IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 12TH NOVEMBER 2010 / 21ST KARTHIKA 1932 WP(C).No. 36750 of 2009(K) -------------------------- PETITIONER: --------------- BELL FOODS MARINE DIVISION, (OLD INTERNATIONAL MERCHANDISING CO.), CONSUMER NO. 5562012511, PALLICHAL ROAD, COCHIN-5, REPRESENTED BY ITS PROPRIETOR VIKRAMAN. BY ADV. SRI.BLAZE K.JOSE RESPONDENTS: --------------- 1. KERALA STATE ELECTRICITY BOARD, VYDHUTHI BHAWAN, PATTAM, THIRUVANANTHAPURAM, REPRESENTED BY ITS CHAIRMAN. 2. ASSISTANT ENGINEER, ELECTRICAL SECTION, KERALA STATE ELECTRICITY BOARD, THOPPUMPADY, KOCHI. 3. THE CONSUMER GRIEVANCES REDRESSAL FORUM (KSEB), CENTRAL REGION, POWER HOUSE, ERNAKULAM NORTH P.O., COCHIN-18. 4. THE STATE ELECTRICITY OMBUDSMAN, THAANATH BUILDING, CLUB JUNCTION, PUKKATTUPADI ROAD, EDAPPALLY TOLL, KOCHI-24. R1 TO R3 BY ADV. SRI.P.P.THAJUDEEN, SC, K.S.E.B SRI.C.K.KARUNAKARAN, SC , KSEB THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 36750 of 2009(K) APPENDIX PETITIONER'S EXHIBITS: EXT. P1 : A TRUE COPY OF THE CORPORATION LICENCE DATED 24.04.2008 EXT.P2 : A TRUE COPY OF THE FACTORY LICENSE DATED 02.12.2004. EXT.P3 : A TRUE COPY OF THE CERTIFICATE OF APPROVAL OF EXPORT INSPECTION COUNCIL OF INDIA DATED 31.03.2008. EXT.P4 : A TRUE COPY OF THE CERTIFICATE OF REGISTRATION OF PROCESSING PLANT OF MPEDA DATED 20.07.1995. EXT.P5 : A TRUE COPY OF THE ORDER IN DP.39 OF 2008 AND CONNECTED CASES DATED 29.08.2008 OF THE KSERC. EXT.P6 : A TRUE COPY OF THE INTERIM ORDER IN COMPLAINT NO. 66 OF 2008 DATED 25.11.2008 OF THE CGRF/3RD RESPONDENT. EXT.P7 : A TRUE COPY OF THE ORDER IN CLARIFICATION PETITION 1/2008 IN DP.No.39/08 DATED 23.04.2009 OF THE KSERC. EXT.P8 : A TRUE COPY OF THE ORDER IN COMPLAINT NO.66 OF 2008 DATED 11.05.2009 OF THE CGRF, ( ELECTRICITY)ERNAKULAM. EXT.P9 : A TRUE COPY OF THE LETTER DATED 12.05.2009 AND THE SHORT ASSESSMENT ISSUED BY THE KSEB. EXT.P10 : A TRUE COPY OF THE BILL DATED 12.05.2009 FOR THE CONSUMER NO.12511. EXT.P11 : A TRUE COPY OF THE COUNTER STATEMENT SCENE MAHASSAR AND CONNECTED RECORDS DATED 29.06.2009 FILED BY THE 2ND RESPONDENT. EXT.P12 : A TRUE COPY OF THE REPLY STATEMENT. EXT.P13 : A TRUE COPY OF THE APPLICATION AND SANCTION IN PERFORMA WITH CONNECTED DOCUMENTS. EXT.P14 : A TRUE COPY OF THE SSI REGISTRATION DATED 01.03.1993 EXT.P15 : A TRUE COPY OF THE INITIAL PROCEEDINGS FOR CONNECTION INSTALLATION AND POWER ALLOCATION. EXT.P16 : A TRUE COPY OF THE ORDER DATED 21.08.2009 OF THE HON'BLE ELECTRICITY OMBUDSMAN. EXT.P17 : A TRUE COPY OF THE ROUGH PLAN OF THE PETITIONERS INDUSTRIAL UNIT. WP(C).No. 36750 of 2009(K) RESPONDENTS' EXHIBITS: EXT.R2(a) : PHOTOCOPY OF THE COMPLAINT DATED 22.11.2008 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXT.R2(b) : PHOTOCOPY OF THE RELEVANT PAGE OF CONNECTED LOAD STATEMENT IN R ESPECT OF PETITIONER'S PREMISES. / T RUE COPY/ P.S. TO JUDGE. P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C) No. 36750 OF 2009 ......................................................................... Dated this the 12th November , 2010 J U D G M E N T Whether the petitioner's connection bearing No. 5562012511 given by the Kerala State Electricity Board is liable to be included under the LT VII (A) commercial tariff- allegedly being a 'cold storage' or whether it is to be included under the LT IVA Industrial category- as applicable for a 'processing unit', attached with cold storage as contended by the petitioner, is the crucial point to be considered and decided in this case. 2. The sequence of events as narrated in the Writ Petition shows that the petitioner is a firm, stated as involved in the sea food processing and export, running the business under the name and style as Bell Foods, who started the activities in the year 1970, obtaining an electric connection with the consumer No.5562007952, under LT IV Industrial category. While so, the petitioner started another unit under the name M/s.International Merchandising Company, in the very W.P.(C) No. 36750 OF 2009 2 same compound with a larger cold storage as per the standards prescribed by the European Union and a separate connection was obtained as consumer No.5562012511. By virtue of the activities being pursued and the relevant norms for categorisation and tariff, then in existence, both the said connections stood classified as 'Industrial category' till 30th November 2007. 3. In the meanwhile, the Regulatory Commission brought out a 'Tariff Revision' w.e.f. 01.12.2007, whereby the cold storages were brought within the category of 'Commercial' connection under LT VIIA. Aggrieved of the said decision, the petitioner and several other similarly situated persons had challenged the same by filing Writ Petitions before this Court stating that they were doing the operations making use of the cold storage in the very same or nearby premises, particularly in view of the inadequacy of space in the existing locations, and since the 'cold storage' formed an integral part of the process of manufacture of 'Sea Foods', the same could not be segregated and that there was no rationale for having re-classified the units as 'cold storages' to attract a higher tariff. This Court directed W.P.