IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE SHAJI P.CHALY TUESDAY, THE 8TH DAY OF MARCH 2016/18TH PHALGUNA, 1937 O.P.No. 17297 of 1998 (H) ------------------------- PETITIONER(S): ---------------------- 1. M/S. PRINCE ROLLINGS (P) LTD., KINASSERY, PALAKKAD, REPRESENTED BY ITS MANAGING DIRECTOR. 2. M/S. PRINCE ALLOYS (P) LTD., KINASSERY, PALAKKAD, REPRESENTED BY ITS MANAGING DIRECTOR. BY ADVS.SRI.S.RAMESH BABU (SR.) SRI.S.ANANTHAKRISHNAN RESPONDENT(S): ------------------------- 1. STATE OF KERALA, REPRESENTED BY ITS PRINCIPAL SECRETARY, POWER DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM. 2. KERALA STATE ELECTRICITY BOARD, REPRESENTED BY ITS SECRETARY, VYDHYUTHY BHAVAN, THIRUVANANTHAPURAM. 3. SPECIAL OFFICER (REVENUE), KERALA STATE ELECTRICITY BOARD, VYDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM. R1 BY GOVERNMENT PLEADER R2-R3 BY ADV. SRI.P.SANTHALINGAM (SR.) R2-R3 BY ADV. SRI.S.SHARAN,SC,K.S.E.BOARD THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 19-02-2016, THE COURT ON 08.03.2016 DELIVERED THE FOLLOWING: P.T.O. O.P.No. 17297 of 1998 (H) APPENDIX PETITIONERS' EXHIBITS: EXT.P1 TRUE COPY OF THE JUDGMENT DATED 12.09.1997 IN O.P.16413/97. EXT.P2 TRUE COPY OF THE RELEVANT EXTRACT OF THE BOARD ORDER DATED. 11.01.1996. EXT.P3 TRUE COPY OF THE NOTIFICATION DATED 15.02.1996. EXT.P4 TRUE COPY OF THE ORDER DATED 03.09.1997. EXT.P5 TRUE COPY OF THE RELEVANT EXTRACT OF THE ORDER DATED 12.02.1996. EXT.P6 TRUE COPY OF THE JUDGMENT IN O.P.NO.7537/97. EXT.P7 TRUE COPY OF THE PROCEEDINGS DATED 26.08.1998 OF THE PETITIONERS. EXT.P8 TRUE COPY OF THE PROCEEDINGS DATED 26.08.1998 OF THE PETITIONERS. EXT.P9 TRUE COPY OF THE LETTER DATED 01.09.1998 TO THE 1ST PETITIONER. EXT.P10 TRUE COPY OF THE LETTER DATED 01.09.1998 TO THE 2ND PETITIONER. EXT.P11 TRUE COPY OF THE JUDGMENT DATED 28.11.1997. EXT.P12 TRUE COPY OF THE ORDER DATED 01.08.1998. EXT.P13 TRUE COPY OF THE BILLS FOR THE MONTH OF JUNE AND JULY, 1997. EXT.P14 TRUE COPY OF THE BILLS FOR THE MONTH OF JUNE AND JULY, 1997. EXT.P15 TRUE COPY OF THE BOARD ORDER DATED 30.07.1996. EXT.P16 TRUE COPY OF THE ORDER DATED 31.10.1996. EXT.P17 TRUE COPY OF THE BOARD ORDER DATED 25.11.1996. EXT.P18 TRUE COPY OF THE BOARD ORDER DATED 25.07.1997. EXT.P19 TRUE COPY OF THE ORDER DATED 11.02.1998. EXT.P20 TRUE COPY OF THE ORDER DATED 01.07.1997. EXT.P21 TRUE COPY OF THE GOVT. ORDER DATED 11.12.1997. EXT.P22 TRUE COPY OF THE ORDER DATED 12.12.1997. P.T.O. O.P.No. 17297 of 1998 (H) :-2-: EXT.P23 TRUE COPY OF THE ORDER DATED 31.01.1998. EXT.P24 TRUE COPY OF THE GOVT. ORDER DATED 21.05.1990. EXT.P25 TRUE COPY OF THE GOVT. ORDER DATED 06.02.1992. EXT.P26 TRUE COPY OF STATEMENT SHOWING DETAILS OF THE POWER CUT IMPOSED DURING THE PERIOD FROM 24.12.1996 TILL 14.12.1997 WHEN POWER CUT WAS OFFICIALLY WITHDRAWN. EXT.P27 TRUE COPY OF THE STATEMENT SHOWING THE MONTHLY QUOTA AND ACTUAL CONSUMPTION OF FIRST PETITIONER. EXT.P28 TRUE COPY OF THE STATEMENT SHOWING THE MONTHLY QUOTA AND ACTUAL CONSUMPTION OF SECOND PETITIONER. EXT.P29 TRUE COPY OF THE ORDER DATED 07.08.2010 PASSED BY THE 2ND RESPONDENT. RESPONDENTS' EXHIBITS: EXT.R2(A) TRUE COPY OF THE BILL ISSUED TO THE 1ST PETITIONER FOR DECEMBER, 1996. EXT.R2(B) TRUE COPY OF THE BILL ISSUED TO THE 2ND PETITIONER FOR DECEMBER, 1996. EXT.R2(C) TRUE COPY OF THE PRO FORMA OF THE AGREEMENT WITH RESPECT TO THE SUPPLY OF HT ENERGY. EXT.R2(D) TRUE COPY OF THE ORDER DATED 24.06.2003 PASSED BY THE 1ST RESPONDENT. //TRUE COPY// P.S. TO JUDGE St/- SHAJI P. CHALY, J. -------------------------------------------------- O.P. No.17297 of 1998 ----------------------------------------------- Dated this the 8th day of March, 2016 JUDGMENT This writ petition is filed by the petitioners seeking to quash Exts.P7 to P10 electricity bills issued to them, Ext.P12 order passed by the 2nd respondent, Ext.P19 Board letter dated 11.02.1998 and seeking other related reliefs. When the matter was taken up for hearing, learned counsel appearing for the petitioners submitted that even though several reliefs are sought for in the Original Petition, they are not pressing the same, except the question with regard to the quota of power that was available to the petitioners for the period from 01.09.1997 to 14.12.1997 and thereby whether the petitioners are entitled to get 175 units per KVA, as per the base average of 250 units per KVA provided in Ext.P2 or whether they are entitled to get only 125 units per KVA throughout the period of power cut, as per Ext.P15 Board order. 