High Court of KeralaSingle Judge2014-08-21Writ petition allowed in part: Exts. P10 and P1...

Hotel Mariya, rep. by its partner Mathew Cyriac v. Kerala State Electricity Board

Case / Petition Number:WP(C).No. 17912 of 2007 (G)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: C.K. Abdul Rehim
Judgment Date: 2014-08-21
Court Decision / Holding: Exts. P10 and P12 are quashed. The 2nd respondent is directed to issue a revised bill computing the penalty in accordance with Section 126, which stood in force as on the date of inspection. A personal hearing must be afforded, and the revised bill should be issued as early as possible, within one month of receipt of the judgment. Amounts already remitted shall be appropriated against the revised demand; the petitioner shall have two weeks to pay any balance; if excess has been paid, it shall be refunded within one month. No surcharge/interest will be leviable on the penalty amount; statutory interest, if any, shall be payable from the date of default.
Final Disposition: Writ petition allowed in part: Exts. P10 and P12 quashed; revised penalty bill to be issued under Section 126 in force as on inspection date; hearing to be afforded; no surcharge/interest on penalty; statutory interest if default occurs.

Parties to the Case

Appellants / Petitioners

Hotel Mariya, rep. by its partner Mathew Cyriac

Respondents

Kerala State Electricity Board
The Assistant Executive Engineer, Electrical Major Section, K.S.E. Board, Pala
The Assistant Engineer, Anti Power Theft Squad, Kottayam-12
The Principal Secretary to Government, Power (A) Department, Secretariat, Thiruvananthapuram
Additional Respondent 4 (Addl. R4) – Suo motu impleaded

Legal Representation & Advocates

Counsels for Petitioners

• K. Gopalakrishnan Kurup (Adv.)

Counsels for Respondents

• P.K. Radhika, SC, KSEB; M.A. Abdul Shukoor (Adv.)

Case Synopsis & Summary

Hotel Mariya, a hotel partnership, challenges a penalty imposed by the Kerala State Electricity Board (KSEB) after an inspection for alleged unauthorised electricity usage. A prior writ petition quashed the original penalty notice ( Ext. P7 ) and directed the second respondent to pass fresh orders after giving notice. The subsequent proceedings culminated in Ext. P10, applying penal provisions of the Electricity Act, 2003. The petitioner argues that the relevant penal provisions (Section 126) were not clearly applicable during the interregnum between the appointed day (10 June 2003) and Ext. P11 (23 August 2003), since the Government notification under Section 172(d) purportedly exempted the State from applying those provisions for six months. The respondents contend that Ext. P11 creates a temporary exemption, allowing penalties only for irregularities detected after 10 December 2003, and thus the impugned order is valid. The court recalls constitutional protections under Article 20 and holds that penalties must be governed by the law in force at the time of the offence; citing Pareeth v. Kerala State Electricity Board, it concludes that the penalty must be calculated under Section 126 as in force on detection. Exts. P10 and P12 are quashed; the board is directed to issue a revised bill under Section 126 after a personal hearing, with no surcharge/interest on the penalty.

Provisions of Law Cited

Electricity Act, 2003Section 126Section 172(d)Regulation 42 of the Conditions of Supply of Electrical EnergyRegulation 43 of the Conditions of Supply of Electrical EnergyArticle 20 of the Constitution

Legal Doctrines & Maxims

Penal provisions must operate prospectively under Article 20 of the Constitution
Penalties must be determined by the law in force at the time the offence occurred
Pareeth v. Kerala State Electricity Board (2014 (2) KLT 258) – penalty determined with reference to law in force at the time of offence

Submissions & Arguments

Contentions of Appellants / Petitioners

Petitioner contends that the Electricity Act, 2003 came into force on 10 June 2003 (appointed day). Section 172(d) allows a six-month non-applicability via notification, but such notification cannot be retroactive. Because the alleged irregularity was detected during 10 June–23 August 2003, penalties should be under Section 126 as it stood on that date, and not under regulations 42/43. The notification Ext. P11 cannot extend retroactively and constitutional safeguards under Article 20 restrict retroactive penal action. A Division Bench decision in Pareeth v. KSEB supports determining penalties by the law in force at the time of the offence.