(C) No. 36750 OF 2009 3 the matter to be considered by the Commission, pursuant to which, all the parties were heard, leading to Ext.P5 order passed by the Commission on 29.08.2008, which admittedly has become final. 4. As per Ext.P5, it was observed by the Commission that the industries like 'prawn peeling units' still continued to be classified and categorised as industrial units, where the processing activity was of minimal nature and the larger part was with regard to the storage element. Similarly, the reference made to the status of 'Ice cream' units as relied on by the petitioner was also referred to. After analysing the facts and figures, the Commission held that the 'processing unit' was very much entitled to be classified and categorised as LT IV industrial units and that the freezing and cold storage activity would stand billed under LT VII A Commercial, as mentioned in the Tariff Order 2007. 5. In the course of further steps followed, being aggrieved of the bills raised by the Electricity Board, still classifying the Unit of the petitioner having consumer No.5562012511 as in the W.P.(C) No. 36750 OF 2009 4 Commercial LT VII A category, the petitioner approached the third respondent /Consumer Grievance Redressal Forum. After considering the grievance projected, the Forum observed that the matter required to be clarified at the hands of the Commission, pursuant to which, a clarification petition was filed before the Commission in this regard. 6. The matter was again considered by the Commission and referring to the various aspects, it was made clear that there was absolutely no obscurity in the order passed by the Commission, however, alerting the third respondent/Grievance Forum of its duty in accordance with the relevant provisions of law, and deprecating the cause, trying to shift the matter to be clarified by the Commission. It was reiterated by the Commission, as per Ext.P7 order, that the processing units shall be billed under LT IV Industrial category and that the consumers engaged in the freezing and cold storage activity shall be billed under LT VII A Commercial, as mentioned in the 'Tariff Order 2007'. It was still made clear that, if a separate connection was taken for the purpose of cold storage/freezing, it shall be deemed to be billed W.P.(C) No. 36750 OF 2009 5 under LT-VII(A) Commercial. With the said observations, the petition for clarification was dismissed. Ext.P7 has become final, as no further challenge has been raised by the petitioner in this regard. As such, the question to be considered is whether the petitioner had taken a separate connection for the purpose of cold storage/freezing units in respect of the consumer No. 5562012511. 7. Coming to further developments, it is seen that the petitioner had preferred a complaint before the 3rd respondent against the bill dated 15.11.2008 issued under LT VIIA Commercial tariff, on 25.11.2008, wherein it was contended that the petitioner was having a processing plant and a cold storage unit in the very same compound having Consumer Nos.5562007952 and 5562012511 respectively. It was categorically stated therein that the unit was a “single unit” in the very same compound, but having only two different door numbers and two different electrical connections and hence was liable to be billed only under 'LT IVA Industrial' rate. 8. The matter was considered by the third W.P.(C) No. 36750 OF 2009 6 respondent/Consumer Grievance Redressal Forum and observed that the Commission had already made it clear that, if a separate connection was taken for the purpose of storage/freezing, it shall be deemed to be billed under LT VIIA Commercial. Observing that, by virtue of the admitted or undisputed fact as stated in the complaint that the connection with consumer No.5562007952 was a 'processing unit'; while the connection with Consumer No.5562012511 was a 'cold storage' though situated in the same premises, it was held that the 'connection given' in respect of Consumer No. 12511 was for a 'cold storage' and as such, it was liable to be billed under LT VIIA Commercial, as borne by Ext. P8 order dated 11.05.2009. 9. Challenging Ext.P8 order passed by the third respondent, the petitioner preferred an appeal before the 4th respondent/ Ombudsman. The case projected before the Ombudsman was entirely different from the case projected before the third respondent/CGRF, as taken note of in the relevant proceedings . It was contended by the petitioner before the Ombudsman, that the petitioner was also running a W.P.