Saju Jose v. Kerala State Electricity Board

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **FRIDAY, THE 9TH DAY OF DECEMBER 2016/18TH AGRAHAYANA, 1938** **WP(C).No. 35356 of 2014 (T) ----------------------------** ## **PETITIONER(S):** - **-------------** **SAJU JOSE, S/O.JOSEPH,** **TROPICANA WORLD TRADE PVT.LTD., XI/148A, CMS, CHERIYAKADAVU, RESIDING AT PUTHEN PARAMBIL HOUSE, KANNAMALY P.O., KOCHI-682008.** **BY ADV. SRI.K.P.RAJEEVAN** **RESPONDENT(S):** **--------------** **1. KERALA STATE ELECTRICITY BOARD REPRESENTED BY ITS SECRETARY, VAIDHYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM-695004.** **2. THE ASSISTANT ENGINEER** - **KERALA STATE ELECTRICITY BOARD, ELECTRICAL SECTION, KANNAMALY, KOCHI-682005.** **3. THE CHIEF VIGILANCE OFFICER KERALA STATE ELECTRICITY BOARD, VAIDHYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM-695004.** **4. KERALA STATE ELECTRICITY REGULATORY COMMISSION KPFC BHAVAN, VELLAYAMBALAM, THIRUVANANTHAPURAM-695010.** **BY SRI.JAICE JACOB,SC,** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09-12-2016 ALONG WITH WPC NO.33671/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **bp** **WP(C).No. 35356 of 2014 (T) ----------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS -----------------------** |**EXHIBIT-P1:**|**TRUE COPY OF THE REGISTRATION ISSUED TO THE**| |---|---| ||**PETITIONER FROM THE INDUSTRIES DEPARTMENT.**| |**EXHIBIT-P2:**|**TRUE COPY OF THE LICENSE ISSUED TO THE**| ||**PETITIONER FROM THE PANCHAYAT.**| |**EXHIBIT-P3:**|**TRUE COPY OF THE APPLICATION OF THE PETITIONER**| ||**FOR POWER ALLOCATION.**| |**EXHIBIT-P4:**|**TRUE COPY OF THE ORDER OF THE 2ND RESPONDENT**| ||**DATED 12/1/2010.**| |**EXHIBIT-P5:**|**TRUE COPY OF MAHAZAR DATED 28/10/2014 PREPARED**| ||**BY THE SUB-ENGINEER.**| |**EXHIBIT-P6:**|**TRUE COPY OF LETTER AND BILL DATED 30/10/2014**| ||**OF THE 2ND RESPONDENT.**| |**EXHIBIT-P7:**|**TRUE COPY OF THE STATEMENT GIVEN BY THE**| ||**PETITIONER ON 27/11/2014.**| |**EXHIBIT-P8:**|**TRUE COPY OF ORDER AND BILL DATED 29/11/2014**| ||**OF THE 2ND RESPONDENT.**| |**EXHIBIT-P9:**|**TRUE COPY OF THE COMPLAINT DATED 19/12/2014 OF**| ||**THE PETITIONER.**| |**EXHIBIT-P10:**|**TRUE COPY OF THE COMPLAINT DATED 19/12/2014 OF**| ||**THE PETITIONER.**| |**EXHIBIT-P11:**|**TRUE COPY OF THE BILL DATED 5/12/2014 ISSUED**| ||**TO THE PETITIONER.**| |**EXHIBIT-P12:**|**TRUE COPY OF THE LETTER AND CHEQUE DATED**| ||**22/12/2014 SENT BY THE PETITIONER.**| |**RESPONDENT(S)'**|**EXHIBITS**<br>**:**<br>**NIL.**| ||**//TRUE COPY//**| **P.A. TO JUDGE** **bp** ## **A.M. SHAFFIQUE, J.** =============== W.P. (C) Nos. 35356/2014 & 33671/2016 ================== Dated this, the 9[th] day of December, 2016 ## **J U D G M E N T** WP(C) No. 33671/2016 has been filed by the Kerala State Electricity Board challenging the order passed by the Kerala State Electricity Regulatory Commission and produced as Ext.P8 on the ground that the Commission had no jurisdiction to entertain the complaint filed by the 2[nd] respondent herein. 2. The short facts involved in the writ petition would disclose that on the basis of an inspection conducted by the Anti Power Theft Squad (APTS) in the industrial unit of the petitioner in WP(C) No. 35356/14, it was noticed that the petitioner having obtained a tariff order for conducting an industrial unit under LT IVA is not carrying on any manufacturing activity in the premises whereas they were using the freezers alone for storage of frozen food products, which according to the Board officials amounts to commercial use. Hence, based on the said estimation, a demand had been made by the Assistant Engineer invoking Section 126 for an amount of W.P(C) Nos.35356/2014 & 33671/2016 -:2:- `21,25,719/-. Petitioner filed an objection to the provisional bill and after considering the same, the Assistant Engineer issued a final bill dated 29/11/2014 claiming an amount of `16,14,894/-. Petitioner had taken up the matter before the Kerala State Regulatory Commission by filing a complaint dated 3/12/2014, which resulted in the impugned order. 3. The 2[nd] respondent also filed WP(C) No. 35356/2014 inter alia seeking for a direction to quash the bill issued by the Assistant Engineer on the ground that the matter is pending adjudication before the Regulatory Commission. The short issue involved in the above writ petition is whether the Regulatory Commission has jurisdiction to entertain a complaint filed over the final bill of the Assistant Engineer invoking Section 126 of the Electricity Act, 2003. 4. Learned counsel for the petitioner places reliance upon Section 86 of the Electricity Act, which narrates the functions of the Regulatory Commission. Section 86 reads as under:- _**“86. Functions of State Commission.