M/S.K.S.E. LTD., Dairy Division, Konikkara, Thrissur District v. Kerala State Electricity Board and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE S.SIRI JAGAN** **WEDNESDAY, THE 15TH JUNE 2011 / 25TH JYAISHTA 1933** **WP(C).No. 12538 of 2007(P)** **----------------------------------------** ## **PETITIONER(S):** **------------------------** **M/S.K.S.E. LTD., DAIRY DIVISION, KONIKKARA, MARATHAKKARA P.O., THRISSUR DIST, REPRESENTED BY ITS SECRETARY CUM-CHIEF FINANCE MANAGER R.SANKARANARAYANAN.** **BY ADVS. SRI.J.JULIAN XAVIER SRI.FIROZ K.ROBIN SRI.ROY JOSEPH SMT.M.S.SOUJATH** ## **RESPONDENT(S):** **--------------------------** **1. KERALA STATE ELECTRICITY BOARD, REPRESENTED BY ITS SECRETARY, VYDUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM.** **2. DEPUTY CHIEF ENGINEER, KERALA STATE ELECTRICITY BOARD, PATTOM, THIRUVANANTHAPURAM.** **3. SPECIAL OFFICER (REVENUE), VYDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM.** **4. THE KERALA STATE ELECTRICITY REGULATORY COMMISSION, 30, PARAMESWARA BHAVAN, BELHEAVEN GARDENS, KAWDIAR, THIRUVANANTHAPURAM.** **R1 TO R3 BY ADV. SRI.P.P.THAJUDEEN, SC, K.S.E.B SRI.JOSE J.MATHEIKAL** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **2/-** **sts** **-2-** ## **WP(C)NO.12538/2007** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** - **P1 COPY OF THE CERTIFICATE DATED 26/4/2005 ISSUED BY THE DIRECTOR, REGISTERING AUTHORITY.** - **P2 COPY OF THE BILL FOR THE MONTH OF 2/2007.** - **P3 COPY OF THE ORDER DATED 12/9/2006 ISSUED BY THE KERALA STATE ELECTRICITY REGULATORY COMMISSION, THIRUVANANTHAPURAM.** - **P4 COPY OF THE INTERIM ORDER DATED 29/3/2007 IN WP(C)NO.10488/2007.** - **P5 COPY OF THE BOARD ORDER DATED 19/12/2006.** ## **RESPONDENT'S EXHIBITS: NIL** ## **/TRUE COPY/** ## **P.A.TO.JUDGE** **sts** ## **S. SIRI JAGAN, J.** **- - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No.12538 of 2007** **- - - - - - - - - - - - - - - - - - - - - - - Dated this the 15[th] day of June, 2011** ## **J U D G M E N T** The petitioner is a company engaged in the business of manufacturing and processing milk and milk products. The petitioner is a consumer of electricity from the Kerala State Electricity Board for the purpose of their business. The petitioner is classified as a High Tension (HT) consumer. From the start of the industry, till January 2007, the petitioner was being charged to electricity under HT-I Industrial Tariff. But suddenly, from February 2007 onwards, the Board started demanding electricity charges under HT IV Commercial Tariff. The petitioner challenged the same by filing W.P. (C) No.10488/2007 and this Hon'ble Court granted an interim stay. The petitioner later came to understand that the change in the tariff was as per Ext.P5 Board Order dated 19.12.2006. In the above circumstances, the petitioner thought it necessary to W.P.(C)No.12538 of 2007 **-2-** challenge Ext.P5 Board Order also and accordingly this writ petition has been filed seeking the following reliefs: - “i. To call for the records connected with the case leading to Exts.P5 and quash the same by issuing a writ of certiorari. - ii. To declare that the interpretation given in Ext.P5 is against Ext.P3 order passed by the Regulatory Commission.” 2. According to the petitioner, the question as to whether Milk Marketing Societies would come under which electricity tariff was decided by the Kerala State Electricity Regulatory Commission by Ext.P3 order in the case of MILMA and held that such Societies are liable to pay electricity charges only under HT-I, Industrial category. That order was passed on 12.09.2006. Insofar as under the new Electricity Act it is the Electricity Regulatory Commission which is competent to resolve such disputes, once that dispute is resolved by the Commission, the Board cannot pass an order contrary to the decision of the Kerala State Electricity Regulatory Commission is the contention of the petitioner. The petitioner points out that in W.P.(C)No.12538 of 2007 **-3-** ## **Sainalabdeen v. Kerala State Electricity Board [2006** **(1) KLT 529]** it has been held that it is the Regulatory Commission who has to decide such disputes and not the Board. The petitioner further submits that in view of that legal position a learned Judge of this court had disposed of the earlier writ petition filed by the petitioner, namely W.P. (C) No.10488/2007 in favour of the petitioner holding that the petitioner is liable to pay electricity charges only under HT-I Industrial tariff. 3. No counter affidavit has been filed by the Electricity Board. 4. I have heard both sides. 