M/S Indus Motors Company v. Kerala State Electricity Board

W.P.(C) No. 13642/2011 : 1 : ## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE SHAJI P.CHALY THURSDAY, THE 25TH DAY OF MARCH 2021 / 4TH CHAITHRA, 1943 ## WP(C).No.13642 OF 2011(E) ## PETITIONER: M/S.INDUS MOTORS COMPANY THIRUVANANTHAPURAM,REP.BY ITS MANAGER (LEGAL), INDUS MOTOR CO.PVT. LTD., CORPORATE OFFICE,, THEVARA, PERUMANOOR PO,ERNAKULAM, KOCHI -15. BY ADV. SRI.D.AJITHKUMAR ## RESPONDENTS: - 1 KERALA STATE ELECTRICITY BOARD REP.BY ITS SECRETARY,VAIDYUTHI BHAVAN,PATTOM,, THIRUVANANTHAPURAM – 695 004. - 2 DEPUTY CHIEF ENGINEER, KERALA STATE ELECTRICITY BOARD,ELECTRICAL CIRCLE (URBAN), POWER HOUSE BUILDING, THIRUVANANTHAPURAM – 695 036. ## 3 THE ASSISTANT ENGINEER KERALA STATE ELECTRICITY BOARD, ULLOOR, MEDICAL COLLEGE, THIRUVANANTHAPURAM - . - 4 THE ASSISTANT EXECUTIVE ENGINEER ELECTRICAL SUB DIVISION,KESAVADASAPURAM,, THIRUVANANTHAPURAM – 695 005. R1 BY ADV. SMT.P.K.RADHIKA, SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25-03-2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No. 13642/2011 : 2 : ## **Dated this the 25[th] day of March, 2021.** ## **JUDGMENT** This writ petition is filed by the petitioner, who is running an automobile workshop at Kumarapuram, Thiruvananthapuram seeking to quash Exs.P2, P4, P7, P8, P9 and P10 proceedings/demands issued by the Kerala State Electricity Board/appellate authority on account of the alleged unauthorised use of electricity guided by Section 126(6) of the Electricity Act, 2003 (36 of 2003) as amended from time to time. 2. Brief material facts for the disposal of the writ petition are as follows: On 08.03.2010, the officials of the respondent Board conducted an inspection and found an unauthorised load of 36 KW, pursuant to which Ext. P2 order of assessment was issued for an amount of Rs.13,98,455/-. The petitioner, being aggrieved, has submitted Ext. P3 objection and as per which, the Assistant Engineer, Kerala State **—** Electricity Board Ltd., Medical College, Thiruvananthapuram third respondent, has issued Ext.P4 order of final assessment partially modifying Ext. P2 provisional assessment order by fixing an amount of Rs.13,17,655/- and accordingly, issued a demand notice directing the petitioner to pay the said amount on or before 10.05.2020. Against W.P.(C) No. 13642/2011 : 3 : Ext. P4 order of assessment, the petitioner has filed Ext. P5 appeal before the Deputy Chief Engineer, KSEB Ltd. under Section 127 of the Act, 2003 and along with the same, an amount of Rs.6,58,827.50 was remitted towards 50% of the bill amount as provided under the aforesaid statutory provision. 3. However, the case of the petitioner is that without taking into account the contentions raised in the appeal and the objection filed by the petitioner, the appellate authority has passed Ext. P7 order, but modifying Ext. P4 order of assessment holding that the period of penalisation shall be limited to one year prior to the date of inspection, and the final assessment issued vide order dated 09.04.2010 shall be calculated with short assessment from 15.06.2007 to 03/2009 and the assessment order passed by the primary authority was found to be in order. Anyhow, any short assessment was directed to be demanded separately and any interest or surcharge accrued over the final assessment for the appeal pending period was directed to be waived also. It is, thus, challenging the legality and correctness of Ext. P4 order of assessment and Ext.P7 appellate order and the consequential demands raised, the writ petition is filed. 4. The paramount contention advanced by the petitioner is that Ext. P7 order passed by the appellate authority is without application W.P.(C) No. 13642/2011 : 4 : of mind and violates all norms of fairness and justice, since the petitioner has not extended or connected or used unauthorised load in the premises. 5. According to the petitioner, the petitioner was paying regular charges for the electricity consumed and the Board has no case that any of the bills were defaulted by the petitioner. That apart, it is submitted that it is well settled that the penalty has to be limited to the fixed charge portion only, since the quantity of energy consumed at the premises is otherwise measured through the meter and the consumer charges have already been paid by the petitioner. Therefore, according to the petitioner, as per Exts.P2, P4, P7 and P9, the Board has claimed again the proportionate current charges for 11 KW for the period from 15.06.2007 to 03/2009 amounting to Rs.3,78,511/- and Rs. 37,851/- towards duty, which is absolutely illegal and arbitrary and against the law laid down by this Court in its various judgments. Therefore, according to the petitioner, the primary authority and the appellate authority have not considered the basic issues involved and as contended by the petitioner in its objection and the appeal memorandum. 