K.T. Thomas Hotel Arcadia v. Assistant Engineer Electrical Section, Kottayam Central, KSE Board, South Kottarakkara CGRF, Ombudsman & Kerala State Electricity Board

'C.R.' # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **&** **THE HONOURABLE MR. JUSTICE ASHOK MENON** **THURSDAY ,THE 04TH DAY OF OCTOBER 2018 / 12TH ASWINA, 1940** **WA.No. 1780 of 2015** **AGAINST THE ORDER/JUDGMENT IN WPC 17025/2007 of HIGH COURT OF KERALA DATED 24-07-2015** ## **APPELLANT/S:/PETITIONER** **K.T.THOMAS HOTEL ARCADIA, T.B.ROAD, KOTTAYAM.** **BY ADVS. SRI.J.JULIAN XAVIER SRI.FIROZ K.ROBIN** ## **RESPONDENT/S:/RESPONDENTS** - **1 THE ASSISTANT ENGINEER ELECTRICAL SECTION, KOTTAYAM CENTRAL, KSE BOARD, KOTTAYAM - 686 309.** - **2 THE CONSUMER GRIEVANCE REDRESSAL FORUM SOUTH KOTTARAKKARA, REPRESENTED BY THE DEPUTY CHIEF ENGINEER, CHAIRPERSON, VYDHUTHI BHAVANAM, KOTTARAKKARA.-690352.** - **3 THE OMBUDSMAN KSE BOARD, KPFC BHAVAN, CV RAMAN PILLAI ROAD, VELLAYAMBALAM, THIRUVANANTHAPURAM, PIN - 695 010.** WA 1780/15 -2- - **4 KERALA STATE ELECTRICITY BOARD VYDHUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY, PIN- 695004.** **BY ADVS. SMT.P.K.RADHIKA SRI.SUDHEER GANESH KUMAR R. SC KERALA STATE ELECTRICITY BOARD** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 18.9.2018, THE COURT ON 04.10.2018 DELIVERED THE FOLLOWING:** **==> picture [48 x 11] intentionally omitted <==** **==> picture [118 x 9] intentionally omitted <==** Ashok Menon, J. Aggrieved by the impugned judgment of the learned Single Judge dated 24.7.2015 in Writ Petition No.17025/2007, the petitioner is before us. 2. The facts in brief are thus:- The appellant/petitioner is the proprietor of Hotel Arcadia in Kottayam. The fourth respondent-Kerala State Electricity Board (KSEB) is supplying electricity to the petitioner's hotel which bears consumer No.3975. On 02.04.2001, following the request of the petitioner consequent to the burning of the electricity meter, it was replaced. The monthly bills raised subsequently were being paid without fail. The petitioner contends WA 1780/15 -3- that on 20.9.2001, without putting the petitioner to notice, the KSEB replaced the meter again and installed another one. To the surprise of the petitioner, he received Ext.P1 bill for short assessment for the period from April, 2001 to September, 2001 for an amount of Rs.1,59,665/-. The petitioner states that the KSEB had never informed that the meter was defective. Ext.P1 states that the average consumption was 7845 units per month, based on the consumption for a period of six months consequent to the change of the meter. WP(C) No.30468/2005 was filed by the petitioner challenging Ext.P1 and this Court directed the petitioner to raise his objections against Ext.P1 before the concerned Assistant Engineer. 3. Objection filed by the petitioner before the first respondent was considered and disposed of vide Ext.P2 order, holding that the meter was replaced on 20.9.2001, since it was detected to be faulty or defective. After replacement of the meter, the average consumption came to 7845 units per month, while prior to the replacement, the total consumption for over a period of six months was only 29476 units. The Assistant Audit Officer of the KSEB directed WA 1780/15 -4- preparation of a short assessment bill for six months period prior to the change of the meter. The appeal was dismissed. 4. The petitioner once again approached this Court by filing WP(C) No.2345/2006 challenging Exts.P1 and P2 stating that those are in violation of Section 26(6) of the Indian Electricity Act, 1910 and that if the meter was faulty or defective, KSEB was bound to give notice to the petitioner, before it was replaced. If at all the meter was defective or incorrect, it should have been referred to the Electrical Inspector and the KSEB could not have taken a unilateral decision to replace the meter without notice to the petitioner. For that reason alone, Ext.P1 short assessment bill is without any authority of law, illegal and unsustainable. 5. KSEB contended that the petitioner has alternative efficacious remedy before the Consumer Grievance Redressal Forum (CGRF). Vide Ext.P3 judgment dated 25.9.2006, this Court disposed the writ petition with liberty to the petitioner to move the CGRF for redressal of his grievances. WA 1780/15 -5- 6. In consequence to Ext.P3, the petitioner filed an appeal before the second respondent - CGRF. After hearing the petitioner, the appeal was dismissed vide Ext.P4 order. It was observed that the burnt meter that was replaced on 02.4.2001 with a new one, had only a short span of life and due to the defect, the consumption recorded was very low. 7. Aggrieved by Ext.P4 order, the petitioner filed an appeal before the third respondent-Ombudsman. The appeal was allegedly rejected without application of mind vide Ext.P5. The petitioner was served with Ext.P6 notice demanding a sum of Rs.2,20,338/- which is inclusive of penal interest on the sum originally claimed as per Ext.P1. 