Thrissur Diary, Ernakulam Regional Co-operative Milk Producers' Union Ltd. v. Thrissur Municipal Corporation Electricity Department & The Kerala State Electricity Board

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE AMIT RAWAL ``` ``` TUESDAY, THE 11[TH] DAY OF JANUARY 2022 / 21ST POUSHA, 1943 ``` ``` WP(C) NO. 6950 OF 2017 ``` ## **`PETITIONER:`** ``` THRISSUR DIARY, ERNAKULAM REGIONAL CO-OPERATIVE MILK PRODUCERS' UNION LTD., RAMAVARMAPURAM P.O., THRISSUR - 680 631, REPRESENTED BY THE DIARY MANAGER. ``` ``` BY ADVS. SRI.K.ANAND (SR.) SRI.JOSEPH SEBASTIAN PARACKAL SMT.LATHA ANAND SRI.M.N.RADHAKRISHNA MENON ``` ## **`RESPONDENTS:`** ``` 1THRISSUR MUNICIPAL CORPORATION, ELECTRICITY DEPARTMENT, OFFICE OF THE THRISSUR MUNICIPAL CORPORATION,M.O.ROAD, THRISSUR - 680 001, REPRESENTED BY ITS SECRETARY. ``` ``` 2THE KERALA STATE ELECTRICITY BOARD, VYDUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM - 695 004, REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE. ``` ## **`BY ADVS.`** ``` SRI. SANTHOSH P.PODUVAL, SC, THRISSUR CORPORATION SRI.B.PREMOD, SC, KERALA STATE ELECTRICITY BOARD LIMITED SRI.N.RAPHY RAJ, SC, KERALA STATE ELECTRICITY BOARD LIMITED ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.01.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 6950 OF 2017 ``` ``` -2- ``` ## **`JUDGMENT`** Petitioner, the Thrissur Diary of the Ernakulam Regional Co-operative Milk Producers’ Union Ltd., a Cooperative Society registered under the Kerala Cooperative Societies Act, is a consumer of the electricity from the first respondent – Thrissur Municipal Corporation Electricity Department having consumer No.12975. The aforementioned electricity connection has been in use since 1987. 2. Society was flabbergasted to receive a demand notice dated 24.06.2016 received on 28.06.2016 Ext.P1 by the first respondent calling upon to pay a sum of Rs.98,164/- as electricity arrears for the period from March, 2001 onwards and Rs.17,700/- as interest till date; total Rs.1,15,834/-, within a period of fifteen days, failing which, the proceedings of prosecution or the revenue recovery much less the disconnection of the electricity as contemplated under Section 45 of Electricity Act, 2003 and Regulation 12 of the Kerala Electricity Supply Code, ``` WP(C) NO. 6950 OF 2017 ``` ``` -3- ``` 2005 would be initiated. Since the aforementioned notice did not specify the details of the arrears, respondent No.1 vide letter dated 07.07.2016 was requested to issue a statement Ext.P2. Vide communication dated 10.08.2016 Ext.P3 respondent No.1 supplied the arrear statement and the entries in the arrear statement depicted that the particulars of the dues and vague. Certain amount was arbitrarily included in the statement without any rational or basis. Another communication was addressed to respondent No.1 dated 08.10.2016 Ext.P4 to supply following details: (1) the details of the opening balances and the amounts due (as claimed) for the year 1997-98 to 2000-2001; (2) the details of the demand notices issued by the first respondent and their acknowledgment receipts and the amounts paid pursuant to the said demand notices; and (3) the details and copies of the bills/additional bills, notices and the acknowledgment receipts. In response to Ext.P4, respondent No.1 vide communication dated 14.11.2016 Ext.P5 reiterated the same very claim as in ``` WP(C) NO. 6950 OF 2017 ``` ``` -4- ``` Ext.P1. 3. Mr.Anand, learned Senior Counsel assisted by Mr.Latha Anand made the following submissions: (i) Copy of the bills Exts.P6, P7 and P8 for the months of June, 2016, August, 2016 and February, 2017 would reveal that there was no electric bill due and in none of the bills at any point of time under the column of arrears, any demand was raised. The demand now made was beyond the jurisdiction and therefore instead of availing the efficacious remedy before the redressal grievance under the erstwhile Act would have been farcical exercise. (ii). Even otherwise as per the provisions of Section 56(2) of the Electricity Act, 2003 the demand can be only confined are under the aforementioned provisions for a period of two years. Respondents did not supply any break up and the details as sought for vide Ext.P5 reiterated the demand. Withholding of such information would lead to a adverse inference against the Electricity Board. ``` WP(C) NO. 6950 OF 2017 ``` ``` -5- ``` 4. Per contra Mr.Santhosh P.Poduval representing the Thrissur Municipal Corporation countered the aforementioned arguments on the ground that the billing system from April, 2001 was computerized and were sent from time to time. Petitioner had been committing the default prior to the said period and thus the demand was raised from March, 2001. Thrissur Corporation is not estopped from claiming the demand as it has not become time barred in view of the ratio decidendi culled out in the judgment rendered by the Division Bench in **Abdul Nazar Vs. Kerala State Electricity Board (2006 (1) KLT 811)** . Petitioner had an efficacious remedy to approach the Consumer Grievance Redressal Forum and urged this Court for dismissal of the writ petition on the aforementioned grounds. 