M/S COCHIN SURFACTANTS PVT. LTD. v. KERALA STATE ELECTRICITY BOARD

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.SURENDRA MOHAN** **TUESDAY, THE 11TH DAY OF MARCH 2014/20TH PHALGUNA, 1935** ## **WP(C).No. 32704 of 2009 (G)** ## **----------------------------** ## **PETITIONER(S):** **----------------------** **M/S.COCHIN SURFACTANTS PVT. LTD., PLOT NO.63, INDUSTRIAL AREA, EDAYAR BINARIPURAM P.O., REP. BY ITS MANAGING DIRECTOR SAJITHA BASHEER.** **BY ADVS.SRI.K.K.M.SHERIFF SRI.LAL K.JOSEPH SRI.A.A.ZIYAD RAHMAN SRI.P.MURALEEDHARAN (THURAVOOR) SRI.V.R.REKESH** ## **RESPONDENT(S):** **-------------------------** **1. KERALA STATE ELECTRICITY BOARD, REP. BY ITS SECRETARY, VUDHYUTHI BHAVAN, PATTOM TRIVANDRUM.** ## **2. THE DEPUTY CHIEF ENGINEER,** **KERALA STATE ELECTRICITY BOAD, ELECTRICAL CIRCLE PERUMBAVOOR.** **3. THE SPECIAL OFFICER (REVENUE), KERALA STATE ELECTRICITY BOARD, VYDHYUDHIBHAVAN THIRUVANANTHAPURAM.** **4. THE ASSISTANT ENGINEER, KERALA STATE ELECTRICITY BOARD, ELECTRICAL SECTION EDAYAR.** **R,R1-4 BY ADV. SRI.P.P.THAJUDEEN, SC, K.S.E.B R,R1TO4 BY ADV. SRI.C.K.KARUNAKARAN, SC FOR KSEB RR1 TO 4 BY ADV. SRI.P.SANTHALINGAM (SR.),SC FOR KSEB RR1 TO 4 BY ADV. SRI.S.SHARAN,SC,K.S.E.BOARD** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-03-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).No. 32704 of 2009 (G)** ## **APPENDIX** ## **PETITIONERS EXHIBITS:** **EXHIBIT-P1 COPY OF THE TRUE COPY OF THE HIGH TENSION AGREEMENT DATED 27.08.2013 ENTERED INTO BETWEEN THE 1ST RESPONDENT AND THE PETITIONER.** **EXHIBIT-P2 COPY OF THE MAHAZER DATED 18.03.2005. EXHIBIT-P3 COPY OF THE INVOICE DATED 01.04.2005. EXHIBIT-P4 COPY OF THE COMMUNICATION NO. HTB 28/3976/1863 DATED 01.04.2005. EXHIBIT-P5 COPY OF THE INVOICES FOR THE PERIOD DATED 4.3.05 EXHIBIT-P5(a) COPY OF THE INVOICES FOR THE PERIOD DATED 7.2.05. EXHIBIT-P5(b) COPY OF THE INVOICES FOR THE PERIOD DATED 4.1.05 EXHIBIT-P5(c) COPY OF THE INVOICES FOR THE PERIOD DATED 6.12.2005. EXHIBIT-P5(d) COPY OF THE INVOICES FOR THE PERIOD DATED 5.11.04. EXHIBIT-P5(e) COPY OF THE INVOICES FOR THE PERIOD DATED 5.10.04. EXHIBIT-P6 COPY OF THE COMMUNICATION ISSUED BY THE CHIEF ELECTRICAL INSPECTOR BEARING NO. T1-4151/04-EIE DATED 20.7.04. EXHIBIT-P7 COPY OF THE COMMUNICATION DATED 30.03.05. EXHIBIT-P8 COPY OF THE JUDGMENT DATED 6.7.05 IN W.P.(C) 12657/05 EXHIBIT-P9 COPY OF THE MEMORANDUM OF APPEAL DATED 18.7.05 EXHIBIT-P10 COPY OF THE ORDER DATED 19.9.05 EXHIBIT-P11 COPY OF THE JUDGMENT DATED 3.08.09 IN W.P.(C) 28747/05. EXHIBIT-P12 COPY OF THE ORDER DATED 31.10.09 PASSED BY THE 2ND RESPONDENT.** ## **RESPONDENTS EXHIBITS: NIL** ## **// TRUE COPY //** **P.A TO JUDGE** ## **SB** ## **K.SURENDRA MOHAN, J. --------------------------------------------W.P.(C) No.32704 of 2009-G ---------------------------------------------Dated this the 11[th] day of March, 2014** ## **J U D G M E N T** Whether the Kerala State Electricity Board can penalise a consumer upon detection of additional connected load installed on the strength of permission granted by the Electrical Inspectorate, though the contract demand has not been exceeded by the consumption? This is the question that arises for consideration in this writ petition. 2. The petitioner is a private limited company incorporated under the Companies Act. The petitioner has a manufacturing unit in the Industrial area, Edayar in Ernakulam District. The petitioner is a High Tension consumer of electricity with consumer code No. 28/3976 of the Electrical Section, Edayar. Exhibit P1 is the High Tension agreement entered into between the petitioner and the first respondent. On 18.03.2005, the Anti Power Theft Squad ('APTS' for short) conducted an inspection of the ## -:2:- ## W.P.(C) No.32704 of 2009-G premises of the petitioner. Exhibit P2 is the mahazar that was prepared at the time of inspection. It was detected at the time of inspection that the petitioner had installed equipments with capacity in excess of the sanctioned connected load. Therefore, as per Exhibit P3 Demand Notice dated 01.04.2005, an amount of 4,95,720/- was₹ demanded from the petitioner. The allegation was that, she had installed unauthorised connected load of 153 KVA in excess of her sanctioned connected load of 163KVA. Aggrieved by Exhibit P4, the petitioner preferred Exhibit P9 appeal challenging the same before the second respondent. As per Exhibit P10 order dated 19.09.2005, the second respondent confirmed the impugned proceedings. 3. The petitioner thereupon approached this Court challenging the same in W.P.