Contentions of Respondents

Respondents submit that Ext. P11 declares non-applicability of the 2003 Act provisions for six months; therefore Section 126 applies only to offences detected after 10 December 2003, rendering Exts. P10 and P12 valid. They rely on the notification under Section 172(d) to justify non-application and argue that Article 20’s restrictions permit such non-retroactive application; the contentions are that the penalty should be computed under the law in force after the appointed day.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Pareeth vs. Kerala State Electricity Board	2014 (2) KLT 258	Positive	Pareneth is cited to establish that penalties must be determined by the law in force at the time of the offence, guiding the revision of penalty under Section 126 as of the date of detection.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM** **THURSDAY, THE 21ST DAY OF AUGUST 2014/30TH SRAVANA, 1936** ## **WP(C).No. 17912 of 2007 (G)** **----------------------------** ## **PETITIONER(S):** **--------------------------** **HOTEL MARIYA, REP. BY IT'S PARTNER, MATHEW CYRIAC, VELLIAPPALLIL BUILDINGS, PALA, (RESIDING AT AIKKARA VEEDU, NEEZHURKARA, PULIYANNOOR, MUTHOLY P.O.)** ## **BY ADV. SRI.K.GOPALAKRISHNA KURUP.** ## **RESPONDENT(S):** - **----------------------------** **1. KERALA STATE ELECTRICITY BOARD, REP. BY IT'S SECRETARY, K.S.E. BOARD, VYDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM.** **2. THE ASSISTANT EXECUTIVE ENGINEER, ELECTRICAL MAJOR SECTION, K.S.E. BOARD, PALA.** **3. THE ASSISTANT ENGINEER, ANTI POWER THEFT SQUAD, KOTTAYAM-12.** - **ADDL. R4 IMPLEADED** **4. THE PRINCIPAL SECRETARY TO GOVERNMENT, POWER (A) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM.** *** IS SUO MOTU IMPLEADED AS ADDL. R4 AS PER ORDER DATED 25/09/2007 IN WP(C).** **R1 TO R3 BY ADV. SMT.P.K. RADHIKA, SC, KSEB. ADDL. R4 BY GOVT. PLEADER SRI. M.A.ABDUL SHUKOOR.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **rs.** ## **WP(C).No. 17912 of 2007 (G)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** **EXT.P1 COPY OF THE STATEMENT SHOWING THE CHARGES PAID BY THE PETITIONER FOR THE PERIOD FROM NOVEMBER 2000 TO JUNE 2003.** **EXT.P2 COPY OF THE MAHAZAR PREPARED AT THE TIME OF INSPECTION HELD ON 10/07/2000 IN THE PETITIONER'S PREMISES.** - **EXT.P3 COPY OF THE MAHAZAR PREPARED BY THE ASSISTANT ELECTRICAL INSPECTOR, KOTTAYAM ON 03/11/2000 AT THE TIME OF SEIZURE OF THE METER.** - **EXT.P4 COPY OF THE TEST REPORT.** - **EXT.P5 COPY OF THE RECEIPT DATED 26/06/2002.** **EXT.P6 COPY OF THE MAHAZAR PREPARED AT THE TIME OF INSPECTION DATED 23/07/2003.** **EXT.P7 COPY OF THE LETTER CALCULATION SHEET AND THE PENAL BILL DEMANDING Rs.6,38,072/-.** - **EXT.P8 COPY OF THE LETTER ADDRESSED TO THE SUB INSPECTOR OF POLICE AND THE COPY OF THE FIR NO.403/2003 OF PALA POLICE STATION.** - **EXT.P9 COPY OF THE JUDGMENT DATED 18/12/2006 IN WP(C).NO. 26537/2003.** - **EXT.P10 COPY OF THE ORDER DATED 24/05/2007.** **EXT.P11 COPY OF THE NOTIFICATION DATED 23/08/2003 OF THE GOVERNMENT OF KERALA.** - **EXT.P12 COPY OF THE DEMAND NOTICE DATED 01/06/2007 FOR THE PENAL CHARGES.** ## **RESPONDENT'S EXHIBITS:-** **NIL.** ## **//TRUE COPY//** ## **P.S. TO JUDGE** **rs.** C:R: C.K.ABDUL REHIM,J. ------------------------------WP(C).NO. 17912 of 2007 --------------------------------Dated this the 21st day of August, 2014 JUDGMENT The petitioner is a partnership firm running a Hotel which is provided with an electric connection under respondents 1 to 3, with Consumer No.6964. Pursuant to an inspection conducted at the premises where the electric connection is provided, penalty was imposed against the petitioner as per Ext.P7, demanding a sum of Rs.6,38,072. The imposition of penalty was challenged before this court in an earlier writ petition filed, inter alia contending that the cause of action for the imposition of penalty had occurred after enforcement of the Electricity Act, 2003 and hence the imposition of penalty can only be under section 126 of the said Act. This court had quashed Ext.P7 and directed the 2[nd] respondent herein to pass fresh orders, with notice to the petitioner. Accordingly the matter was reconsidered by the 2[nd] respondent with opportunity afforded to the petitioner and WPC.No. 17912 /2014 2 Ext.P10 order was issued. The contentions regarding applicability of section 126 of the Electricity Act 2003 was repelled in the light of Ext.P11 Notification issued by the State Government in exercise of power vested under section 172 of the said Act. It is challenging Ext.P10 as well as Ext.P12 consequential demand, this writ petition is filed. 