(C) No. 36750 OF 2009 7 processing unit in connection with the Consumer No.5562012511 and was making use of the cold storage for storing the products manufactured. It was the further contention of the petitioner that the petitioner did never procure any product from elsewhere and was only storing the product manufactured by the petitioner himself. Reference and reliance was also placed to the contention that, even though the unit was having a separate name as 'International Merchandising Company' as revealed from the SSI registration certificate, Factory licence and such other materials with separate electricity connection as consumer No.5562012511, the said unit subsequently got merged with the original unit and it was being run as 'Bell Foods (Marine Division)' as in the present form, with a common balance sheet and profit and loss accounts . In the said circumstances, it was contended that the activity of the unit having the consumer No.5562012511 was not liable to be segregated, to be treated as a freezing plant and cold storage alone, to be classified as LT VIIA Commercial category. 10. In response to the contentions raised by the petitioner, W.P.(C) No. 36750 OF 2009 8 the first and second respondents filed a detailed reply statement rebutting the averments and allegations with reference to the material particulars. After considering all the relevant records, the 4th respondent/Ombudsman passed Ext. P16 order observing that the case projected by the petitioner in the appeal was entirely different from the case projected before the third respondent/CGRF. By virtue of the admission already made by the petitioner including the contents of the letter dated 22.11.2008 sent by the petitioner to the concerned Assistant Engineer ( which has been produced and marked as Ext. R2(a) along with the counter affidavit filed by the respondents 1 to 3 in this Writ Petition) and such other glaring inconsistencies brought to light, it was observed that the connection obtained by the petitioner under Consumer No.5562012511 was only for the purpose of 'freezing plant and cold storage' and that the factual position as above stood also conceded from the part of the petitioner in the course of inspection conducted and also as borne by the mahazar prepared in this regard. The petitioner challenges the correctness and sustainability of Ext.P8 and W.P.(C) No. 36750 OF 2009 9 Ext.P16 orders passed by the 3rd and 4th respondents respectively and also Ext. P9 consequential proceedings and bills raised by the Board, based on the categorisation under LT VII(A) , however stating that the petitioner is continuing to remit the amounts under LT VII(A) Commercial, 'under protest' and subject to the outcome of the Writ Petition. 11. As mentioned herein before, respondents 1 to 3 have filed a counter affidavit asserting the stand already taken before the various statutory authorities including the 4th respondent and explaining the diametrically opposite stand being taken by the petitioner, blowing hot and cold simultaneously. Referring to the admitted facts with reference to Ext.R2(a) and such other vital points, it is contended that the Writ Petition is devoid of any merit and no interference is called for. 12. Heard both the sides in detail. 13. As noted above, the grievance of the petitioner is in respect of the action of the KSEB in treating the consumer No.5562012511 of the petitioner as a 'cold storage' and placing it under LT VII(A) Commercial category, instead of LT IV W.P.(C) No. 36750 OF 2009 10 Industrial category. Reliance is sought to be placed on the findings and the observations made by the Regulatory Commission in Exts. P5 and P7 holding that sea food processing units are entitled to be classified and categorised under LT IV Industrial category and not under LT VII (A) Commercial category. Referring to the nature of the operations, the petitioner also contends that the said unit was started only in the year 1993 and that all the operations attached to the 'processing unit' are very much available there as well. It is asserted that 'cold storage' is only a part of the processing activity, as the life of the seafood product manufactured by the petitioner, if not kept in the cold storage, is only for a period of 'three hours' after the production in the normal temperature. As such, the course pursued by the authorities of the Board and the rejection of the complaint preferred before the third respondent/ CGRF as per Ext. P8, followed by the rejection of the appeal by the 4th respondent/Ombudsman as per Ext.P16 are sought to be interfered. 14. Going by the contents of Exts.P5 and P7 orders passed W.P.(C) No. 36750 OF 2009 11 by the Regulatory Commission, it has been made clear, particularly in Ext.P7, that 'processing units' are liable to be treated as LT IV Industrial category and that if the connection was separately taken for a cold storage, it was liable to be treated only under LT VII (A) Commercial category. The finding of the Regulatory Commission is not under challenge in the Writ Petition and as such, the question to be considered is whether the connection applied for, by the petitioner in respect of the second unit ie., M/s. International Merchandising Company was for starting a 'processing unit' or for the purpose of a 'cold storage'. 