(C) No.28747 of 2005. As per Exhibit P11 judgment, the said writ petition was allowed, Exhibit P10 order was set aside and the appeal was directed to be considered and disposed of afresh. Accordingly the ## -:3:- ## W.P.(C) No.32704 of 2009-G matter was heard again and by Exhibit P12, the second respondent has confirmed Exhibits P3 and P4. The petitioner has, in this writ petition challenged Exhibit P12. 4. According to Sri.Ziyad Rahman who appears for the petitioner, the respondents have no authority to penalise the petitioner for the excess connected load that was detected at the time of inspection. This is for the reason that, the said excess connected load was not unauthorised. The said excess connected load was installed on the strength of prior sanction obtained from the Electrical Inspectorate. Exhibit P6 is the permission for the installation, issued by the said authority **.** Exhibit P7 is the permission for energisation, also issued by the Electrical Inspectorate. The additional connected load having been installed with the permission of the competent authority, it cannot be described as unauthorised connected load. 5. The counsel has a further contention that even assuming the additional load to be unauthorised, no penal -:4:- W.P.(C) No.32704 of 2009-G action is warranted in the present case for the reason that the consumption of the petitioner has not exceeded the contract demand at any point of time, despite installation of the additional equipments. Being a High Tension consumer, the concept of 'connected load' is not applicable to the petitioner as in the case of Low Tension consumers. This is for the reason that, in the case of Low Tension Consumers a fixed charge is imposed, calculated on the basis of the actual connected load. In the case of High Tension Consumers, in sharp contrast, no fixed charge is imposed on the basis of the connected load. In fact, the connected load is not taken into account for the purpose of levying any charge on the High Tension consumers. They are bound by the contract demand. Referring to the table that has been provided in paragraph 9 of the writ petition, the counsel points out that at no time even after the date of inspection, the consumption of the petitioner has exceeded the contract demand. Exhibit P5 series bills are relied upon to contend ## -:5:- ## W.P.(C) No.32704 of 2009-G that before the date of inspection also, the consumption of the petitioner had remained well below the contract demand. The above crucial aspects not having been considered by the appellate authority while issuing Exhibit P12, it is contended that the said order as well as Exhibit P3 and P4 are liable to be set aside. 5. A counter affidavit has been filed on behalf of the respondents. Senior Counsel Sri. P. Santhalingam appears for the respondents. According to the learned Senior Counsel, the inspection of the premises of the petitioner was on 18.03.2005. The Electricity Act had come into force long before that, in the year 2003. Section 126 of the said Act therefore squarely applies to the case of the petitioner. Admittedly, the petitioner has not obtained any prior permission from the first respondent before either installing or energising the additional connected load. Therefore, the additional load that was detected could only be considered to be unauthorised, attracting the penal consequences -:6:- ## W.P.(C) No.32704 of 2009-G contemplated by Section 126 of the Kerala Electricity Act, 2003 (hereinafter referred to as 'the Act' for short). Sub section 6(b)(ii) covers the situation in the present case where electrical energy has been consumed 'by a means not authorised by the concerned person or authority or licencee'. Clause 13(b) of Exhibit P1 agreement is also relied upon to submit that, it was incumbent on the petitioner to have notified the first respondent of the intended alterations, additions, substitutions or transfer and obtained prior approval. The said procedure not having been adopted, Section 126 is attracted. Therefore, Exhibits P3 and P4 are justified, it is contended. The above aspects having been considered by the appellate authority also in Exhibit P12, no interference with the said order is called for at the hands of this Court. 6. The counsel for the petitioner responds to the above contentions by pointing out that even in the Clause on which reliance is placed by the learned Senior Counsel ## -:7:- ## W.P.