-** (1) The State Commission shall discharge the following_ W.P(C) Nos.35356/2014 & 33671/2016 ## -:3:- _functions, namely:--_ _(a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State:_ _**PROVIDED that** where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers;_ _(b) regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State;_ _(c) facilitate intra-State transmission and wheeling of electricity;_ _(d) issue licences to persons seeking to act as transmission licensees, distribution licensees and electricity traders with respect to their operations within the State;_ _(e) promote co-generation and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee;_ W.P(C) Nos.35356/2014 & 33671/2016 -:4:- _(f) adjudicate upon the disputes between the licensees and generating companies and to refer any dispute for arbitration;_ - _(g) levy fee for the purposes of this Act;_ _(h) specify State Grid Code consistent with the Grid Code specified under clause (h) of sub-section (1) of section 79;_ _(i) specify or enforce standards with respect to quality, continuity and reliability of service by licensees;_ - _(j) fix the trading margin in the intra-State trading of electricity, if considered, necessary;_ - _(k) discharge such other functions as may be assigned to it under this Act._ - _(2) The State Commission shall advise the State Government on all or any of the following matters, namely:--_ - _(i) promotion of competition, efficiency and economy in activities of the electricity industry;_ _(ii) promotion of investment in electricity industry (iii) reorganisation and restructuring of electricity industry in the State;_ - _(iv) matters concerning generation, transmission, distribution and trading of electricity or any other matter referred to the State Commission by that Government:_ - _(3) The State Commission shall ensure transparency while exercising its powers and discharging its_ W.P(C) Nos.35356/2014 & 33671/2016 ## -:5:- _functions._ _(4) In discharge of its functions, the State Commission shall be guided by the National Electricity Policy, National Electricity Plan and tariff policy published under section 3.”_ 5. It is submitted that as far as the resolution of disputes are concerned, the only jurisdiction vested with the Regulatory Commission is to decide disputes between the licencee and other generating companies as referred to in 86(f). As far as the present case is concerned, the bill apparently is issued under Section 126 of the Electricity Act for which an appellate remedy is provided under Section 127 and the remedy of the petitioner was to avail of the said appellate remedy rather than approaching the Regulatory Commission. It is submitted that none of the clauses in Section 86(1) permits the Regulatory Commission to adjudicate on a like issue. Reference is also made to the power to make regulations and it is contended that in none of the Regulations or even the Supply Code, there is any provision which enables the Regulatory Commission to adjudicate on such an issue. 6. On the other hand, learned counsel appearing for the W.P(C) Nos.35356/2014 & 33671/2016 -:6:- 2[nd] respondent, the consumer, submits that in addition to that, Section 86 also permits the Regulatory Commission to decide such other functions as may be assigned to it under the Act in terms of Section 86(1)(k). Reference is also made to Section 142 of the Act, which reads as under:- “142. Punishment for non-compliance of directions by Appropriate Commission.- In case any complaint is filed before the Appropriate Commission by any person or if that Commission is satisfied that any person has contravened any of the provisions of this Act or the rules or regulations made thereunder, or any direction issued by the Commission, the Appropriate Commission may after giving such person an opportunity of being heard in the matter, by order in writing, direct that, without prejudice to any other penalty to which he may be liable under this Act, such person shall pay, by way of penalty, which shall not exceed one lakh rupees for each contravention and in case of continuing failure with an additional penalty which may extend to six thousand rupees for every day during which the failure continues after contravention of the first such direction.” 7. Learned counsel submits that this is an instance where W.P(C) Nos.35356/2014 & 33671/2016 **==> picture [21 x 9] intentionally omitted <==** officers have wrongly applied the tariff to the power consumed by the petitioner without any basis which matter clearly amounts to contravention of the provisions of the Act and the Rules and therefore the Commission is well within its jurisdiction to entertain such complaint. Learned counsel also submits that the complaint has been filed invoking Rule 97(2) of the Supply Code read with Rule 149(2) of the Kerala Electricity Supply Code, 2014. It is submitted that when the complaint clearly discloses issues which are pertaining to the matters which could be adjudicated by the Regulatory Commission, there is nothing wrong on the part of the Commission to have entertained the complaint, Ext.R2(b). 8. Learned counsel for the petitioner also places reliance upon the judgment of the Apex Court in _**Maharashtra**_ ## _**Electricity Regulatory Commission v. Reliance Energy Ltd.,**_ (2007) 8 SCC 381], wherein, at para 11, after extracting Section 86, the Apex Court held as under; ## _**“11.