Kerala State Electricity Board Ltd. v. Kerala State Electricity Appellate Authority and Others

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH ``` ``` TUESDAY, THE 28[TH] DAY OF MAY 2024 / 7TH JYAISHTA, 1946 ``` # **`WP(C) NO. 8072 OF 2020`** ## **`PETITIONER:`** ``` KERALA STATE ELECTRICITY BOARD LTD., VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY. ``` ``` BY ADV. SRI. B. PREMOD ``` ## **`RESPONDENTS:`** - **`1 THE KERALA STATE ELECTRICITY APPELLATE AUTHORITY (CONSTITUTED UNDER SECTION 127 OF THE ELECTRICITY ACT 2003), CC 51/52, NEAR 110 KV SUB STATION, VYTTILA, KOCHI – 682019.`** - **`2 THE ASSESSING OFFICER (ASSISTANT ENGINEER), ELECTRICAL SECTION, KSEBL MUDAPPALLUR, PALAKKAD DISTRICT- 678014.`** - **`3 K. P. SIYAD, M/S. GR TIMBER AND SAW MILL, IX/247B, PANTHAPARAMBU, MUDAPPALLUR P. O., PALAKKAD DISTRICT – 675705.`** ## **`THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON`** ``` 28.05.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 8072 OF 2020 ``` ``` 2 ``` ## **DINESH KUMAR SINGH, J.** -------------------------- ## **W.P.(C) No. 8072 of 2020** ------------------------- Dated this the 28[th] day of May, 2024 ## **JUDGMENT** 1. Despite service of notice as per office report dated 01.09.2021 on the 3[rd] respondent, no one has put in appearance on behalf of the 3[rd] respondent. 2. The present writ petition has been filed by the KSEB impugning the Order dated 04.11.2017 passed by the Kerala State Electricity Appellate Authority constituted under Section 127 of the Electricity Act, 2003 (hereinafter referred to as the ‘Electricity Act’ for short) in appeal No. 219/2017. 3. The 3[rd] respondent, a consumer was given LT IV A industrial tariff with a sanctioned connected load of 77.875 KW and contract demand of 87 KVA. This electricity connection was meant to run a saw mill in the name and style of “G. R. Timbers & Saw Mill”. The energy charges were to be collected under LT IV A, industrial tariff. Anti Power Theft Squad (APTS), Palakkad unit of KSEB Ltd. along with the officials of Electrical Section conducted a surprise inspection at the premises of the 3[rd] respondent on 08.06.2017. Site mahazar was prepared by the ``` WP(C) NO. 8072 OF 2020 ``` ``` 3 ``` Assistant Engineer and provisional assessment of Rs. 9,33,276/was issued to the 3[rd] respondent on 12.06.2017. The allegation against the 3[rd] respondent that, he had connected unauthorised additional load of 89.783 KW over and above the sanctioned load of 77.875 KW. The provisional assessment was confirmed by the final assessment order dated 10.07.2017. 4. The 3[rd] respondent approached this Court by filing W.P.(C) No. 25716 of 2017 (L). However, this Court vide Judgment and Order dated 03.08.2017 directed the 3[rd] respondent to file appeal before the appellate authority under the provisions of Section 127 of the Electricity Act. The 3[rd] respondent was directed to remit only 50% of the fixed charges of the assessment of the total assessed amount. 5. In view of the liberty granted by this Court, the 3[rd] respondent filed appeal No. 219/2017 before the Electricity Appellate Authority. The Electricity Appellate Authority considering the provisions of Section 126 of the Electricity Act and Regulation 153 (15) of Kerala Electricity Supply Code 2014 as well as Judgment of this Court in _**Executive Engineer & Another v. M/s. Sri Seetaram Rice Mill [2011 STPL (Web) 942 SC]**_ held that the assessment in cases where usage of electricity ``` WP(C) NO. 8072 OF 2020 ``` ``` 4 ``` was deducted to be completed twice the amount for the fixed charges only. The appellate authority while coming to the said conclusion has made the following observations; “The above judgment made it clear that the assessment under Section 126 of the 2003 Act for the UAL detected shall be made at twice the rate under applicable tariff for the fixed charges only and not for the energy charges unless regularisation of such UAL or enhancement of contract demand necessitates upgradation of the existing distribution system or enhancement of voltage level of supply. In the case at hand, as the UAL of 89.783 KW has been found used for the functioning of the same industrial unit, the tariff applicable for the assessment is LT IV A industrial. The appellant had connected UAL of 89.783 KW over and above the sanctioned load, resulting in a total load of 167.658 KW, with the maximum demand recorded in the premises 91.6 KVA. As per Regulation 11 (1) of the Kerala Electricity Supply Code 2014, the maximum contract demand permissible for low tension consumer who avails power under demand based metering shall be 100 KVA, irrespective of his connected load. Hence it is observed that regularisation of the UAL with a ``` WP(C) NO. 8072 OF 2020 ``` ``` 5 ``` maximum contract demand of 91.6 KVA, in the premises of LT consumer number 7719 does not necessitate any enhancement of voltage level of supply. But the respondent argued that to regularise the unauthorised additional load the existing 100 KVA transformer has to be enhanced to 160 KVA and hence an upgradation of the distribution system is required. The respondent argued that the actual maximum demand in the premises is not recorded in the meter as it is of 30 minutes time integration type and the load of shorter duration do escape from recording and hence the recorded maximum demand of 91.6 KVA was not the actual demand occurred in the premises. The respondent further argued that the failure of the 100 KVA transformer, exclusively feeding this premises, on 05.06.2017 and also the frequent blowing off the drop out fuses of the transformer were due to that excess loading. But it is observed that the maximum demand has been defined vide Regulation 2(56) of Supply Code 2014 as “maximum demand” means the highest average load measured in KVA or KW at the point of supply of a consumer during a consecutive period of thirty minutes or such other consecutive period as specified by the Commission; during the billing ``` WP(C) NO. 8072 OF 2020 ``` ``` 6 ``` cycle.’ In this circumstances the considered view of the Authority is that there is no relenence in the argument of the respondent that the maximum demand recorded in the meter with 30 minutes integration was not the actual maximum demand. The respondent has failed to establish that the 100 KVA transformer (exclusively feeding the premises) has to be enhanced to 160 KVA for regularising the UAL with a maximum contract demand of 91.6 KVA. Hence the neccessity for any upgradation of the existing distribution system to regularise the UAL could not been proved by the respondent. In this circumstance, the Authority is of the view that the assessment under Section 126 of 2003 Act for the UAL detected shall be made at twice the rate under LT IV A, industrial tariff for the fixed charges only and not for the energy charges. The assessment may be revised accordingly. Since the period of unauthorised use has not been ascertained, the same shall be limited to twelve months immediately preceding the date of inspection by virtue of Section 126 (5) of the 2003 Act.” 6. The appellate authority set aside the final assessment and directed the assessing authority to revise the assessment within ``` WP(C) NO. 8072 OF 2020 ``` ``` 7 ``` a period of fifteen days at twice the rate under LT IV A tariff for the fixed charges only on account of the unauthorised additional load (UAL) of 89.783 KW, for a period of twelve months prior to the date of inspection. 7. As can be seen from the extracted part of the Order of the appellate authority, the appellate authority placed reliance on the Judgment of this Court in W.P.(C) No. 6993 of 2013. 8. The learned Counsel for the petitioner Board has submitted that the said Judgment has been overruled by the Supreme Court in the case of _**Kerala Electricity Board vs. Thomas Joseph alias Thomas M. J. and others [2022 SCC Online 1737].**_ 9. The Supreme Court after considering the provisions of Section 126 as well as 45(3)(a) of the Electricity Act has categorically held that, the charges for electricity certified by a distribution lincensee include fixed charges in addition to charges for the equal electricity supplied and consumed. Tariff includes both fixed charges and energy charges and once the assessing authority arrives at the conclusion that unauthorised use of electricity has taken place, he is obliged to make assessment charge equal to twice the tariff applicable which ``` WP(C) NO. 8072 OF 2020 ``` ``` 8 ``` includes dues payable towards the energy charges also. Paragraph 88 of the said Judgment which is relevant for the purposes of the present writ petition is extracted hereunder; “ **88.** _A plain reading of Section 45(3)(a) of the Act 2003 referred to above would indicate that the charges for electricity certified by a distribution licensee include the fixed charges, in addition to the charges for the actual electricity supplied and consumed. In such circumstances, it can be said that the tariff includes both, fixed charges and energy charges and once the assessing officer arrives at the conclusion that unauthorised use of electricity has taken place, he is obliged to make the assessment charge equal to twice the tariff applicable, which includes the dues payable towards the energy charges also.”_ 10. Sub-section (5) of Section 126 of the Electricity Act empowers the assessing authority to assess the misuse of electricity twice the rate applicable for connection of the consumer. It further provides that if the time period for misuse is not determinable, then the said charges will be confined to twelve months preceding the date of inspection. Otherwise it would be leviable for the entire period of misuse. The plain reading of Sub-section (5) of Section 126 read with Section 45(3) (a) of the Electricity Act would make it clear that, for misuse of the electricity, all the charges are to be assessed at twice which ``` WP(C) NO. 8072 OF 2020 ``` ``` 9 ``` would include the energy charge and fixed charge as held by the Supreme Court. 11. In view thereof, the impugned Order in Exhibit P-7 passed by the appellate authority is unsustainable and same is set aside. As a result thereof, the final assessment order in Exhibit P-4 would stand survived. In the above view, the present writ petition is allowed. **Sd/DINESH KUMAR SINGH JUDGE** Svn ``` WP(C) NO. 8072 OF 2020 ``` ``` 10 ``` ## **`APPENDIX OF WP(C) 8072/2020`** ## **`PETITIONER’S EXHIBITS`** ``` EXHIBIT P1THE TRUE COPY OF THE MAHAZAR DATED 08/06/2017. ``` ``` EXHIBIT P2THE TRUE COPY OF THE PROVISIONAL BILL ISSUED DATED 08/06/2017. ``` - **`EXHIBIT P3 THE TRUE COPY OF THE OBJECTION FILED BY THE 3RD RESPONDENT DATED 19/06/2017.`** - **`EXHIBIT P4`** - **`THE TRUE COPY OF THE FINAL ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENT ASSESSING OFFICER DATED 20/07/2017.`** ``` EXHIBIT P5 ``` - **`THE TRUE COPY OF THE APPEAL MEMORANDUM SUBMITTED BY THE 3RD RESPONDENT BEFORE THE KERALA STATE ELECTRICITY APPELLATE AUTHORITY.`** - **`EXHIBIT P6 THE TRUE COPY OF THE REPORT / STATEMENT FILED BY THE ASSESSING OFFICER IN THE ABOVE APPEAL.`** - **`EXHIBIT P7 THE TRUE COPY OF THE ORDER OF THE KERALA STATE ELECTRICITY APPELLATE AUTHORITY.`**