M/S G.T.N TEXTILES LTD v. Kerala State Electricity Board & others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE AMIT RAWAL THURSDAY, THE 2[ND] DAY OF FEBRUARY 2023 / 13TH MAGHA, 1944** ## **WP(C) NO. 16793 OF 2010** ## **PETITIONER/S:** M/S.G.T.N TEXTILES LTD, ERUMATHALA P.O ALUVA REP.BY ITS EXECUTIVE MR.P.C.SEKSARIA. BY ADVS. SRI.M.PATHROSE MATTHAI (SR.) SMT.MARIAM MATHAI SRI.SAJI VARGHESE ## **RESPONDENT/S:** 1 KERALA STATE ELECTRICITY BOARD VAIDHUTHI BHAVAN, PATTOM, TRIVANDRUM, REPRESENTED BY ITS SECRETARY. 2 THE SPECIAL OFFICERREVENUEKSEB VYDHUTHI BHAVAN,PATTOM PO, TRIVANDRUM. 3 STATE ELECTRICITY OMBUDSMAN THAANATH BUILDING, CLUB JUNCTION,POOKKATTUPADY, ROAD,EDAPPALLY TOLL,COCHIN-682 024. BY ADV B.PRAMOD THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.02.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WP(C) NO. 16793 OF 2010** **2** ## **JUDGMENT** Order of the Ombudsman Ext.P5 dated 17.2.2010 to the extent against the petitioner is under challenge in this writ petition. 2. Petitioner is a Company incorporated in the Companies Act and is engaged in the manufacture and export of cotton yarn at its factory situated near Aluva. It was established in the year 1964 and had undertaken substantial expansion and modernization during the year 2004. The supply of electricity at 11 K.V was converted to 110 K.V and for that purpose, application was made to the Chief Engineer in the year 2004 and after a gap of number of months, respondents vide Ext.P1 dated 14.10.2005 raised a demand of Rs.52,38,095/- under five heads by charging interest on installments during the period the meter remained faulty, short billing of Maximum Demand charges during May, 1999, Arrears pertaining to 75:25 issue (quota fixation), Interest for short remittance from 8/88 to 10/88 (Upto 10/2005) and interest on account of surcharge. 3. Petitioner since was in a need of an extra load under protest, deposited the substantial amounts for conversion of supply and challenged before the Central Consumer Redressal Forum **WP(C) NO. 16793 OF 2010** **3** (CGRF). CGRF vide order dated 27.7.2009, partly allowed the claim petition of the petitioner ie., on 1[st] and 4[th] head and remanded on 3[rd] head to the KSEB whereas the demand under 2[nd] and 5[th] head was upheld. The matter was taken to Ombudsman by availing the statutory remedy. Ombudsman vide order dated 17.2.2010, Ext.P5 quashed the demand No.1 which was partly allowed in favour of the petitioner without any preference or appeal on behalf of the KSEB and granted the relief in the 2[nd] head whereas the relief Nos.4 and 5 were rejected ie., relief Nos.1 was reversed and the appeal qua the balance relief under head 4 and 5 was rejected. 4. Learned counsel appearing on behalf of the petitioner submitted that the case has a little checkered history which has not been examined in detail by both CGRF and Ombudsman in as much as that on 1.8.1992, it was found that current transformer and potential transformer (CTPT) of the KSEB metering system installed in the premises of the petitioner had become defective. As per the provisions of the then Kerala Electricity Supply Code, it was the prerogative and duty of the KSEB to replace the same. Despite having sent the number of intimations, when no action was taken, compelled the petitioner to purchase the same by obtaining a permission from the licensee in the month of April **WP(C) NO. 16793 OF 2010** **4** 1995. During this period, petitioner was charged an average consumption which was revised in January 1994 by raising an additional demand of Rs.36,41,857/-. A request was made for making installments which was accepted and the amount was deposited with a condition that in case of default, interest @ 24% would be charged. It is a matter of record that the petitioner vide Ext.P6, deposited all the 10 installments in time. Had there been a default, the interest @ 24% would have been Rs.4,74,375/-. In the meantime, the Electricity department / licencee raised a demand of Rs.38,07,683/- by adding the interest @ 24% till 2004 on the ground that the petitioner was liable to pay the interest of 24% with the first installments. The aforementioned demand was assailed in this Court vide WP (C) No. 19417 of 2009 which was interdicted by the interim order though it has been allowed vide judgment dated 19.12.2016 ie., when an appeal before the Ombudsman was pending. 