P.X. Joseph v. Kerala State Electricity Board, BSNL, Jerry Varghese International Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE SMT. JUSTICE P.V.ASHA** ## **SATURDAY, THE 20TH DAY OF SEPTEMBER 2014/29TH BHADRA, 1936** ## **WP(C).No. 28401 of 2009 (U)** **----------------------------** ## **PETITIONER(S):** **--------------------------** **P.X.JOSEPH, AGED 63 YEARS, S/O.LATE XAVIER, CONSUMER NO.7709, ANJALI COMPLEX NEAR SOUTH OVER BRIDGE, COCHIN-682 016, KERALA.** **BY ADVS.SRI.A.P.SUBHASH SRI.M.A.ABDUL SHUKOOR** ## **RESPONDENT(S):** **----------------------------** **1. KERALA STATE ELECTRICITY BOARD, VYDUTHI BHAVAN, THIRUVANANTHAPURAM REPRESENTED BY ITS SECRETARY.** **2. ASSISTANT ENGINEER, ELECTRICITY SECTION, COLLEGE, CLUB ROAD COCHIN-11.** **3. BHARATH SANCHAR NIGAM LIMITED, REPRESENTED BY ITS EXECUTIVE ENGINEER (E) BSNL ELECTRICAL DIVISION, ERNAKULAM.** **4. JERRY VARGHESE INTERNATIONAL LTD., 206, GATEWAY PLAZA, HIRANANDANI GARDENS POWAI, MUMBAI-400 076, REPRESENTED BY ITS MANAGING DIRECTOR, MR.MATHEW VARGHESE AND HAVING BRANCH OFFICE AT 1303/B-4, ANJALI COMPLEX, NEAR SOUTH OVER BRIDGE, COCHIN-682013, KERALA.** **R1 & 2 BY ADV. SRI.P.P.THAJUDEEN, SC, K.S.E.B R1-2 BY ADV. SMT.P.K.RADHIKA-KSEB R3 BY ADVS. SRI.C.S.RAMANATHAN SRI.MATHEWS K.PHILIP,SC, BSNL** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20-09-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).No. 28401 of 2009 (U)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P1: COPY OF LEASE DEED ENTERED INTO BETWEEN PETITIONER AND BSNL, ELECTRICAL DIVISION. EXT.P1(a): COPY OF LEASE DEED ENTERED INTO BETWEEN PETITIONER AND JERRY VARGHESE INTERNATIONAL. EXT.P2: COPY OF THE SITE MAHAZAR DATED 19.10.2005 OBTAINED FROM 3RD RESPONDENT BSNL. EXT.P3: COPY OF THE DEMAND CUM DISCONNECTION NOTICE UNDER SECTION 24(1) OF INDIAN ELECTRICITY ACT DATD 25.09.2009 HAVING INVOICE NO.45.** **EXT.P4: COPY OF THE OBJECTION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXT.P5: RECENT ELECTRICITY BILL ISSUED TO CONSUMER NO.7709 DATED 28.05.09 BY THE KSEB. EXT.P5(a): RECENT ELECTRICITY BILL ISSUED TO CONSUMER NO.7709 DATED 26.03.2009 BY THE KSEB. EXT.P5(b): RECENT ELECTRICITY BILL ISSUED TO CONSUMER NO.7709 DATED 23.01.2009 BY THE KSEB. EXT.P5(c): RECENT ELECTRICITY BILL ISSUED TO CONSUMER NO.7709 DATED 28.11.2008 BY THE KSEB.** ## **RESPONDENT'S EXHIBITS:NIL** ## **/TRUE COPY/** ## **P.A TO JUDGE** ## **LSN** ## **P.V. ASHA, J.** ------------------------------------------------ W.P.(C) No. 28401 OF 2009 ----------------------------------------------Dated this the 20[th] day of September, 2014. ## **J U D G M E N T** Petitioner, who is the owner of the building by name “Anjali Complex” has, filed this writ petition challenging Ext.P3 bill issued on 25.09.2009 demanding a sum of Rs.2,37,192/- (Two lakhs Thirty Seven Thousand One hundred and Ninety Two only) praying for further directions to the respondent Electricity Board not to charge the penal rate pursuant to Ext.P3 bill. 2. According to the petitioner, the building owned by him was leased out to BSNL as per Ext.P1 and thereafter to one Jerry Varghese as per Ext.P1(a). From the officials of BSNL **,** petitioner came to know that on 19-10-2005, a surprise inspection was conducted in this building with Consumer No. 7709, by the Assistant Executive Engineer and his team under the 1[st] respondent -Kerala State Electricty Board (KSEB for short) and after inspecting the meter and connected load, Ext.P2 mahazar. was prepared . Thereafter, without any further action on it, Ext.P3 demand notice cum disconnection notice dated 25-9-2009 was issued to petitioner W.P.(C) No. 28401 OF 2009 2 demanding payment of Rs. 237192/- (two lakhs thirty seven thousand and ninety two only) before 12-10-2009 and threatening disconnection, in case the amount was not paid within the notice period. The said notice was issued under Section 24(1) of the Indian Electricity Act demanding charges for additional load 11 KW for the period from July 2005 to May 2009 along with penal charges. According to the petitioner, no notice regarding any provisional assessment was issued to him and he was not giving any intimation regarding any assessment in respect of the building with the aforesaid consumer number. Immediately on receipt of the demand notice, petitioner submitted Ext.P4 objection before the Assistant Engineer on 05.10.2009 pointing out that he was not liable to pay any amount as demanded in the notice and requesting to cancel the same. It was pointed out therein that the mahazar was seen prepared as early as on 19.10.2005. But, no provisional assessment was made in accordance with Regulation 27A of the Kerala Electricity Supply Code, 2005 (hereinafter referred to as 'the Code') which mandates that a provisional assessment shall be made in respect of the electricity charges payable, if Assessing Officer, on an inspection of W.P.