15. As obvious from the admitted pleadings and proceedings, it is the specific case of the petitioner that the second unit started in the year 1993, run under the name and style as M/s. International Merchandising Company, was subsequently merged with the existing firm 'Bell Foods' and is being run as Bell Foods (Marine) after the merger. It is also conceded that after the merger, it is a single unit having a single balance sheet and statement of accounts (paragraphs 2,18, 24 W.P.(C) No. 36750 OF 2009 12 and elsewhere). However, it is stated that the act of obtaining t two different connections is not a bar under the relevant provisions of law,, more so, when they are having separate door numbers- though situated in the very same compound . 16. In this connection, it is relevant to note that the case projected by the petitioner earlier was something else, as evident from Ext. R2(a) letter dated 22.11.2008 written by the petitioner to the second respondent. It was contended by the petitioner in the following lines: “We are having a processing plant and cold storage in very same premises in a compound at Pallichal Road Kochi and is having separate LT connection as Consumer No.5562007952 for the processing plant and Consumer No.5562012511 for the cold storage. The unit is a single unit in very same compound, but have only two different door numbers and 2 different connections. “ Referring to the separate connections provided to the processing unit and the separate cold storage, it was pointed out by the W.P.(C) No. 36750 OF 2009 13 petitioner earlier that the aforesaid cold storage was not liable to be treated as a separate unit and was an integral part of the processing unit situated in the same compound. It was accordingly, that the unit was sought to be billed under LT IV Industrial category, so as to take it outside the purview of the Tariff Revision Order. 17. When the bills were raised by the authorities of the Board under LT VII(A) Commercial category in respect of the consumer No.5562012511 as referred to already, the petitioner approached the third respondent/CGRF with a similar complaint stating that the cold storage was an integral part of the processing unit , though two separate connections had been applied for and obtained. The said contention was repelled by the third respondent, who passed Ext.P8 order referring to the mandate given by the Regulatory Commission in Exts. P5 and P7 to have the unit billed under LT VII(A ) Commercial category alone, which made the petitioner to pursue the matter by filing appeal before the Ombudsman/4th respondent, leading to Ext.P16 order dismissing the appeal. W.P.(C) No. 36750 OF 2009 14 18. As borne by Ext.P16, the Ombudsman observed that the contention of the respondents that the Consumer No.5562012511 was given exclusively to M/s. International Merchandising Company on 02.04.1994 for running the 'cold storage unit' in a portion of the building 18/1553 was not contradicted by the appellant/petitioner. It has also been observed that the 'wiring plan' produced by the respondent Board (as furnished by the appellant/petitioner in connection with the application for additional load) revealed that there were two 'cold storage rooms' and one 'machine room' in the plan, while no processing hall or similar provision was there, as being connected from the said service. Specific reference was also made to Annexure R2(a) letter dated 22.11.2008 written by the petitioner/appellant to the second respondent, referring to the separate connections obtained to the processing unit and the cold storage respectively. Similar observation was also made with respect to the contents of the complaint dated 24.11.2008 preferred before the third respondent /CGRF . It was after referring to the above crystal clear admissions, that the W.P.(C) No. 36750 OF 2009 15 Ombudsman observed in paragraph No. 9 as follows: “ The Appellant now claims that they have sea food processing activities also in the premises of the cons.No.12511. They have every right to commence such activities in this connection also since it is conceived as separate 'premises' with independent door number. As per the Supply code 2005 Amendment IV, 'premises include any land building, structure or part of it, situated in an immovable property, details of which have been specified in the applications or agreements prescribed for grant of electric connection'. But the Company will have to stop the present practice of running both units as an 'integrated' entity and to keep the activities of both connections separate in all respects; separated functionally, electrically and both units keeping separate and independent records of all transactions. If the Appellant completes all the above formalities, obtain approval from the concerned statutory authorities and approaches the Respondent with necessary installation modification documents to the satisfaction of W.P.