5. Ombudsman rejected the case on the demand No.1, which was partly allowed by the CGRF only on the ground of non disclosure of the pendency of the writ petition, ibid. 6. It was further contended that between August 1998 October 1998, there was a power cut in the State of Kerala and power from the outside state was being imported at higher rate. **WP(C) NO. 16793 OF 2010** **5** All the industrial associations submitted representation to the Electricity Minister for permission to pay the energy charges at the Kerala rate during the power cut period for, the entire energy consumed, which was acceded to. But when the request for extra load was submitted the licencee raked up the issue of charging the interest at the rate of 18% till 1992 and thereafter 24% by demanding a sum of Rs.5,47,673/- and Rs.3,56,945/- (interest portion). It is contended that surcharge under head No.5 is concerned, licencee is only a collecting agency for the Government as per the provisions of the Kerala State Electricity Surcharge (Levy and Collection Act) 1989. Even on surcharge from 1992 till 2004, demand of the interest @ 18 and 24% was also levied. Petitioner is not liable to pay the interest owing to pendency of litigation regarding charging of the surcharge since there is no provision in Section 6 of the Act that interest for that period cannot be levied. 7. On the other hand, learned counsel appearing for the respondent by supporting the order of the Ombudsman submitted that the request of the petitioner for grant of additional load was accepted subject to deposit of an amount of Rs.52,38,095/- vide Ext.P1 under five (5) heads including upto date interest and to execute a bank guarantee for an amount of Rs.3,13,27,568/- **WP(C) NO. 16793 OF 2010** **6** towards the arrears up to the litigation. 8. Entire demands raised have been duly justified and noticed by both the authorities. Concurrent findings of the fact cannot be looked into by re-appreciating the evidence while exercising the power under Article 226 of the Constitution of India as writ court should be circumspect for causing interference unless there is gross illegality or misdirection or non compliance of the principles of natural justice. Petitioner was duty bound to disclose the pendency of the writ petition bearing No.19417 of 2009 whereby demand of Rs.38,07,683/- qua the interest on ten (10) installments in respect of the consumption for the period the CTPT remained defective. Regulation 24(5) of the Kerala Electricity Supply Code 2005 permitted the licencee to review demand if the consumer was under charged. 9. I have heard the learned counsel for the parties and appraised the paper book. 10. Section 6 of the Kerala State Electricity Surcharge (Levy and Collection) Act, 1989 reveals that any sum due on account of surcharge shall be deemed to be in arrears with interest only at the rate of twelve percentage per annum that can be recovered only either through a Civil Court or as an arrear of land revenue. 11. It is a matter of record that this Court vide judgment **WP(C) NO. 16793 OF 2010** **7** dated 19.12.2016 in W.P.(C) bearing No.19417 of 2009 as submitted above, had already set aside the demand of Rs 36,41,857/- charging the interest on account of failure of the petitioner to deposit installments without interest. Operative part of the judgment reads as under: 9. The demand for interest in Ext.P6 is made under Clause 32(g) of Conditions of Supply of Electrical Energy, 1990,which provides that interest shall not be charged for the arrears of energy charge, on account of delayed meter reading and consequential delay in issue of invoice. Clause 32(g)reads as follows: “If the arrears of dues are permitted to be paid in instalments by competent authority, the interest for the arrears shall be paid in full along with first instalment. Interest shall not be charged for the arrears of energy charge due to delayed meter reading and consequent delay in issue of invoice,provided the consumer remits the amount on or beforetheduedatefixedbytheBoard.” (emphasissupplied) 10. In this case the meter was faulty from 1992 onwards and it continued in the same position till the petitioner itself installed CTPT at their expense in the year 1995. From Exts.P1and P2 itself can be seen that the bill was issued onlyintheyear 1994. The delay in issuing the bill was on account of the delayed meter reading i.e when the meter remained faulty. The respondents while referring to Clause 32(g)for demanding interest, shut their eyes to the second part of that provision, by which interest is exempted for the faulty meter period and goes on demanding the same illegally even upto 2009. The respondent Board does not have any right to realise interest,merely because instalment facility was allowed. Clause32(g) does not provide for realisation/payment of interest in a case when meter is faulty, even if instalment facility is granted for paying the arrears on the basis of the billsissuedintheyear1994, i.e., by Exts.P1 and P2. 