2. Contention of the petitioner is that the Electricity Act 2003 was brought into force in the country with effect from 10.6.2003, which is the 'appointed day'. Section 172 (d) of the Act provides that the State Government may by notification declare that any or all the provisions contained in the said Act shall not apply in the State for such period, not exceeding 6 months from the appointed day, as may be stipulated in the notification. Contention is that, even assuming that Ext.P11 is a Notification issued in exercise of power vested under section 172 (d), the same cannot have any retrospective effect. Since Ext.P11 Notification was issued only on 23.8.2003, provisions of the Electricity Act 2003 is to be deemed as existing in force between 10.6.2003 and 23.8.2003. Since the detection of the WPC.No. 17912 /2014 3 alleged irregularity as well as the imposition of penalty was within the said period, it should have been made only in accordance with section 126 of the Electricity Act 2003. Since Section 126, as it stood then, permits imposition of penalty only at 1 ½ times for a maximum period of 6 months, the penalty now imposed at a higher rate under regulation 42 and 43 of the Conditions of Supply of Electrical Energy is not sustainable. 3. In the counter affidavit of the respondents it is contended that, by virtue of Ext.P11 notification the provisions of Electricity Act 2003 was not made applicable with respect to State of Kerala for a period of 6 months from the appointed day. Hence section 126 can be applied only for irregularities detected after 10.12.2003. Therefore the impugned order of penalty is valid, is the contention. 4. Question arises as to whether Ext.P11 notification could have any retrospectivity. It remains settled that any legal provision having penal effect can be statutorily introduced only on a prospective basis, because of the constitutional restrictions contained under Article 20. Since provisions of the Electricity Act WPC.No. 17912 /2014 4 2003 was brought into force with effect from the 'appointed day' of 10.6.2003, operation of section 126 from the said date onwards is explicit. The provisions of 2003 Act can be declared as not applicable within the State only by virtue of a notification issued under section 172(d). Since such declaration was issued only on 23.8.2003, it is evident that section 126 was in force at the time when the offence/unauthorised usage was detected. Hence this court finds merit in the contention that the penalisation can be made only under section 126 of the Electricity Act 2003. A Division Bench of this court in the decision in **Pareeth vs. Kerala State Electricity Board (2014 (2) KLT 258)** held that the penalty that will visit upon an offender is determined with reference to the law that prevailed at the time when the offence is committed. Therefore the impugned proceedings needs interference to the extent of revising the penal bill in accordance with provisions contained in section 126. 5. Under the above mentioned circumstances Exts.P10 and P12 are hereby quashed. The 2[nd] respondent is directed to issue revised bill computing the penalty in accordance with WPC.No. 17912 /2014 5 section 126, which stood in force as on the date of inspection. Revised bill in this regard shall be issued if necessary after affording opportunity of personal hearing to the petitioner, at the earliest possible, at any rate within a period of one month from the date of receipt of a copy of this judgment. 6. The amounts already remitted by the petitioner shall be appropriated against the revised demand. The petitioner shall be given 2 weeks time for payment of balance if any found due, from the date of service of such revised bill. On the other hand, if there is excess payment it shall be adjusted/refunded within a period of one month of the date of issuance of the revised bill. 7. It is made clear that, since the impugned order of penalty is quashed and the respondent are directed to issue revised bill, no surcharge/interest will be leviable on the amount of penalty. But statutory interest will be leviable from the date stipulated for payment if there is any default. ## C.K.ABDUL REHIM, JUDGE pmn/ WPC.No. 17912 /2014 6 WPC.No. 17912 /2014 7