8. Thus, the petitioner approached this Court again with a Writ Petition on the ground that Exts.P1, P2, P4, P5 and P6 are all illegal, arbitrary and without any authority of law. The petitioner sought a writ of mandamus restraining the respondents from disconnecting the electricity supply and from taking any coercive action based on the demand made. 9. The learned Single Judge vide the impugned judgment found that Regulation 31C of the Conditions of WA 1780/15 -6- Supply of Electrical Energy, 1990 applied, which permits adoption of average consumption for a period of three months, for the purpose of a short assessment, but in the instant case, previous consumption for a period of six months had been taken, which requires correction at the hands of the respondents, and therefore, Exts.P1 and P6 bills were quashed and the KSEB was directed to issue revised bill to the petitioner. 10. This finding in the impugned judgment of the learned Single Judge stands challenged before us. The appellant states that the learned Single Judge failed to consider the fact that the original case of the KSEB was that the meter was faulty for a period from April, 2001 to September 2001 and for that reason the meter was replaced on 20.9.2001. Later, the KSEB took the stand that the meter was changed due to it getting burnt and it was changed at the request of the consumer on deposit basis. This stand of the KSEB was accepted by the CGRF as well as the Ombudsman; which is asserted to be incorrect. It is submitted that the learned Single Judge failed to appreciate the valid contentions raised by the petitioner and that the KSEB, at the WA 1780/15 -7- most, should have taken the calculation based on the recording of the consumption for the corresponding period from the previous year. If that be so, the monthly bill for September, 2001 alone need be revised and thus the learned counsel for the appellant/petitioner submits that the impugned judgment of the learned Single Judge may be set aside and the Writ Petition be allowed. 11. The learned counsel for the petitioner places reliance on the judgment of the Honourable Supreme Court in (2005) 4 SCC 327 [Bombay Electricity State Transport (BEST) Undertaking v. Laffans (India) (P) Ltd. & Another] to argue for the proposition that the dispute as to the correctness of the meter should be referred to the Electrical Inspector, and a new meter installed without such determination by the Electrical Inspector under section 26(6) of the Electricity Act, cannot be permitted, and KSEB cannot take action on its own understanding about the functioning of the meter. The additional demand over and above the regular demand raised through the bills issued for that period and already paid by the consumer, is not sustainable. The WA 1780/15 -8- right to raise additional bills stood lost for its failure to proceed in accordance with Section 26(6). 12. The learned counsel argues that a new meter was first installed on 19.01.2001 consequent to it getting burnt. On 02.04.2001, the meter was again changed by the KSEB and there was no request made by the petitioner. On 20.9.2001, the meter was changed by the KSEB stating that it was faulty, and vide Ext.P1 short assessment bill, a demand was raised for a sum of Rs.1,59,665/-for the period from April 2001 to September, 2001, which is illegal. The learned counsel relies on the decision in 2006 KHC 820 : 2006(3) KLT 465 [Nirmala Metal Industries v. KSEB & Others] where, following the decision of the Honourable Supreme Court in BEST (supra) , it is held thus: “Once the meter installed by the Board is found to be defective, a duty is cast on the Board to install a correct meter in the premises of the consumer and get the defective meter tested by the Electrical Inspector under S.26(6) of the Electricity Supply Act. Once the meter is found to be defective Electrical Inspector has to estimate the amount of energy supplied for a period not exceeding 6 months. Consumer has no statutory obligation to check as to whether the meter is recording the correct energy or not nor is he an expert to find out the correctness or otherwise of the meter. But if the consumer entertains any WA 1780/15 -9- doubt that the meter is defective, not the Board, the consumer can get the meter tested by the Electrical Inspector.” 13. The learned Standing Counsel submits that the specific case of the KSEB is that the petitioner had made a complaint on 19-09-2001 about the meter getting burnt and it is consequent to such request that the meter was replaced on 20-09-2001 and not as contended by the petitioner about the meter being changed by the KSEB without any notice to him. The decision in BEST (supra) does not apply to the case in hand. It is held by the Hon'ble Apex Court in para 9 of the said decision thus; “9. What is contemplated by S.26(6) is a running meter, but which on account of some technical defect registers the amount of energy supplied or the electrical quantity contained in the supply beyond the prescribed limits of error. It contemplates a meter which is either running slow or fast with the result that it does not register the correct amount of energy supplied. There is an additional reason for coming to such a conclusion. S.26(6) confers power upon the Electrical Inspector to estimate the amount of energy supplied to the consumer or the electrical quantity contained in the supply, during such time, not exceeding six months, as the meter shall not, in the opinion of such Inspector, have been correct. Where the meter is running slow or fast, it will be possible for the Electrical Inspector to estimate the amount of energy supplied to the consumer by determining the extent or WA 1780/15 -10- percentage of error in recording the supply, whether plus or minus. However, where the meter is burnt or is completely non functional, such an exercise is not at all possible. Therefore, S.26(6) can have no application in a case where a meter has become completely non functional on account of any reason whatsoever.” Hence, there is no question of examination of the meter by the Electrical Inspector in the case of a meter burning is the submission. 