** xxxxxxx_ _Thus, from the above provision it is clear that the primary purpose of the Commission is to_ W.P(C) Nos.35356/2014 & 33671/2016 ## -:8:- _determine tariff for generation, supply, transmission of electricity, etc. and to regulate the electricity purchase and procurement process of distribution licensees, to facilitate intra-State transmission, to promote cogeneration and generation of electricity from renewable sources of energy, to adjudicate upon the disputes between the licensees and generation companies and to refer any dispute for arbitration, to levy fee for the purposes of this Act, specify State Grid Code consistent with the Grid Code specified under Clause (h) of sub-section (1) of Section 79. Subsection (2) of Section 86 also empowers the State Commission to advise the State Government on any of the matters including promotion of competition, efficiency, matters concerning generation, transmission, distribution and trading of electricity, etc. Sub-section (3) provides that the Commission shall ensure transparency while exercising its powers and discharging its functions. Sub-section (4) provides that:_ _“79. (4) In discharge of its functions, the Central Commission shall be guided by the National Electricity Policy, National Electricity Plan and tariff policy published under Section 3.”_ 9. Having regard to the contentions urged on either side, the short question to be considered is whether the Regulatory W.P(C) Nos.35356/2014 & 33671/2016 **==> picture [21 x 10] intentionally omitted <==** Commission has jurisdiction to entertain a complaint filed against a bill issued by the Assistant Engineer under Section 126 of the Electricity Act. It is apparent from the statutory provision itself that when an appeal is provided against a bill issued under Section 126, the jurisdiction of the other authorities are impliedly barred. As far as the functions of the Regulatory Commission is concerned, it is confined to the provisions of the Act. True that the Regulatory Commission has powers as provided under Sections 86 and 142 of the Act and Regulations 97(2) and 149(2). But those powers are not intended for adjudicating on the factual disputes arising in a matter relating to a bill issued by the Assistant Engineer. That the Commission has the power in terms of Rule 149(2) of the Supply Code, 2014 to authorise entry or inspection by officers designated thereunder does not mean that Regulatory Commission has the power to sit in judgment over the actions taken by the said officer. In the case on hand, it is apparent that the designated officer namely the Assistant Engineer himself has issued the provisional bill and thereafter the W.P(C) Nos.35356/2014 & 33671/2016 **==> picture [27 x 10] intentionally omitted <==** final bill was issued. Learned counsel for the petitioner however disputes the fact that the assessing officer had visited the premises. 10. Be that as it may, when a bill has been issued by the competent officer under the statute under Section 126, the only remedy available under the statute is to prefer an appeal under Section 127. Regulation 97(2) or 149(2) does not provide a different forum in the matter. 11. As far as Section 142 is concerned, it is a penalty procedure which can be adjudicated by the Regulatory Commission. It is not akin to adjudicating to a final bill issued by the Assistant Engineer invoking Section 126 of the Act. In the said circumstances, I do not think that there is any power available with the Regulatory Commission to adjudicate on issues projected by the petitioner challenging a bill under Section 126. Exercise of jurisdiction is therefore illegal and not in accordance with the statutory provisions and for that reason itself, the impugned order is liable to be set aside. W.P(C) Nos.35356/2014 & 33671/2016 **==> picture [27 x 10] intentionally omitted <==** 12. Coming to the other writ petition, the petitioner has approached this Court when Ext.P11 bill had been issued. Ext.P11 had been issued since the petitioner did not pay the amount covered by Ext.P8, which was a final bill issued by the Assistant Engineer on 6/12/2014. As already indicated, remedy of the petitioner is to prefer appeal against Ext.P8 issued on 6/12/2014. The petitioner has also produced subsequent bills that had been issued as Exts.R2Q and R2R which also shows the amount payable by the petitioner. 13. Having regard to the fact that WP(C) No. 35356/2014 was pending before this Court for quite a long time and the fact that the petitioner had approached a wrong forum, I am of the view that an opportunity should be granted to the petitioner to challenge the final bill by preferring an appeal under Section 127. Accordingly, these writ petitions are disposed of as under:- (i) WP(C) No. 33671/16 is allowed. Ext.P8 order issued by the 1[st] respondent is quashed. (ii) In WP(C) No. 35356/2014, the petitioner is permitted to W.P(C) Nos.35356/2014 & 33671/2016 **==> picture [27 x 10] intentionally omitted <==** prefer an appeal against Ext.P8 final bill within a period of thirty days from the date of receipt of a copy of this judgment. (a) On filing of the same, the appellate authority shall consider the same after complying with the other statutory provisions and pass appropriate orders as expeditiously as possible. (b) The demand made pursuant to Ext.P8 and subsequent bills issued in that regard shall remain stayed for a period of thirty days to enable the petitioner to approach the appellate authority Sd/- **A.M. SHAFFIQUE, JUDGE** Rp9/12/2016 //True Copy// P.S to Judge