2. Facts required for disposal of the Original Petition with respect to the aforesaid aspects alone are narrated hereunder. O.P. No.17297 of 1998 2 3. Petitioners are industries, set up on the promise of exemption from power cut for the first 5 years, exemption from electricity duty and sales tax for the first 5 years and provision for pre-1992 tariff for the first 5 years, as per G.O. (Ms.) No.71/90/ dated 21.05.1990. Both petitioners are High Tension consumers with Consumer Nos.3251 and 3252 respectively and are entitled to exemption from electricity duty and also for payment under pre-1992 rates. 4. When power cut was introduced in January, 1996, base average of existing consumers was fixed on the basis of the consumption during January 1995 to December, 1995. But in the case of new consumers, it was ordered that the base average would be calculated at the rate of 250 units per KVA, on contract demand. That 250 units per KVA was made on the basis of an assumed load factor of 0.4 was absolutely without any rational basis. Hence the petitioners and others approached the Government and also filed O.P. No.16413 of 1997 praying for a quota for at least 400 units per KVA, which was disposed of by this Court, directing the Government to decide the issue, evident from Ext.P1. It is the case of the O.P. No.17297 of 1998 3 petitioners that in spite of the direction contained in Ext.P1 judgment, the same was not complied with. 5. By Ext.P2 Board order dated 11.01.1996, 250 units was fixed as the base average consumption for HT consumers provided with connection after 01.01.1996. Thereafter, By Ext.P3, Government issued a notification dated 15.02.1996, in which it is stated that the base average of new consumers of 1996 are to be worked out on the principles applicable to Industrial Units getting connection after 01.01.1996, which is provided in Ext.P2. For those industries, 50% power cut was introduced then. Thereafter in June, the power cut was 100%, which was relaxed to 75%, continued at 50% and with effect from 01.09.1997, the 1st respondent reduced the power cut of HT and EHT consumers to 30%, as per Ext.P4 order dated 03.09.1997. It is pointed out by the petitioners that by Ext.P4, irrespective of new or old units, power cut is imposed at 30% with effect from 01.09.1997. 6. The 1st respondent issued Ext.P5 order dated 12.02.1996, clarifying the base average position with particular reference to new Industries seeking the benefits for the first 5 years. It is specifically stated in paragraph 2 of the O.P. No.17297 of 1998 4 said order that in the case of new industries starting commercial production after 01.01.1996, the quota will be as per the formula indicated in Ext.P2 Board order dated 11.01.1996. 7. Petitioners have filed Original Petitions before this Court claiming the benefits of pre-1992 tariff, which may not be required for consideration in view of the limited reliefs pressed into service. It is the case of the petitioners that, without properly calculating the benefits provided under Ext.P2 by the 2nd respondent and taking into account respective notifications issued successively, Exts.P7 and P8 proceedings were issued. It is the further contention of the petitioners that on receipt of Exts.P7 and P8, the discrepancy thus occurred were pointed out to the 3rd respondent, that even admitted amounts were not given due credit etc. etc. Thereupon, it is contended by the petitioners that, the 3rd respondent has issued Exts.P9 and P10 dated 01.09.1998, deducting the admitted amounts. 8. That apart, it is contended that as per Ext.P7, 1st petitioner has remitted an amount of Rs.9,22,390-40 from 12/1996 to 2/1998 and Rs.43,51,416/- from 3/1998 to O.P. No.17297 of 1998 5 7/1998. Similarly, by Ext.P8, 2nd petitioner was directed to make an excess payment to the tune of Rs.5,54,545-40 for the period from 12/1996 to 2/1998 and Rs.48,42,731/- from 3/1998 to 7/1998. It is the contention of the petitioners that they were asked to remit the said amount by 10.09.1998, in spite of the mistakes committed by the 2nd respondent in calculating the consumption charges. 9. That apart, it is contended that during 01.09.1997 to 15.12.1997, energy charges are calculated on the basis of a wrong fixation of quota at the rate of 125 units per KVA, which is only 50% of the base average, when during the said period the power cut was only 30%. Therefore, it is contended that petitioners are entitled for 70% of the base average of 250 units per KVA, viz. 175 units per KVA. In spite of issuing the bills on that basis, bills for the said periods are worked out arbitrarily and illegally applying the excess carry forward formula. That apart, it is also contended that the penalty alone in that regard in the case of the petitioners would be Rs.45 lakhs. From July, 1997 onwards there is only penalty for excess consumption. It is contended further that excess would be carried forward to succeeding months. O.P. No.17297 of 1998 