14. The argument of the learned counsel for the appellant about the meter getting burnt and replaced on 19.1.2001 does not find a place anywhere in the pleadings or evidence. In the objections filed by the appellant before the first respondent, in para 3, it is admitted that the old meter was changed upon request by Arcadia Hotel thus: “The meter had burnt and the new meter was immediately installed. No electricity was consumed during the period between the old meter burning and the new meter being installed.” 15. This has to be with reference to the installation of meter on 20-09-2001. The appellant cannot, therefore, be heard to say that the meter was replaced by the KSEB without notice or resorting to the provisions under Section 26(6). There was no such WA 1780/15 -11- contention taken up before the first respondent. The finding of the CGRF as well as the Ombudsman is to the effect that the meter was changed on 02-04-2001 and again on 20-09-2001 because it got burnt on both occasions. 16. The question that arises for consideration here is whether it was proper on the part of the KSEB to have assessed the improper functioning of the meter based on the consumption after the change of the meter on 20.09.2001; when even according to the KSEB the change was occasioned for reason of the meter getting burnt. 17. The learned counsel for the KSEB argues that when the meter is found to be not working properly, the bill can be raised on the basis of the consumption three months prior to the meter becoming faulty and if that is not possible, then the reading for the subsequent three months could be taken into consideration as per Regulation 31(c) of the Conditions of Supply of Electrical Energy. It would be beneficial to extract Regulation 31(c), which reads thus: “31(c) : In the event of any meter being found incorrect (which includes meter ceasing to record, running fast or slow, WA 1780/15 -12- creeping or running in reverse, direction) and where the actual errors on reading cannot be ascertained, the meter will be declared faulty and the correct quantity of energy shall be determined by taking the average consumption for the previous three months, due regard being paid to the conditions of working, occupancy etc. If the average consumption for the previous three months cannot be taken due to the meter ceasing to record the consumption or any other reason, the correct consumption will be determined based on the average consumption for the suceeding three months. Where any difference or dispute arises as to the correctness of the meter, the matter shall be decided upon by the Electrical Inspector to Government upon the application of either the Board or the consumer. During such periods the consumer will be charged only the meter minimum. After determining the correct consumption due billing will be made and necessary adjustment made in the next invoice issued.” 18. A reading of this Regulation would make it clear that where any difference or dispute as to the correctness of the meter arises, the matter has to be decided by the Electrical Inspector of the Government, upon the application of either the Board or the consumer and only after determining the correct consumption, due bill can be raised and necessary adjustment made in the next invoice issued. Such reference is required even when the meter ceases to record the reading; but the moot question here is what WA 1780/15 -13- would be the situation if the meter is burnt and so ceases to record the reading. In that eventuality, the reference to the Electrical Inspector is futile and it cannot result in any finding as to recording of the reading prior to the burning. 19. In the instant case, the meter was functioning after it was replaced on 02.04.2001 till it was reported to be again burnt on 19.9.2001. But, according to the KSEB, it was running slow and recording a lower consumption in comparison to the consumption prior to the changing of the meter on 2.4.2001 and also subsequent to the changing of the meter for the second time on 20.9.2001 and therefore based on the consumption prior to the changing of the meter and subsequent to the changing of the meter, bill was raised for that period between 2.4.2001 and 20.9.2001 and there is nothing wrong in that. In the instant case, the meter could not be examined by the Electrical Inspector as contemplated under Section 26(6) of the Indian Electricity Act, 1910 or under Regulation 31(c) because the meter was reported to be burned on 19.9.2001 and examination by the Inspector WA 1780/15 -14- would not have given any result regarding the functioning of the meter. 20. It is true that Regulation 31(c) states that when it is not possible to calculate the correct consumption for the period three months prior to the change of the faulty meter, the consumption subsequent to the change of the meter for the three months could be taken into consideration. But, even for that, the Electrical Inspector will have to certify that the meter is not functioning properly. Until the Electrical Inspector concludes that the meter is faulty, it cannot be unilaterally stated by the KSEB that the meter was faulty during the period 2.4.2001 to 20.9.2001, to raise bill for the period based on the earlier or subsequent consumption. Probably, this is a lacuna for which there is no provision in the Act. But such instances should have been contemplated and there is no remedy in such instances. 