(C) No.32704 of 2009-G what has been prohibited is that the consumer shall not make any alteration on the machinery or equipment either by way of addition, substitution or transfer, which is liable to increase the obligation of the Board to supply electrical energy in excess of the agreed contract demand or which may affect the supply system of the Board to its detriment. Since none of the circumstances contemplated by the said Clause exist in the present case, it is contended that the said Clause has no application to the facts of the present case. 7. With respect to the application of Section 126 of the Act, it is contended that, the said provision cannot apply to the case of the petitioner for the reason that the petitioner has obtained Exhibits P6 and P7 permissions from the competent authority for installation as well as energisation of the additional equipments. The said authority being the authorised body to issue such permission as per the Rules applicable, the additional load ## -:8:- ## W.P.(C) No.32704 of 2009-G cannot be characterised as unauthorised connected load. The Counsel for the petitioner places reliance on the decision of a learned Single Bench of this Court in **Alwaye Rubex (P) Ltd v. Kerala State Electricity Board** [2014 (1) KLT 307] to support his contentions. 8. Heard. It is no doubt true that on inspection of the premises of the petitioner on 18.03.2005, it was found that the petitioner had connected equipments in her premises in excess of her sanctioned connected load. To be more specific, according to the respondents, though the petitioner's connected load was 192KVA, it was found that she had connected an excess load of 153KVA. The said excess connected load having been installed without the prior permission of the respondents, it is contended that use of the additional equipments installed is, unauthorised use of electrical energy attracting the provisions of Section 126 of the Act. The contention of the petitioner is that, the additional installations having been sanctioned -:9:- ## W.P.(C) No.32704 of 2009-G by the Electrical Inspectorate, are duly authorised by the competent authority. 9. Section 2(6) of the Act defines the expression “authority” as follows:- “Authority” means the Central Electricity Authority referred to in sub-section (1) of Section 70. 10. Section 70 of the Act deals with constitution of the Central Electricity Authority to exercise such functions and to perform such duties as are assigned under the Act. The Central Electricity Authority also has the power to make regulations, conferred by Section 177, for the purpose of carrying out the provisions of the Act. In exercise of the power under Section 177, the Central Electricity Authority has issued the Central Electricity Authority (Measures Relating to Safety and Electric Supply) Regulations, 2010. Chapter VI of the Regulations deals with safety provisions for electrical installations and apparatus of voltage exceeding 650volts. High Tension and extra High Tension consumers come within the said category. Regulation 43 ## -:10:- ## W.P.(C) No.32704 of 2009-G ## deals with the approval by the Electrical Inspector. ## 11. Regulation 43 reads as follows: 43. Approval by Electrical Inspector **.--** (1) Voltage above which electrical installations will be required to be inspected by the Electrical Inspector before commencement of supply or recommencement after shutdown for six months and above shall be as per the notification to be issued by the Appropriate Government, under clause (x) of sub-section (2) of Section 176, and sub-section (1) of Section 162 of the Act. (2) Before making an application to the Electrical Inspector for permission to commence or recommence supply after an installation has been disconnected for six months and above at voltage exceeding 650V to any person, the supplier shall ensure that electric supply lines or apparatus of voltage exceeding 650V belonging to him are placed in position, properly joined and duly completed and examined and the supply of electricity shall not be commenced by the supplier for installations of voltage needing inspection under these regulations unless the provisions of regulations 12 to 29, 33 to 35, 44 to 51 and 55 to 77 have been complied with and the approval in writing of the Electrical Inspector has been obtained by him: Provided that the supplier may energise the ## -:11:- ## W.P.