6. I have heard the learned counsel for the petitioner Sri. D. Ajith Kumar and Sri. Pramod, learned counsel representing Sri. W.P.(C) No. 13642/2011 : 5 : Sudheer Ganesh Kumar, the learned Standing Counsel for the Kerala State Electricity Board, and perused the pleadings and materials on record. 7. The root cause of the issues raised in the writ petition is Ext. P4 order of final assessment on account of the unauthorised connected load, consequent to Ext. P2 provisional order and the provisional assessment bill. On a perusal of Ext. P4 order dated 09.04.2010, what I could gather is that Ext. P2 provisional assessment bill dated 09.03.2010 was issued on the basis of the inspection conducted by the Anti Theft Squad on 08.03.2010. As per the site mahazar prepared by the Inspection team and their observations, the connected load of the premises was 43 KW and it was further found that the petitioner extended the power supply of 17 KW to another premises, whereas the authorised connected load of the petitioner having consumer No. 9472 in the name of one Sobha G.R was only 7 KW. 8. That apart, it was mentioned in the site mahazar that the petitioner had connected unauthorised load of 11 KW at the premises where connection was secured, which was detected by the section squad on 08.12.2006, which mahazar was witnessed and the copy was accepted by one Suresh Kumar T., Works Manager, Indus Motors. Accordingly, provisional assessment of Rs.13,98,455/- was made, to W.P.(C) No. 13642/2011 : 6 : which the petitioner had submitted an objection challenging the method of calculation and the period taken for calculating the provisional assessment bill and contending that there was no additional load in their premises and the petitioner did not extend the power supply from their workshop to any other premises. Thereupon, a personal hearing was provided to the petitioner by the primary authority and arrived at the final conclusions, wherein it was found as follows: “The consumer fails to produce the installation details of Air Conditioners date. It is also noted that the unauthorised extension to the new Service Centre is disconnected and the matter was informed to this office on 08-042010 vide letter referred 4 above. On reviewing the argument of Consumer on personal hearing, verification of site mahasar, documents produced by the consumer and the rules and regulations in force. It is observed that the connected load taken by the squad was very accurate and as per rule. The connected load taken by the squad was as per the prevailing rules of KSEB. On verifying the site mahazar, it is observed that the Vacuum cleaner and the AC recycling machine are connected on KSEB Supply at the unauthorized extended area of the workshop at the time of inspection. Considering the above facts and accepting the documents produced by the consumer, the undersigned hereby ordered to revise the connected load and period of the provisional assessment bill as follows: 1. The connected load of the lift motor is taken as an unauthorised extension from 10/2009 onwards only. The revised calculation statement is also attached herewith for reference: In this final order you are requested to remit the amount as per the final demand notice within 30 days of receipt of this notice. It is informed that if you have any objection in this order you may file an appeal against this within 30 days before the appellate authority W.P.(C) No. 13642/2011 : 7 : (Deputy Chief Engineer. Electrical Circle, Thiruvananthapuram (Urban) as per the provision of Section 127 of Electricity Act, 2003 after remitting 50% of the final demand notice and the appeal fee as per Rule. And it is also informed that you should regularise the unauthorised additional load within the time stipulated (three months) and till that this penalisation will be continued. So you are requested to act as per this final order and accompanied demand notice, failing which the supply to your premises will be disconnected without further intimation. It is also informed you that the sanction of the Generator installed in our premises from the Electrical inspectorate should produce before this office within one month. ## **CALCULATION STATEMENT OF FINAL BILL** Consumer Number : 9472 Tariff Tariff : LT VIII A Sanctioned Connected Load : 6439 Watts =7 KW Actual connected Load as on Inspection : 42810 Watts = 43 KW Unauthorized extension of energy : 16892 Watts = 17 KW 1) Unauthorized Connected Load : 43KW-7KW- 36 KW a) Penal FC for Unauthorized Connected Load for 36 KW for One year ( Penal FC for 11KW was already paid) = 36 KW-11KW=25KW Fixed Charge : 25 KW X 100 (FC) X 2 times x 12 month - Rs.60,000.00 Unit Consumed by the consumer during last 12 Month (04/09-03/010)- 40682 Units. Proportionate unit = 40682 x 36/43- 34059 Units. b) Proportionate Current Charge-34059 Unit x Rs.8.05 = Rs.2,74,175.00 c) Electricity Duty -Rs.27,418.00 Penal FC for 11 KW for the period from 15-06-07 to 03/09 was already paid by the consumer Proportionate Current Charge for 11 KW for the period from 15-6-07 to W.P.