21. Even in the decision in BEST (supra) what is stated is that, where the meter is burnt or is completely non-functional, the exercise of getting the meter examined by the Electrical Inspector is not at all possible. However, if there is no recording of WA 1780/15 -15- reading for any period when the meter was not replaced due to it having been burnt, there could be a reference to the Electrical Inspector and on his certifying the meter having ceased due to the burning, an estimate could be made for the period when there was no reading recorded. What distinguishes the present case is that the burnt meter was immediately replaced and the meter was recording the reading prior to replacement. Therefore, Section 26(6) can have no application in a case where a meter has become completely non-functional on account of any reason whatsoever, and is immediately replaced and there was recording of reading prior to it becoming non-functional. 22. We extract hereunder the following paragraphs from BEST (supra) : “ 12. In the present case, the demand raised by the appellant against the first respondent can be divided into two parts: (i) for the period during which the meter was burnt, and (ii) for the period for which the meter was not correct. For the period for which the readings could not be recorded or retrieved because the meter was burnt there is nothing wrong in the licensee having raised the demand based on the average consumption for the similar period during the previous year. It is a reasonable basis. Nothing has been brought on record by Respondent 1 to show or even suggest that any basis other than the one adopted by the WA 1780/15 -16- appellant could have been more reasonable and more appropriate for calculating the quantity of electricity consumed during the period of no-meter or no-meter-reading. 13. For the period for which, according to the appellant, the meter was not correct, none of the parties has referred the dispute to the Electrical Inspector. The meter though it is alleged by the appellant to have remained not correct, readings have been regularly recorded, bills raised and also paid by the consumer, Respondent 1. According to Section 26(6), the readings would bind the appellant and Respondent 1 both. It has never been the case of the appellant at any stage that the meter was not correctly recording the consumption of electricity on account of being non-functional due to any fraud committed or device or trick adopted by the consumer, Respondent 1 or that the body seal of the meter was found broken or tampered with. Respondent 1 was accepting and honouring the demands raised by the appellant and, therefore, Respondent 1 cannot be expected to have raised a dispute and sought for a reference for determination by the Electrical Inspector. The appellant could not have, therefore, revised the demand for such period based on average consumption during the previous year. ...” 23. Hence, only when there is no meter recording for reason of the meter being burnt, there could be an assessment made on the previous or future consumption; without reference to the Electrical Inspector. Here, there is no such case and the specific plea is that during the period, though the meter was recording the consumption, the reading was lower than that of the WA 1780/15 -17- prior and subsequent period. Then there should have been a reference to the Electrical Inspector, which could not be done since the meter got burned. The burning was on 19.09.2001 and the replacement was on the very next day. Hence the non recording due to the burning was only for a day. It is also pertinent to note that the meter reading was taken for the period from 2.4.2001 to 20.9.2001 and all the bills issued by the Board were being paid regularly without any default by the consumer. The KSEB did not at any point of time during that period, feel that the consumption of electricity during that period had dropped and deemed it fit to refer the meter for examination by the Electrical Inspector. Had they done so, Regulation 31(c) could have been applied to estimate the consumption for that period. But not having done so, there is no other option left to the KSEB for realisation of the amount for the period, where there is no conclusion by the Electrical Inspector to the effect that the meter was faulty during that period. In view of the forgoing reasons, we find that the learned Single Judge did not arrive at a proper conclusion directing the assessment to be made on the WA 1780/15 -18- basis of the consumption for the period of three months as per Regulation 31(c) and fresh bill raised. The appeal is, therefore, allowed and the impugned judgment is set aside. The Writ Petition is allowed. The bill raised by the Board as per Exts.P1 and P6 would stand quashed. It is also made clear, that, no revised bill for that period can be raised by the KSEB as directed by the learned single Judge. No order as to costs. **Sd/-** ## **K.VINOD CHANDRAN** **JUDGE** ## **Sd/-** ## **ASHOK MENON** **JUDGE** //True Copy// jg