5. It is not in dispute before me that Ext.P3 order has been passed by the Kerala State Electricity Regulatory Commission in respect of the Kerala Co-operative Milk Marketing Federation which is an identically situated Milk Marketing Society. In W.P. (C) No.10488/07 & connected cases filed by the petitioner themselves, a learned Judge of this court has held as follows: W.P.(C)No.12538 of 2007 **-4-** “The prayer in the Wps. is only for direction to the KSEB to bill petitioner at the industrial tariff, HT I in terms of Ext.P3 order of the Kerala State Electricity Regulatory Commission. Ele. Board has not disputed the Regulatory Commission's order issued on 12.9.2006. In the circumstances, W.Ps. are allowed directing the respondents to change the petitioner's tariff to HT I, revise the bills and recover the amount at the said rate. There will be further direction to the respondents to raise future bills only at HT I tariff.” ## 6. Earlier learned Judge of this court had in the same writ petition while refusing to vacate the interim order held as follows: “Heard. On the strength of order of Regulatory Commission, which is produced in W.P.(C) 6783 of 2007 as Ext.P3, this Court already granted interim order in favour of the petitioners. But, the K.S.E.B. has filed a counter affidavit in one of the writ petitions and moved for vacating the interim order. According to it, going by the Tariff Order, only dairy farms are entitled to be treated as covered by HT-I Tariff. Chilling units will come under HT-IV tariff. The learned Standing Counsel for the K.S.E.B. Pointed out that in the light of the said Tariff Order, the order of the Commission has to be interpreted. It is also pointed out that major activity of the dairy plants of the petitioners is to pasteurise milk, fill it in plastic packets and sell the same. It it not manufacturing activity, in the light of the decision of this Court in **Pooja Milk Foods (P) Ltd. Vs. State of Kerala (2003 (3) KLT 1063)** , it is submitted. 2. The learned counsel for the petitioners, on the other hand, submitted that as long as Ext.P3 remains in force, the above contentions cannot be accepted. Special reference is made to para 3.3. and 3.4 of Ext.P3 order of the Commissioner exhibited in W.P.(C) 6783 of 2007. The said clauses reads as follows: “3.3. The activity of dairies engaged in production of milk and milk products is essentially a manufacturing activity. Reference is made to Clause 1520, manufacturing of dairy products under Section D of manufacturing category of the W.P.(C)No.12538 of 2007 **-5-** United Nations International Standard Industrial Classification (UN ISIC). The Ministry of Statistics and Programme Implementation, Government of India had also adopted and developed the Standard Industrial and Occupation Classification on the basis of the UN International Standard Industrial Classification (ISIC) of all Economic Activities. 3.4 The Stand alone chilling and cold storage units operated in separate premises engaged in non-manufacturing activity and availing separate HT service connections shall be treated as Commercial units.” A combined reading of the above clauses would show that the chilling or cold storage units attached to the units engaged in the production of milk and milk products will be covered by HT-I Tariff. But, chilling and cold storage units in separate premises having separate HT connection shall be treated as commercial units. As per Section 86 (1) (a) of the Electricity Act, 2003, the Commission is conferred powers to determine the tariff applicable to various consumers. The said provision cloths the Commission with necessary power to decide any dispute between the consumer and the licensee as to the tariff applicable to the establishment of the consumer. 3. I feel that as long as Ext.P3 remains in force, the K.S.E.B. is bound by that. The case of the petitioners is that chilling/freezing/cold storage units are not separate units, but are integral part of the unit manufacturing milk and milk products. Therefore, prima facie, I am satisfied that the Tariff applicable to the petitioners' until is HT-I Industrial category. Accordingly, the motion made by the K.S.E.B. to vacate the interim order is rejected. The interim order is extended by three months.” I am in full agreement with the view expressed by the two learned Single Judges. In any event in view of the decision in **Sainalabdeen** 's case, when the Kerala State Electricity Regulatory Commission has taken a decision on the tariff W.P.(C)No.12538 of 2007 **-6-** applicable to Milk Marketing Societies, the Board cannot pass an order contrary to the decision of the Commission. In the above circumstances, I am satisfied that Ext.P5 order is clearly unsustainable. Accordingly the same is quashed. The writ petition is allowed as above. Sd/- S. SIRI JAGAN JUDGE //True copy// P.A. TO JUDGE shg/