(C) No. 36750 OF 2009 16 the respondent, the Respondent shall allocate LT IV tariff to the connection. Until then the applicable tariff shall continue to be LT VII A. 19. The attempt of the petitioner in the Writ Petition is to project a different picture, trying to contend that the consumer No.12511 sought for and obtained, was not exclusively for a 'cold storage', (as contended by the Board and accepted by the third and fourth respondents), but was for a 'processing unit' as well, which is stated as in existence in the unit, interconnected with the premises having the other connection with consumer No.7952 . It is stated that the Board omitted to note the processing hall situated in the first floor( also not shown in the Mahazar), however conceding that the Mahazar bears the signature of the petitioner. Reliance is also sought to be placed on the various licences and other documents, more particularly Ext.P15 Certificate of Registration of the 'undertaking' as an SSI unit, to show that it is a manufacturing unit. 20. True, Ext.P14 is a certificate dated 20.07.1993 issued in favour of the second unit of the petitioner, originally run in the W.P.(C) No. 36750 OF 2009 17 name and style as M/s. International Merchandising Company showing the door number. It is also true that the products manufactured are shown therein as 'Frozen squid, Frozen cuttle fish, Frozen fish and Frozen shrimps'. Prima facie, it may appear, that by virtue of the nature of the products manufactured (as given in Ext. P4 Certificate of Permanent Registration as an SSI unit) that the said unit is pursing a manufacturing activity as contended by the petitioner. But on a closer scrutiny, it is relevant to note that the RAW MATERIALS used by the petitioner are also given in the very same Certificate as follows: “Processed squid, processed cuttle fish, processed fish, processed shrimps, packing materials . From the above, it is very much evident that the 'raw materials' procured by the petitioner are not various sea food items to be subjected to various processing activities such as washing the same, icing, beheading, peeling, de-veining, grading, filth W.P.(C) No. 36750 OF 2009 18 washing, stuffing, filling in trays, freezing, glazing, packing and thereafter storing in cold storage for the purpose of exporting, as contended in paragraph 4 of the Writ Petition. On the other hand, the petitioner is procuring the already processed sea foods, which are shown as raw materials, which themselves have been shown as the 'products manufactured'. 21. In the above facts and circumstances, it can only be concluded that the activity that was being pursued by the petitioner at the time of applying for the connection and obtaining Ext.P14 SSI certificate, was never in respect of a 'processing unit' and the connection was sought for and obtained only for a 'cold storage'. This is more so evident from the categoric 'admission' made by the petitioner himself in Ext. R2 (a) letter dated 22.11.2008 addressed to the second respondent pointing out that the two different connections have been obtained for the ' processing unit ' and the ' cold storage unit ' separately while contending that the 'cold storage', being an integral part of the processing unit and situated in the very same compound, was not liable to be treated separately to be billed W.P.(C) No. 36750 OF 2009 19 under LT VII A Commercial category. 22. Incidentally, it is relevant to note that the contention raised from the part of the Board, as stated in paragraph 11 of the counter affidavit is that the petitioner deliberately availed two separate services/connections to eliminate the requirement of availing 'HT' service, as the total sanctioned load of both the services is 212 KW (109 + 103), which is far above the limit of 'LT' service. It is still more relevant, to note the version of the petitioner as given in paragraph No.19 of Ext.P12 reply statement dated 01.08.2009 filed before the 4th respondent/Ombudsman, conceding that, without prejudice to the contentions, the petitioner is ready to club the connections and convert the same as 'HT' connection 23. From the above, it is evident that the petitioner does not have a consistent case at all and that the case now projected by the petitioner, that consumer No.5562012511 is a 'processing unit' as well and that the separate connection was applied for and obtained in respect of such unit as a 'processing unit' is devoid of any element of merit or bonafides. This is more W.P.(C) No. 36750 OF 2009 20 so, since the