11. The learned counsel for the respondents submitted that the Ext.P4 complaint filed by the petitioner against Ext.P3has already been decided by the Consumer Grievance Redressal Forum and orders passed in that complaint 27.07.2009 is produced as Ext.P3 in writ petition No.16793 of 2010. According to the learned counsel for the respondents when the Forum had already considered the matter, this Courtcannot under Article 226 of the Constitution of India **WP(C) NO. 16793 OF 2010** **8** considerthese issues especially when the petitioner had taken up thematter before the Ombudsman. It is pointed out that theOmbudsman had set aside the order passed by the ConsumerGrievance Redressal Forum to the extent it related to the demand relating to a sum of Rs.4,74,375/- only because of the pendency of the writ petition. 12. The learned counsel for the respondents relying on the judgment of this Court in Eminent Sea Foods (P) Ltd. v. Kerala State Electricity Board and others [2008 (2) KHC 317] argued that when there is a statutory remedy available,issue cannot be decided under Article 226 of the Constitution of India. The judgment in Abdul Nazer v. K.S.E.B (2006 KHC 250) was also relied on in support of the contention that Section 56(2) of the Indian Electricity Act, 2003 is only having retrospective effect and it cannot be applied in the case of the petitioner when the matter relates to the period prior to 2003. 13. Regarding the applications of clause 32(g) of the Conditions of Supply of Electrical Energy, it is argued that the said provision provides for interest when arrears of dues are permitted to be paid in instalments and interest shall be paid along with the first instalment itself. The subsequent provisions regarding the delayed meter reading and consequent delay in issue of invoice and exemption from payment of arrears energy in such circumstances, cannot be read separately according to the respondents. Contention is that in a case where instalment facilities allowed by the competent authority interest is liable to be paid along with the first instalment and provision in the subsequent part of clause (g) is not applicable in a case where instalment facilities allowed. 14. But I am unable to accept the said argument. In case interest was liable to be paid even in cases where there is delayed issue of invoice on account of delayed meter reading, there should not have been a provision as contained in clause (g) separately. First part of clause (g) can be operated only in a case where the delay in issue of invoice is not on account of delayed meter reading and in a case where the arrears became due for energy charges on account of the delayed meter reading, I have already found that there was delayed meter reading. The respondents cannot also raise any contention that there was no delay. The meter was faulty and it was replaced by the petitioner himself after repeated request and the delay was caused on account of that. It is evident from Exts.P1 and P2 orders of respondent. 15. Further contention that this Court cannot go into this questions which involves technical matters cannot also be accepted since this Court is called upon to decide on the **WP(C) NO. 16793 OF 2010** **9** question of law only with respect to the interpretation of clause 32(g). The fact that the matter was pending before the Consumer Grievance Redressal Forum at the time when the writ petition was filed does not stand in the way of this Court in considering the issue. The petitioner approached this Court when coercive proceeding were initiated and orders were not passed by the Consumer Grievance Redressal Forum, after hearing was over and orders were reserved. Interim order was passed by this Court in the year 2009 itself in the above circumstances. Therefore availability of the statutory remedy cannot stand in the way of this Court in exercising its jurisdiction under Article 226 of the Constitution of India in such matters. 