6 10. It is also contended that in the case of quota with regard to the period 01.09.1997 to 15.12.1997, petitioners had approached this Court and secured Ext.P11 judgment dated 28.11.1997, directing the Board to consider the grievances of the petitioners. Pursuant to the direction so issued, 2nd respondent has passed Ext.P12 order dated 01.08.1998 declining to grant the benefit of the base average of 250 units per KVA and its 70% quota. It is contended by the petitioners that Ext.P12 is passed absolutely in a casual manner and the same is arbitrary and passed without properly applying the principles that are set forth in respective orders passed by the 1st and 2nd respondents. It is also contended that in Ext.P12, the 2nd respondent has admitted that it is bound by the direction issued by the 1st respondent. That apart, petitioners assailed Ext.P12 order by contending that in Ext.P3 order, the power cut percentage of new industries was fixed at 50%, however, the Government issued several modifications on the power cut percentage in June, July and August, 1997 and evidently it can be seen from Ext.P4 that power cut of HT consumers was reduced to 30%. It is the contention of the petitioners that they are entitled to get 70% O.P. No.17297 of 1998 7 of the base average at par with, though not fully, the other units. The base average under Ext.P5 is calculated on the basis of Ext.P2, contends the counsel. The petitioners have also assailed the version of the 2nd respondent that the quota of the petitioners remain fixed at 125 units per KVA of the base average. 11. It is also the case of the petitioners that, on a perusal of Exts.P13 and P14 bills for the months of June and July, 1997, it is apparent and clear that there was 75%, 70% and 50% cut on the petitioners also. It is also contended that, as per Exts.P15 and P16, the 2nd respondent has fixed the base average as 250 units per KVA in supersession of the earlier Board letter dated 30.07.1996. However, quite strangely, the Board had taken a stand in Ext.P12 that the said provision in Ext.P16 was withdrawn by the Board as per Ext.P17 dated 25.11.1996. Therefore, it is the contention of the petitioners that, by issuing Ext.P16, the Board enabled the consumers to consume in excess of the normal monthly quota up to base average and the Board reiterated Ext.P2 and ordered therein that the base average of 250 units per KVA for new consumers. In Ext.P17, the Board has decided to modify O.P. No.17297 of 1998 8 Ext.P16 taking into account the deteriorating power position and to limit the monthly consumption not exceeding the monthly quota, is the contention advanced by the petitioners. That apart, it is contended that it is the said provision that the 2nd respondent has now twisted and wrongly interpreted that it has withdrawn the base average fixation. It is also contended that in Ext.P17 there is absolutely no expression like “withdrawal” used. Therefore, it is contended that the petitioners are entitled for units proportionate to the power cut taking into account the base average of 250 units per KVA. It is also contended that by Ext.P18, irrespective of the nature of industries, power cut was made equal to all and 50% power was provided to all industries of the HT category. It is thus challenging Exts.P7 to P10 and P12 orders passed by the Board, this Original Petition is preferred by the petitioners, and now limiting the reliefs sought for as recorded above. 12. 2nd respondent has filed a counter affidavit refuting the allegations and claims and demands made by the petitioners and inter alia contending that the Board as per Exts.P2 and P3 fixed the quota for consumers energised on and after 01.01.1996 as 125 units per KVA of the Contract Demand O.P. No.17297 of 1998 9 irrespective of higher reduction of power cut above the said 50% of the base average fixed. That apart, it is contended that the monthly quota and base average to consumers for whom power cut is applicable were ordered by the Board in pursuance of Government Orders imposing power cut in the State with effect from 07.01.1996. It is also contended that this is in exercise of Sec.22B of the Indian Electricity Act, 1910, that the State Government ordered a power cut in the State in order to tide over critical shortage position in the Hydel Reservoirs and also to ensure equitable distribution of power in the State. That apart, it is contended that base average and monthly quota are fixed for existing consumers according to their actual consumption during the period 1/1995 to 12/1995. The consumers who were given connections after 01.01.1996, the above principles could not be applied for the reason that there is no previous consumption to take such a quota. Therefore, the Board in its wisdom fixed quota to such HT consumers based on their demand. That apart, it is contended that as per Ext.P3 Government Order dated 15.2.1996, the ban was relaxed on providing new connections. It was thereupon ordered that the quota for new HT consumers O.P. No.17297 of 1998 10 will be 50% of the requirements. Base average of HT Consumers was fixed at 250 units per KVA per month, it is contended. Therefore, 125 units per KVA was fixed as monthly quota and this was never changed except during 6/1997 and 7/1997, when the power shortage was acute and even when 100% power cut had to be enforced. 