(C) No. 13642/2011 : 8 : 03/2009 Unit Consumed by the Consumer during the period {15/6/07 to 03/2009) =76941 units Proportionate unit = 76941x11/18 = 47020 units . d) proportionate CC 47020 units x 8.05 = Rs 378511.00 e) Duty -Rs. 37851.00. 1. Unauthorized Extension of Energy =17 KW for 163 days( from 26-09-09 to 08-03-10) 2. Unauthorized Extension of Energy- 13 KW for 202 days ( Upto 26-09-2009) f) Penal FC under LT VIII Tariff = 17KW x Rs.50x2 timesx163days =13KWX x Rs.50 x 2 times x 202 days = Rs.5,39.700.00. Total Amount to be Remitted = 60,000+ 2,74,175 + 27,418+ 3,78,511+ 37.851 + 5,39,700 = Rs. 13,17,655.00 (Rupees Thirteen Lakh Seventeen Thousand Six Hundred and Fifty five only)” 9. The objections to the provisional assessment were raised in the appeal and the appellate authority, after taking into consideration the entire pros and cons of the matter and after providing an opportunity of hearing to the petitioner, modified the assessment and passed the following order: “V. On reviewing the appeal the averments and arguments and the documents produced with the rules and regulations in force, the Appellate Authority observes as follows:- 1. The short assessment resulted out of the change in the method of assessment should not have been included along with the assessments W.P.(C) No. 13642/2011 : 9 : made under Section 126 of the Electricity Amendment, subsequent to an inspection on 08.03.2010. 2. The appellant could not produce any evidence for reducing the alleged unauthorised additional load and the unauthorised extension. 3. The assessment made is as per Section 126(6) of the Electricity Act, 2003 and the Electricity (Amendment) Act, 2007. 4. As per Section 126(6) b, v of the Electricity (Amendment) Act, 2007, unauthorised extension also constitute unauthorised use of electricity and as per Section 126(6), the assessment shall be made at a rate equal to twice the tariff applicable and in the case of extension the tariff applicable is LT VIII. VI. Based on these observations the Appellate Authority orders as follows. 1) The Procedures adopted by the respondent are as per Section 126 of the Electricity Act and the Electrical (Amendment) Act, 2007. 2) The period of penalisation shall be limited to 1 year prior to the date of inspection. The final assessment issued vide the final order No. DB 55/UAL/Uloor/10- 11/05/09.04.2010 shall be excluded with short assessment from 15.06.07 to 03/2009 and the rest of the final order are in order. Any short assessment shall be demanded separately. 3) Any interest or surcharge accrued over the final assessment for the appeal pending period shall be waived.” 10. I have evaluated the contentions put forth by the learned counsel for the petitioner as well as the learned Standing Counsel for the Board. The subject issue is guided by Section 126 of the Act, 2003, which reads thus: "126. Assessment: **—** (1) If on an inspection of any place or premises or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection of records maintained by any person, the assessing officer comes to the conclusion that such person W.P.(C) No. 13642/2011 : 10 : is indulging in unauthorised use of electricity, he shall provisionally assess to the best of his judgment the electricity charges payable by such person or by any other person benefited by such use. (2) The order of provisional assessment shall be served upon the person in occupation or possession or in charge of the place or premises in such manner as may be prescribed. (3) The person, on whom a notice has been served under Sub-section (2) shall be entitled to file objections, if any, against the provisional assessment before the assessing officer, who shall, after affording a reasonable opportunity of hearing to such person, pass a final order of assessment within thirty days from the date of service of such order of provisional assessment of the electricity charges payable by such person. (4) Any person served with the order of provisional assessment may, accept such assessment and deposit the assessed amount with the licensee within seven days of service of such provisional assessment order upon him; (5) If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorised use of electricity has taken place and if, however, the period during which such unauthorised use of electricity has taken place cannot be ascertained, such period shall be limited to a period of twelve months immediately preceding the date of inspection. (6) The assessment under this Section shall be made at a rate equal to twice the tariff applicable for the relevant category of services W.P.