(C) No. 28401 OF 2009 3 any premises, comes to the conclusion that such person is indulging in unauthorised use of electricity. He pointed out that as on 19.10.2005, when the inspection was conducted and Ext P2 site mahazar was prepared, the building was in the occupation of BSNL. He also pointed out that the procedural requirement to issue an order order of provisional assessment and to serve it on the person in occupation or in charge of the premises, enabling him to submit his objections, was not observed. Petitioner pointed out that he could not avail of the opportunity to challenge the assessment by filing an appeal provided under Regulation 27(2) of the Code, since final assessment was not made/orders issued in accordance with the provisions. Ext.P5 series of bills show that the electricity charges payable for the premises were under LT VII (A) tariff and the average charges being demanded for the premises bimonthly was about Rs.25,000/- during 2008-2009, i.e before inspection. 3. As Ext P4 objection did not yield any result, petitioner has approached this court challenging the demand notice, alleging that the demand for charges after expiry of 4 years after the inspection and without issuing any order of provisional assessment, W.P.(C) No. 28401 OF 2009 4 and without giving an opportunity to submit objections are in gross violation of Regulation 18(8) and 27A of the Code. According to Regulation 18(8), KSEB cannot recover any arrears after a period of 2 years from the date on which it fell due. The impugned action in 2009 is for recovery of charges for the period from 5/05 onwards, based on inspection held in 2005. Under Regulation 27A, the assessing officer, in case on inspection, it is found that the consumer is indulged in unauthorised use of electricity, has to issue an order of provisional assessment. Final assessment can be made only after serving a copy of the same on the occupant or person in charge of the premises and after affording him an opportunity to furnish his explanation on it. As there was no order of assessment made/issued or communicated petitioner lost his remedy of appeal also provided under Regulation 27(2). It is also submitted that there was no unauthorised load as alleged and that even as per Ext P2 mahazar, there were several items which remained unconnected. 4. The inspection was conducted in the year 2005 and Ext.P3 demand notice was issued in 2009. Regulation 18(8) provides that the licensee shall not recover any arrears after a period W.P.(C) No. 28401 OF 2009 5 of two years from the date when such sum becomes first due. He further, relies on S **ec** tion27(A)(1) of the Code, which provides that provisional assessment shall be made immediately after the inspection of the premises and the order of provisional assessment shall be served on the person in charge of the premises; an opportunity shall be given to file objections before the final assessment was made. According to the petitioner, there was no order of provisional assessment on any person. It is also submitted that there is no final order of assessment also and at any rate nobody was given an opportunity to furnish objections as against provisional assessment before final order of assessment if any was issued. In such circumstances, the petitioner says that his remedy of appeal is forclosed on account of the action of the Electricity Board. 5. The KSEB and BSNL have filed their respective counter affidavits. BSNL in its counter affidavit stated that after the issuance of the mahazar they did not receive any intimation or orders from the KSEB. It is further stated that the connected load was less than 8KW at the time when they were in occupation of the premises , as can be seen from Ext.R3(a). They submitted that they were in W.P.(C) No. 28401 OF 2009 6 occupation of the building only up to 20-8-2005 and they are not liable for payment of any amount demanded in the notice. 6. In the counter affidavit on behalf of KSEB, it is stated that they conducted a site inspection on 19.10.2005 and detected unauthorised additional load of 11KW , totaling 19 KW. It is further stated that due to some omissions the penalty was not charged in the bimonthly bills of the consumer and the same was detected by the Regional Audit Officer (RAO), Ernakulam during his inspection in Electrical Section office on 13.07.2009. The bill for Rs.2,37,193/was issued to the petitioner on 25.09.2009 for the spot bills from 7/2005 to 5/2009 including proportionate energy charge from 7/2007 to 5/2009 for the unauthorised additional load of 11KW in order to make the omission of charging the penalty. They further relied on Regulation 51(2) of the KSEB Terms and Conditions of Supply, 2005, according to which, “the penalty for unauthorised additional load shall be levied till the said unauthorised additional load is removed or regularized as per rules”. It is further stated that if the licensee establishes that it has undercharged the consumer either by review or otherwise, the Licensee may recover the amount W.P.