13. It is also contended that as per Board order dated 03.09.1997, power cut was reduced from 50% to 30%. But, however the said reduction of power cut is not applicable to the petitioners since they belong to the category of consumers to whom the connection was given after 01.01.1996 and therefore the monthly quota of 125 units per KVA will apply during the above period to them. Thereupon, it is contended that even while old consumers were being subjected to varying percentage of power cut, all new consumers were continued to be supplied 125 units per KVA, except during the period of 100% power cut. The demand of the petitioners to allow 70% of the base average of 250 units i.e. 175 units per KVA from 9/1997 cannot thus be accepted. Therefore, it is contended that it was taking into account the said circumstances, Ext.P12 was passed by the 2nd respondent and the same is valid, legal O.P. No.17297 of 1998 11 and sustainable under law. 14. Petitioners have filed a reply affidavit to the same, refuting the contentions so advanced by the 2nd respondent and reiterating the stand that petitioners are entitled to avail the quota fixed to them treating the base average at 250 units per KVA and the proportionate quota of the base average in accordance with varying orders issued by the Board during the period of power cut. The contention advanced by the Board on its counter that the petitioners are entitled always for 50% of the quota fixed based on 125 units per KVA permanently fixed for them irrespective of the varying orders passed by the Board is denied. That apart, it is contended that on a perusal of Exts.P26, P27 and P28, it would show that whenever there was 50% power cut, the monthly quota of the petitioners is pegged at 50% of the base average of 4,87,500 units, viz. 2,43,750 units. But when power cut was increased from 50%, the quota was proportionately reduced. Thus it is contended that during June, 1997 when there were varying percentages of power cut, varying from 50% to 95%, the monthly quota of the petitioners were drastically varied. So also, it is contended that during July, 1997 there was 75% power cut during the O.P. No.17297 of 1998 12 period 01.07.1997 to 11.07.1997 and during 12.07.1997 to 27.07.1997. Therefore, it is contended that if the base average of the petitioners were permanent at 125 units per KVA, the monthly quota should have been pegged at 50% of the base average in spite of the enhancement of power cut over and above 50%. Therefore, it is contended that since the quota was varied in accordance with the successive Board orders, the stand taken by the Board that the quota fixed for the petitioners were 50% all through out, cannot be sustained. It is also contended that the monthly quota was never increased at any point of time when the percentage of power cut was reduced. Thus, during January, February and March, 1997 there was only 30% power cut imposed. Thus meant that the petitioners were normally have been found to be entitled to 70% of the base average. But the monthly quota of the petitioners were still capped at 50% of the base average and these restrictions were imposed during January, February and March, 1997 so for as the petitioners are concerned. It is also contended that when the percentage of power cut was reduced to 30% from 01.09.1997, the petitioners should have been provided to consume up to 70% of base average of O.P. No.17297 of 1998 13 monthly quota. Therefore, it is contended that the 2nd respondent has passed Ext.P12 order without taking into account the orders passed by 1st and 2nd respondents during the said period of power cut in its proper perspective. That apart, along with I.A.No.6585 of 2011, petitioners have produced an order passed by the 2nd respondent dated 07.08.2010 to substantiate the contention that a similarly situated person like the petitioners was given the benefit of the varying Board orders and taking the percentage of base average unit on the basis of such variations made by the Board, evident from Ext.P29. Thus it is also contended that the petitioners are entitled to get similar treatment at the hands of the 2nd respondent. 