(C) No. 13642/2011 : 11 : ## specified in Sub-section (5). 11. Therefore, on a reading of the said provision, it is clear that if the Assessing Officer comes to the conclusion that any consumer is indulging in unauthorised use of electricity, he has to issue a provisional assessment to the best of his judgment in regard to the electricity charges payable by such consumer or by any other person benefited by such use. The procedure shows that the petitioner has a right to file objection and thereafter, the final assessment order is to be passed by the assessing officer. Sub-Section (6) of Section 126 makes it clear that the assessment under the provision shall be made at a rate equal to twice the tariff applicable for the relevant category of services specified in sub-Section (5), which specifies that if the assessing officer reaches any conclusion that the unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorised use of electricity has taken place, however, for the period during which such unauthorised use of electricity is unable to be ascertained, such period shall be limited to a period of 12 months immediately preceding the date of inspection. 12. On an analysis of the issue by correlating the same with the provisions of Section 126 of Act, 2003, the Assessing Officer has found W.P.(C) No. 13642/2011 : 12 : that there was unauthorised connected load on the basis of the additional use of machineries and unauthorised extension and thereupon, assessed double the amount in contemplation of subSection (5) of Section 126. However, the appellate authority has found that the penalisation shall be limited to one year alone, which has become final, insofar as the Board is concerned. In my considered opinion, the findings rendered by the primary assessing authority in regard to the unauthorised connected load on two counts specified above were based on the absolute finding of facts and in terms of the provisions of Section 126. However, the learned counsel has invited my attention to a decision of a Division Bench of this Court in _**Sulabha Marketing (P) Ltd. v. Kerala State Electricity Board [**_ 2017 (2) KLT SN 77 (C.No. 108) and specifically to paragraph 31, which reads thus: “31. For the reasons stated hereinbefore, we hold as follows; (i) The presence of the assessing officer at the time of inspection and detection of unauthorised use of electricity in the premises of a consumer is not a mandatory requirement for initiating assessment proceedings under Section 126(1) of the Act. (ii) The expression 'unauthorised use of electricity' under Section 126 of the Act deals with cases of unauthorised use even in the absence of intention. Hence, the intention of the consumer is not the foundation for invoking powers of the competent authority and passing of an order of assessment under Section 126 of the Act. W.P.(C) No. 13642/2011 : 13 : (iii) Whenever a consumer commits the breach of the terms of the agreement, Regulations and the provisions of the Act by consuming electricity in excess of the sanctioned/connected load, such consumer would be in blame and under liability to pay at the rate equal to twice the tariff applicable for the relevant category of services in terms of Section 126 of the Act. (iv) The term 'tariff' in Section 126(6) of the Act includes both fixed charges and charges for the electricity supplied, which has to be assessed in the case of a consumer indulged in unauthorised use of electricity, at a rate equal to twice the tariff applicable for the relevant category of services specified in sub-section (5). (v)In case of unauthorised use of electricity in a higher tariff, such assessment shall be made at the rate equal to twice the tariff applicable for the relevant category of services attracting such higher tariff for which electricity supplied was unauthorisedly used and not the relevant category of service to which the consumer belongs. (vi) However, in the case of a consumer, who is blamed with overdrawal of electricity in excess of sanctioned/connected load in the very same premises and for the very same purpose, which do not involve any change in tariff applicable for the relevant category of services, which consumption has already been metered and paid by the consumer, since such usage being not by any artificial means or through a tampered meter, assessment under Section 126(6) of the Act can only be equal to twice the fixed charges payable and such consumer cannot be saddled with the liability to pay twice the energy charges applicable for the relevant category of services, unless regularisation of such additional connected load or enhancement of W.P.