(C) No. 28401 OF 2009 7 undercharged from the consumer by issuing a bill as per Regulation 24(5) of the Code and hence the demand was legal. 7. I heard the learned counsel for the petitioner and the learned Standing Counsel for KSEB and BSNL. 8. Learned counsel appearing for KSEB submitted that the regulations as well as the provisions in Electricity Act enables them to recover the charges found from consumer at any time. When the additional load is detected, they are entitled to realise the charges for the same from the consumer along with penalty until the excess load is regularised. 9. Learned counsel for the petitioner contended that there was no unauthorised load and that there was no evidence to show that the alleged excess load was remaining connected, in order to demand or levy any charges towards it. Relying on the judgment reported in **K.S.E.B v. Dr.S.Vidya Prakash, (ILR 2010(1) Ker 323),** it was submitted that in order to calculate the connected load, there should be evidence to show that energy consumer devices are connected to the system. In Ext.P2 site mahazar, the items found in the premises were noted as given below:- W.P.(C) No. 28401 OF 2009 8 |1.|Light Tube|-|36 Nos.| |---|---|---|---| |2.|Fan|-|31 Nos| |3.|U.P.S 5KVA|-|1 No.| ||5KVA||| ||unconnected|-|1 ''| |4.|Photo stat 1310W-||1 ''| |5.|Exhaust fan||| ||(410x2, 44x4)|-|6''| |6.|Computer|-|9''| |7.|P Plug|-|-| |8.|Plug|-|12''| |9.|Primeter 2 nos||| ||Board supply|-|7''| |10.|CFL|-|7''| |11.|Fax machine|-|1''| |12.|Bulb|-|1''| |13.|A.C Unconnected-||1''| |14.|Heater 2000W|-|1''| |15.|Bell|-|4''| 10. Therefore, according to the petitioner, the KSEB found the alleged unauthorised excess load, reckoning the items no. 3 and 13 in the mahazar prepared by KSEB, which remained admittedly W.P.(C) No. 28401 OF 2009 9 unconnected. Therefore going by Ext.P2 mahazar itself it can be seen that the impugned action is initiated towards the unconnected load detected. In the absence of any evidence as to any excess load reckoning the devices connected, the respondent Electricity Board is not justified in proceeding against the petitioner. Connected load, as defined in clause 1(n) of the Conditions of Supply of Electrical Energy, means the sum total of installed capacities of all the energy consuming devices on the consumer's premises connected to the system which can be operated simultaneously. Therefore in the light of the definition of connected load and going by the decision of this court in KSEB Vs Dr. S. Vidya Prakash, the proceedings initiated against the petitioner is not proper. 11. The next contention on behalf of the petitioner is that, there was no provisional assessment or final assessment with due notice to either the occupier or the consumer as provided under Regulation 27A of the Code. Therefore, even the statutory remedy by way of appeal could not be invoked by him if, at all there was an assessment made. Under these circumstances, the learned counsel for the petitioner submitted that the demand notice, which was W.P.(C) No. 28401 OF 2009 10 issued after a period of four years of the inspection and without making any provisional assessment, is liable to be set aside. ## Regulation 18 of the Code reads as follows:- “The Licensee shall not recover any arrears after a period of 2 years from the date when such sum became first due, unless such sum has been shown continuously in the bill as recoverable as arrears of the charges of electricity supplied”. 12. In this case the inspection was conducted on 19-10-2005. The demand notice is issued in the year 2009, for charges and penality for the period from 5/2005. Despite the specific contention in the Writ Petition that no assessment was made after the inspection held in 2005, and the orders of such assesment were not served, as provided in Regulation 27A of the Code, the counter affidavit of KSEB is silent over it. At the same time they have stated that there was an omission in the subsequent bills. Therefore it is clear that after the inspection in 2005, they did not take any action till 2009 and that assessing officer has not issued any order of assessment in accordance with Regulation 27A of the Code. At any rate the petitioner or the occupier of the premises was not given an W.P.