15. Heard learned Senior Counsel, Sri. S. Ramesh Babu for the petitioners, learned Senior Counsel for the Board, Sri. P. Santhalingam and learned Government Pleader for the 1st respondent, perused the pleadings, documents and the argument notes submitted by the learned counsel for the 2nd respondent. 16. The question to be decided in this case lies in a very narrow compass, as to whether the petitioners are entitled to O.P. No.17297 of 1998 14 get the quota fixed by taking into account the base average of 250 units per KVA proportionately, to calculate the percentage of power which was entitled to be used in accordance with the orders passed by the Board fixing the quota from time to time. On a perusal of Ext.P2, it is clear that HT consumers, after 01.01.1996 were permitted the quota of 250 units per KVA/Contract Maximum Demand (CMD). The total KVA of the petitioners is 1950 each. Therefore, in order to find out the quota of the petitioners, the base average of 250 units is to be multiplied with the total KVA of the petitioners and by doing so, both the petitioners are entitled to get 4,87,500 units of power. The contention of the petitioners is that when 50% power cut is imposed, they are entitled to get half of the units so calculated. Further, if the power cut is varied/reduced from 50% to 30% in accordance with the said calculation, they are entitled to get the units calculated based on the percentage of base average of 250 units, which thus means, when the power cut is reduced to 30%, petitioners are entitled to enjoy 70% of 250 units multiplied by the total KVA of the unit of the petitioners viz. 1950. O.P. No.17297 of 1998 15 17. On the other hand, the Board has contended that they have arrived at the figure of 250 units as the base average by following the formula “Connected load x 24 hours x 30 days x 0.4 load factor = 247 units per KVA, which was rounded to 250 units per KVA”. So far as the calculation made in order to arrive at the base average unit of 250 per KVA or the calculation made thereunder by multiplying with the total KVA of the units of the petitioners are not under dispute. According to the 2nd respondent, the petitioners are not entitled to claim the benefit of the power allocation provided to Pre-1992 tariff or the Industries which had set up prior to 01.01.1996. It is true that the 1st respondent is vested with powers under Sec.22B of the Indian Electricity Act, 1910 to impose power cut to Industries and fixing quota of power allocation accordingly. Therefore, the contention advanced by the Board is that as per Ext.P15 Board order dated 30.07.1996, monthly quota of HT consumers was fixed as 125 units per KVA, as per Ext.P3 irrespective of the varying Board orders issued varying the quota fixed for other units which came into existence prior to 01.01.1996. O.P. No.17297 of 1998 16 18. To counter the said arguments, learned Senior Counsel for the petitioners contended that if the petitioners were given the fixed quota of 125 units per KVA, then the same should have been maintained to the petitioners and other HT consumers which came into existence after 01.01.1996, irrespective of the increase of the power cut from 50% and more and up to 99%. That apart, it is also contended that when power cut was increased, variations were made in proportion to the base average fixed at 250 units per KVA even to the petitioners. Therefore, learned Senior Counsel contended that the theory of the Board that the base average unit of the petitioners were fixed at 125 units per KVA can never be sustained under law. 19. It is also contended by the learned Senior Counsel for the petitioners that even the theory put forth by the Board with regard to the fixed base average of 125 units to HT consumers which came into existence after 01.01.1996 by taking into account Ext.P17 order, the power supply to the petitioners should have been disconnected when it exceeded 50% taking into account 125 units per KVA as the base average. Therefore, it is contended that at no point of time O.P. No.17297 of 1998 17 the power supply to the petitioners were disconnected as threatened in Ext.P17, which is also an indicative factor to show that the intention of the Board was never to have fixed quota base average of 125 units per KVA. I have perused Ext.P12 order passed by the 2nd respondent by which the Board has adopted the stand that as per the Board order dated 30.07.1996, it was ordered that new connection given after 01.01.1996 was granted a quota of 125 units per KVA contracted maximum demand (CMD) per month and is not based on a base average, but the quota thus applies directly against the Contracted Maximum Demand.