16. In this view of the matter, there is no basis for demanding interest from the petitioner as against the amount demanded in Ext.P2, which the petitioner had already paid as early as in January, 1995. It is after a period of 10 years of the payment, that the respondents have come with a strange demand. Moreover petitioner has asserted that it has not availed any One Time Settlement scheme and the same is not disputed. As the petitioner has already made payment as per Ext.P2. In terms of clause 16(b) of Ext.P7 agreement the petitioner is entitled to rebate for the period during which the petitioner was under lock out. Therefore the demand for Rs.1,95,734/- in Ext.P6 is also not sustainable. In these circumstances, there is no basis for the demand in Ext.P6. Accordingly, Ext.P6 is set aside. The writ petition is allowed. 12. The licensee had been silent in raising the demand as contained in Ext.P1 till petitioner submitted a request for increase of the load. Such exercise is wholly impervious. It is also matter of record that the CTPT meter remained defective with effect from 1.8.1992 and with permission was replaced by the petitioner at his own cost in April 1995. Till such time, they have been charging the amount on average and the demand with interest, as noticed above, had been quashed. Now the question which arises is **WP(C) NO. 16793 OF 2010** **10** whether the order of the Ombudsman in the absence of appeal by licensee in respect of the case of the petitioner, particularly, demand No.1 rejecting in total, the claim No.1 which was partially allowed by the CGRF is permissible, answer is No, for, there was no fault on the petitioner in replacing the meter which exercise ought to have been done by the licensee. As regards the arrears pertaining to 75:25 issue, government had already granted a concession to the industry association to charge electricity at Kerala rates, for, it was importing the electricity from outside at a higher rate, which was permitted to be deposited in installments with a condition of interest @ 24% on failure. It is a matter of record that vide Ext.P6 dated 9.2.1994 there was no failure for not depositing all installments towards interest, thus, it is impermissible for the licensee to charge interest @ 20% on Rs.4,74,375/- till 2004 amounting to Rs.38,07,683/-. The 3[rd] and 4[th ] demands were fully unjustified. As regards the 5[th] head, Board charged the 24% from 1992 till 2004 and 18% till 1992, interest on the surcharge whereas the charge under surcharge as per the provisions of the Section 6 extracted above, is only permissible at the rate of 12%. 13. Many writ petitions were filed in this Court challenging the surcharge and matter ultimately reached the Supreme Court **WP(C) NO. 16793 OF 2010** **11** which were dismissed and therefore the surcharge amount in installments permitted by the Board was deposited. There was no willful delay and latches on the part of the petitioner in making the payment and therefore the interest of Rs.25,72,897/- could not have been imposed. The licensee is only a collecting agency of surcharge for the Government. It is impermissible for the Board to demand amount, allegedly due, after a decade. There was no willful default on behalf of the petitioner in making the payment of surcharge as it was interdicted by an interim order. The reply of the Board do not reveal that at any point of time, the delayed interest, was paid by the licensee/Board to the Government. It is a matter of record that the petitioner had deposited an amount of Rs.52,38,095/- as demanded for the reason that they were in need of a higher demand. As an upshot of my findings, the order of the Ombudsman is set aside. The demand raised by the Electricity Board is quashed. The amount deposited by the petitioner is directed to be adjusted in future deposits. Sd/- sab **AMIT RAWAL JUDGE** **WP(C) NO. 16793 OF 2010** **12** PETITIONER'S EXHIBITS: Exhibit P1 True copy of the communication issued by the 2nd Respondent to the Petitioner dated 14-10-2005. Exhibit P2 True copy of the letter from the petitioner to the 2nd Respondent dated 2-11-2005. Exhibit P3 True copy of Order dated 27-7-2009 issued by the Consumer Grievances Redressal Forum, Central Region, Ernakulam Exhibit P4 True copy of representation filed by the petitioner before the 3rd Respondent dated 17-8-2009 ExhibitP5 True copy of order dated 17-2-2010 of the 3rd respondent. ExhibitP6 True copy of the letter dated 9-2-1994 issued by the 2nd respondent. Exhibit P6a True copy of letter dated 15-2-1994 issued by the 2nd respondent. Exhibit P7 True copy of order dated 20-7-2006 of the Kerala state Electricity Regulatory Commission, Thiruvananthapuram Exhibit P8 True copy of demand dated 15.6.2009 issued by the 1[st] respondent