(C) No. 28401 OF 2009 11 opportunity to explain his part before issuing the final orders, if any passed. He was also deprived of the opportunity to avail the statutory remedy of appeal under Section 127 of the Act as well as Regulation 27(2). Regulation 27A of the Code reads as follows:- “1. Unauthorised use of electricity -(1) If on an inspection of any place or premises or after inspection of 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 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 an order 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 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. W.P.(C) No. 28401 OF 2009 12 (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 12 months immediately preceding the date of inspection. (6) The assessment under this clause shall be made at a rate equal to twice the tariff applicable for the relevant category of services specified in sub-clause(5). 13. I find that the procedure prescribed in Regulation 27A is the same as those prescribed in Section 126 of the Electricity Act 2003 ('the Act' for short). The appellate remedy as provided in Section 127 of the Act is provided in Regulation 27(2) of the Code also. Thus it is seen the KSEB lost sight of the mandatory procedures prescribed in Section 126 of the Act as well as Regulation 27 A of the Code and issued the demand notice contrary to law, without observing the minimum principles of natural justice, apart from forclosing the remedy of statutory appeal. 14. The learned Counsel for the petitioner relied on the judgment reported in **Jomy Thomas Manjooran v. Kerala State Electricity Board & Ors., (2013(1) KLJ 667)** in support of his 13 W.P.(C) No. 28401 OF 2009 contentions. There this Court after explaining the procedure prescribed in Section 126 of the Electricity Act, which provides for a provisional assessment immediately after the inspection, service of the order on the occupier enabling him to submit objection, passing of final order, etc, found that there is a self contained code which for the to be followed on provided procedures detecting unauthorised use of electricity, which the Assessing Officer is bound to observe. There it was held that the Assessing Officer cannot revise, re-open or rectify the amount of penalty once finalised under Section 126 of the Electricity Act and penalty cannot be imposed at the rate applicable to LT VIII Tariff. In the present case there is no assessment as prescribed in Section 126 of the Electricity Act or Regulation 27 A of the Code, before the issuance of the demand notice. Hence I find that the demand notice Ext P3 is liable to be set aside. 15. Going by Ext P2 Mahazar, the additional/unauthorised load is seen reckoned towards the items (3) and (13), described as unconnected. The case of occupier of the premises at the relevant time was also that the connected load was only 8KW, as shown in W.P.(C) No. 28401 OF 2009 14 Ext R2(a). Therefore, as held by this Court in the judgment in **KSEB & others Vs Dr.S. Vidya Prakash** (supra), the impugned demand could not have been made in the absence of evidence to show that devices were connected. 16. The learned counsel for the Electricity Board relying on the judgment dated 19-2-2009 in W.P.(C) No. 90/09, argued that the amount became due, only when the bill was issued and hence the action taken by them cannot be interfered with. But I find that the circumstances arising in that case was entirely different. Moreover this court had taken the view that all official acts are performed regularly and correctly. It appears that there was no contention as to any inordinate delay or absence of assessment or as to the unconnected load. Therefore I am unable to accept her contention. She further submitted that, the KSEB be given an opportunity to issue orders of provisional assessment as well as the final assessment and to proceed against the consumer. It is seen that the site inspection based on which Ext.P2 mahazar was prepared, was conducted as early as in 2005. The building in question was in the occupation of different tenants who vacated the premises, as seen W.P.(C) No. 28401 OF 2009 15 from Ext P1 series as well as from the contentions of Counsel for the petitioner. Permission to proceed for assessment at this stage in respect of inspection held before 9 years will not be proper, in the circumstances of the case. 17. In these circumstances it is declared that the demand notice Ext P3 cannot be enforced and hence it is quashed. Learned Counsel for the petitioner submitted that 30% of the amount covered by Ext.P3 demand notice was remitted by the petitioner based on the interim order passed in this writ petition. That amount shall either be refunded or adjusted in the future bills. Writ petition is allowed accordingly. lsn **P.V. ASHA, Judge**