it was not possible for the Board to adopt the previous three months’ average consumption as provided in Clause 31(C) of the Conditions of Supply of Electrical Energy. Consequently, the Board was well justified in calculating the average consumption adopting the consumption of June, July and August, 2004. 12. Once the calculation of the average is upheld, the other question to be considered is whether the Board could have issued a demand on the petitioner for the period commencing from April, WP(C) No.18428/2006 -10- 1990. No provision of law has brought to my notice preventing or restraining the Board from demanding the arrears. If that be so, ordinarily, the Board should be competent to demand its dues. That apart, the petitioner was enjoying the benefit of Ext.P1, and was aware of the fact that when two part metering system is adopted, they will be called upon to pay dues for the period when billing was done based on Ext.P1. 13. I cannot also find fault with the Board in adopting the average of three months’ as the basis of the demand. This is for the reason that when a meter is installed at a subsequent point of time, quantification of the previous liability can only be based on the average consumption of energy as provided under Section 31(C) of the Conditions of Supply. Therefore, even if there is any substance in the allegation of the petitioner, that there has been variation in the quantity consumed by them, so long as Clause 31(C) remains in the Conditions of Supply, the Board was fully justified in demanding the arrears, based on the average consumption, quantified as provided in the Regulations. In the circumstances, I cannot find anything unreasonable in the conduct of the Board, and nor can I find any delay on the part of the Board in this behalf. Therefore, WP(C) No.18428/2006 -11- Exts.P13 & P15 have to be sustained, and I do so. 14. In so far as the delay in not fixing the two part meter is concerned, by Annexure III of Ext.P14, an amount of Rs.4,49,909.77 has been levied on the petitioner towards penalty for the period from June, 2002 to November, 2004. The contention raised is that there is no fault on the petitioner’s part, and that a meter was in fact installed by the Board itself on 02/03/2002. It is also the petitioner's contention that there is no Rule justifying this levy. In the facts of this case, I am not in a position to find that there was any delay on the part of the Board in installing two part meter, in as much as the petitioner has not succeeded in proving, they had discharged their obligation and made available a meter for installation. Although, a meter was installed by the Board on 02/03/2002, on facts I have found that the two part metering system was introduced only from May, 2004, when the meter was reset. The 2001 tariff order provides that if a consumer fails to provide the meter, the consumer is liable to be penalized at 25% of the energy charges. In this case, admittedly, the consumer provided the meter only in November, 2004. Therefore, the penalty levied on the petitioner for the period from June, 2002 to November, 2004 is WP(C) No.18428/2006 -12- liable to be upheld. 15. The other penalty levied is Rs.45,787.50. This is towards the delay in the execution of H.T. agreement. On facts, it is evident that the petitioner applied of power allocation on 23/04/2004, and order was passed by the Board allowing the same only on 18/10/2004. Installation was completed on 21/10/2004, and inspection was conducted on 05/11/2004. Immediately, thereafter, on 24/11/2004, the H.T. agreement was also signed by the petitioner. Despite this, the petitioner has been penalized for the period from July, 2004 to November, 2004. Evidently, the delay has occurred on account of the delay on the part of the Board in passing orders on the application of the petitioner. Once orders were passed, there was absolutely no delay on the part of the petitioner rendering them liable for penalty of Rs.45,787.50, which is 25% of the demand charges. Therefore, the levy of penalty of Rs.45,787.50 imposed as per Annexure III of Ext.P14 is liable to be set aside, and I do so. 16. The learned counsel for the petitioner contended that the demand for the period from April, 1990 is barred by limitation in view of the provisions contained under Section 56(2) of the Indian WP(C) No.18428/2006 -13- Electricity Act, 2003. This contention of the learned counsel for the petitioner is only to be rejected in view of the judgment of this Court in WP(C) No.90/2009, which is confirmed in W.A.No.476/2009, where this Court has held that the period of limitation starts only after a demand is made, which in this case is by Exts.P13 & P15. Therefore, this argument is only to be rejected, and I do so. The writ petition is, accordingly, disposed of quashing the levy of Rs.45,787.50 as penalty, and in all other respects, Exts.P13 & P15 will stand upheld. (ANTONY DOMINIC, JUDGE) jg