(C) No. 13642/2011 : 14 : contract demand necessitates upgradation of the existing distribution system or enhancement of voltage level of supply. (vii) In all other cases falling under Explanation (b) to Section 126 of the Act, the assessing officer is empowered to assess unauthorised use of electricity at the rate prescribed in Section 126(6) and for the period specified in Section 126(5), as amended by the Electricity (Amendment) Act, 2007 for both fixed charges and energy charges. Penalty charges for current charges shall be levied for proportionate energy charge and normal current charge collected shall be deducted. (viii) Though Regulation 51(1) of the Conditions of Supply, 2005 employs the term 'penalised', what is contemplated under the said Regulation is only assessment of unauthorised use of electricity in terms of Section 126 of the Act for the period specified in Section 126(5) and at the rate specified in Section 126(6) of the Act. As such, Regulation 51(1) of the Conditions of Supply, 2005 is neither ultra vires the provisions of Section 126 of the Act nor unenforceable. (ix) What is contemplated under Board Order dated 7.2.2008 is only assessment of unauthorised use of electricity in terms of Section 126 of the Act, as amended by the Electricity (Amendment) Act, 2007, for the period specified in Section 126 (5) and at the rate specified in Section 126(5) of the Act. As such, the said Board Order is neither ultra vires the provisions of Section 126 of the Act nor unenforceable.” 13. Relying upon the sub paragraph (v) thereto, it was contended by the learned counsel that in the case of unauthorised use of electricity in a higher tariff alone, such assessment shall be made at W.P.(C) No. 13642/2011 : 15 : the rate equal to twice the tariff applicable for the relevant category of service attracting such higher tariff for which electricity supply was unauthorisedly used and not to the relevant category of service to which the consumer belongs and therefore, according to the learned counsel, the method adopted by the assessment officer and the appellate authority for calculation of the amount cannot be sustained under law. 14. But on a reading of sub paragraphs (vi) and (vii) and other findings rendered by the Division Bench in _**Sulabha Marketing Pvt. Ltd.**_ , (supra) I find that the calculations made by the assessing officer as well as the appellate authority was in accordance with law in the facts and circumstances of the case and absolutely in terms of Section 126 (5) and (6) of Act, 2003. The appellate authority has also confined the penalisation limited to one year prior to the date of inspection and thereby, the petitioner was benefited substantially. As pointed out above, the issues were resolved by the authorities by assimilating various factual circumstances and providing sufficient opportunity of participation to the petitioner, and therefore the interference of the writ court would be very slow normally, which is a very well settled legal position. Petitioner has not made out or established any extraordinary situation so as to exercise the power of W.P.(C) No. 13642/2011 : 16 : judicial review conferred under Article 226 of the Constitution of India. Needless to say, the writ petition fails and accordingly, it is dismissed. sd/- **SHAJI P. CHALY, JUDGE.** _Rv_ W.P.(C) No. 13642/2011 : 17 : ## **APPENDIX** ## PETITIONER'S EXHIBITS: EXT.P1: TRUE COPY OF THE MAHAZAR OF THE ABOVE INSPECTION. EXT.P2: TRUE COPY OF THE PROVISIONAL ASSESSMENT OF THIRD RESPONDENT DATED 09.03.2010. EXT.P3: TRUE COPY OF THE OBJECTION DATED 16.03.2010 AGAINST EXT.P2 PROVISIONAL ASSESSMENT FILED BY THE PETITIONER. EXT.P4: TRUE COPY OF THE ASSESSMENT BILL DATED 09.04.2010 OF THE 3RD RESPONDENT. EXT.P5: TRUE COPY OF THE APPEAL NO.65 OF 2010 FILED BY PETITIONER BEFORE THE SECOND RESPONDENT. EXT.P6: TRUE COPY OF THE OBJECTION TO EXT.P4 ASSESSMENT BEFORE THE SECOND RESPONDENT FILED BY THE PETITIONER. EXT.P7: TRUE COPY OF THE ORDER DATED 16.04.2011 OF THE SECOND RESPONDENT. EXT.P8: TRUE COPY OF BILL DATED 02.05.2011 ISSUED TO THE PETITIONER FOR AN AMOUNT OF RS.2,42,466/-. EXT.P9: TRUE COPY OF THE BILL DATED 30.04.2011 FOR AN AMOUNT OF RS.4,16,362/- ISSUED BY THE THIRD RESPONDENT. EXT.P10: TRUE COPY OF ORDER NO. B.O.(FM) NO.368/2008 (DPC 1/C-G1/182/2007 DATED 07.02.2008 ISSUED BY THE RESPONDENT BOARD. ## RESPONDENTS' EXHIBITS: NIL /True Copy/ rv PS To Judge.