(C) No.32704 of 2009-G aforesaid electric supply lines or apparatus for the purpose of test specified in regulation 46. (3) The owner of any installation of voltage exceeding 650V shall, before making application to the Electrical Inspector for approval of his installation or additions thereto, test every circuit of voltage exceeding 650V or additions thereto, other than an overhead line, and satisfy himself that they withstand the application of the testing voltage set out in sub-regulation (1) of regulation 46 and shall duly record the results of such tests and forward them to the Electrical Inspector: Provided that an Electrical Inspector may direct such owner to carry out such tests as he deems necessary or accept the manufacturer's certified tests in respect of any particular apparatus in place of the tests required by this regulation. (4) The owner of any installation of voltage exceeding 650V who makes any addition or alteration to his installation shall not connect to the supply his apparatus or electric supply lines, comprising the said alterations or additions unless and until such alteration or addition has been approved in writing by the Electrical Inspector. Sub clauses 3 and 4 extracted above cast an obligation on a consumer to obtain prior permission of an Electrical Inspector both for installation and energisation of any ## -:12:- ## W.P.(C) No.32704 of 2009-G electrical equipment, under the circumstances specified therein. The above regulations are of the year 2010, whereas the inspection of the petitioner's premises was on 18.03.2005. 12. Prior to the coming into force of the regulations extracted above, the Indian Electricity Rules, 1956 was in force. Rule 63 of the said Rules contains similar requirements as stipulated by Regulation 43 extracted above. Sub rules 2 and 3 of Section 63 are extracted hereunder for the convenience of reference. **63. Approval by Inspector** .- (1) Before making an application to the Inspector for permission to commence or recommence supply after an installation has been disconnected for one year and above at high or extra-high voltage to any person, the supplier shall ensure that the high or extra-high voltage electric supply lines or apparatus belonging to him are placed in position, properly joined and duly completed and examined. The supply of energy shall not be commenced by the supplier unless and until the Inspector is satisfied that the provisions of rules 65 to 69 both inclusive have been complied with and the approval in writing of the Inspector has been obtained by him: -:13:- W.P.(C) No.32704 of 2009-G Provided that the supplier may energise the aforesaid electric supply lines or apparatus for the purpose of tests specified in rule 65. (2) The owner of any high or extra-high voltage installation shall, before making application to the Inspector for approval of his installation or additions thereto, test every high or extra-high voltage circuit or additions thereto, other than an overhead line, and satisfy himself that they withstand the application of the testing voltage set out in sub rule (1) of rule 65 and shall duly record the results of such tests and forward them to the Inspector: Provided that an Inspector may direct such owner to carry out such tests as he deems necessary or, if he thinks fit, accept the manufacturer's certified tests in respect of any particular apparatus in place of the tests required by this sub-rule. (3) The owner of any high or extra-high voltage installation who makes any additions or alterations to his installation shall not connect to the supply his apparatus or electric supply lines, comprising the said alterations or additions unless and until such alterations or additions have been approved in writing by the Inspector. A comparison of Rule 63 with Regulation 43 show that they are in pari materia with each other. It therefore follows that the relevant provisions of law applicable required the -:14:- ## W.P.(C) No.32704 of 2009-G petitioner to obtain prior permission from an Electrical Inspector before installing or energising additional connected load. The petitioner had sought for and has been granted such permission as evidenced by Exhibits P6 and P7. Therefore, though additional connected load in excess of what was sanctioned by the respondents was detected at the time of inspection, it cannot be said that the same was 'unauthorised' connected load. It is true that the petitioner has not obtained the permission from the respondents for the purpose. However, the omission to do so cannot attract Section 126 of the Act or the penalty that is contemplated by the said provision. This is for the reason that, the requirement of the expression 'unauthorised use of electrical energy' has been set out in the explanation to the said provision. The relevant portion of the explanation, sub clause (b) thereof reads as follows:- (b) “unauthorised use of electricity means the usage of electricity- (i)by any artificial means; or (ii) **by a means not authorised by the** concerned person ## -:15:- W.P.(C) No.32704 of 2009-G ## or **authority** or **licensee** ; or (iii)through a tampered meter; or - (iv)for the purpose other than for which the usage of electricity was authorised; or (v)for the premises or areas other than those for which the supply of electricity was authorised. [emphasis supplied] 13. The words 'or' appearing respectively after the words 'concerned person', 'authority' and 'licensee' shows that the said words have been used disjunctively. Consequently authorisation by any one of them would make the activity, authorised. In the present case, the competent authority having sanctioned the installation of the connected load, the above provision is not attracted. 14. The other question is whether the omission on the part of the petitioner to have informed the respondents would result in attracting the prohibition in Exhibit P1 agreement. Clause 13(b) of Exhibit P1 provides as follows:- b) The consumer shall not make any alteration on the machinery/equipment either by way of addition or substitutions or transfer which is liable to increase the obligation of the Board to supply electrical energy in ## -:16:- ## W.P.(C) No.32704 of 2009-G excess of the agreed contract demand and/or which may effect the supply system of the Board to its detriment. In any event, the consumer shall notify the Board of the intended alterations, additions, substitutions or transfer and obtain the prior approval of the Board in writing before execution of any such action. The above provision prohibits the conduct of any alteration on the machinery or the equipment by way of addition, substitution or transfer which is liable to increase the obligation of the Board -: (1) to supply electrical energy in excess of the agreed contract and/or (2) which may effect the supply system of the Board to its detriment . In the present case, Exhibit P5 series bills show that the consumption of the petitioner had not exceeded the contract demand during the previous months, as evidenced by Exhibit P5. There is no material available in this case to justify a conclusion that the supply system of the Board had been affected to its detriment, by connection of the ## -:17:- ## W.P.(C) No.32704 of 2009-G additional load. Therefore, I do not find any circumstances in the present case, attracting the prohibition in the above clause of Exhibit P1 contract. A further contention raised by the learned Senior Counsel is that, the installation of the additional connected load had violated the other provisions regulating the conditions of supply of electrical energy to the petitioner. I find that a similar issue has been considered by a learned Single Judge of this Court in the decision reported in **Alwaye Rubex (P) Ltd. v. Kerala State Electricity Board** [2014(1) KLT 307] (supra). **Abdul Rehim, J** has concluded the issue in the following words, in paragraph 12 of the said judgment. But, still the question remains as to whether such lack of approval will entitle imposition of penalty, either under Clause 42(d) of the Conditions of Supply of Electrical Energy or under Section 126 of the 2003 Act. Consequences of violation of Clause 14(b) is specifically provided in the agreement itself under clause 14(c), which is by way of disconnection of supply. Imposition of penalty can only be when there is 'unauthorised usage' of electricity detected. Even going by the dictum contained in Seetaram Rice Mill's case (cited supra) it cannot be ## -:18:- ## W.P.(C) No.32704 of 2009-G held that, there was unauthorised usage, because the Board has no case that the additional machinery installed had resulted in exceeding the 'contract demand'. It is also not proved that it has created an additional obligation of the Board to supply electrical energy in excess of the agreed 'contract demand'. I am in respectful agreement with the above conclusion. 15. The result of the foregoing discussion is that, Exhibits P3, P4 and P12 are unsustainable. They are therefore set aside. However, it is made clear that, the respondent shall be at liberty to initiate action if it is found that the consumption of the petitioner exceeds the contracted demand at any time. The amount deposited by the petitioner as condition for the grant of the interim order in the above case shall be adjusted towards the future bills of the petitioner. The writ petition is allowed as above. **Sd/K.SURENDRA MOHAN, JUDGE** kkj