5. I have heard learned counsel for the parties and appraised the paper books. 6. Electricity Act, 2003 came into force with effect from 10.06.2003 as per the notification No.669. Section 56 of the 2003 Act is the enabling provision whereby the ``` WP(C) NO. 6950 OF 2017 ``` ``` -6- ``` Electricity Department or the licensee is empowered to disconnect the supply on account of default on the payment with a rider that the arrears can be confined only for two years. The same reads thus: "Section 56. **Disconnection of supply in default of payment** : -- (1) Where any person neglects to pay any charge for electricity or any sum other than a charge for electricity due from him to a licensee or the generating company in respect of supply, transmission or distribution or wheeling of electricity to him, the licensee or the generating company may, after giving not less than fifteen clear days’ notice in writing, to such person and without prejudice to his rights to recover such charge or other sum by suit, cut off the supply of electricity and for that purpose cut or disconnect any electric supply line or other works being the property of such licensee or the generating company through which electricity may have been supplied, transmitted, distributed or wheeled and may discontinue the supply until such charge or other sum, together with any expenses incurred by him in cutting off and reconnecting the supply, are paid, but no longer: Provided that the supply of electricity shall not be cut off if such person deposits, under protest, - (a) an amount equal to the sum claimed from him, or (b) the electricity charges due from him for each ``` WP(C) NO. 6950 OF 2017 ``` ``` -7- ``` month calculated on the basis of average charge for electricity paid by him during the preceding six months, whichever is less, pending disposal of any dispute between him and the licensee. (2) Notwithstanding anything contained in any other law for the time being in force, no sum due from any consumer, under this section shall be recoverable after the period of two years from the date when such sum became first due unless such sum has been shown continuously as recoverable as arrear of charges for electricity supplied and the licensee shall not cut off the supply of the electricity. " 7. By relying upon the provisions of Section 56 an attempt was made to justify the demand as raised in Exts.P1, P3 and P5 as it was a continuing cause of action which could not have been taken away for realizing on account of having been barred by efflux of time. In other words it was contended that if consumer is in arrears de hors the fact that the new regime of the provisions of statute had come into place, Electricity Department would not be estopped to realize the arrears. In support of the aforementioned contentions the judgment cited above it was held that the relationship between the consumer and ``` WP(C) NO. 6950 OF 2017 ``` ``` -8- ``` the Board is governed by the terms and conditions of the supply of the electricity and therefore the question of limitation with respect to the arrears being a continuing liability would not arise but subject to the provisions of Section 56(2) of the 2003 Act confining it to a period of two years. ## 8. Paragraph No.5 of the aforementioned judgment reads as under: "5. Heard counsel on either side at length. A Division Bench of this Court in Southern India Marine Products Co. v. K.S.E.B., 1995(2) KLT 167 has taken the view that the relationship between the consumer and the Board is governed by the terms and conditions of the supply of electrical energy and therefore there is no question of limitation in reference to the arrears due. Liability to pay energy charges, in our view, is a continuing liability and the consumer cannot escape from that liability on the plea of limitation. The amount of energy charges was due to the Board prior to coming into force of the Indian Electricity Act, 2003. In our view, S.56(2) of the Act would operate only prospectively." 9. On reading of the ratio as well as the provisions of Section 56 of the 2003 Act it is discerned that if a person neglects to pay any charges of the electricity or ``` WP(C) NO. 6950 OF 2017 ``` ``` -9- ``` the sum other than the charge of the electricity, the transmission or distribution and other charges the electricity supply can be disconnected by confining two years. Thus attempts of Corporation to support the demand by confining the period to two years instead of 'from March, 2001' in respect of the demand raised in 2016 i.e., from 2014 onwards. But I am afraid that such demand even cannot be raised by referring to the aforementioned provisions as Section 178 of the Electricity Act 2003 deals with repealing and saving clause which reads as under: " **178. Powers of Central Commission to make regulations:** - (1) The Central Commission may, by notification make regulations consistent with this Act and the rules generally to carry out the provisions of this Act. (2) In particular and without prejudice to the generality of the power contained in sub-section (1), such regulations may provide for all or any of following matters, namely:- (a) period to be specified under the first proviso to section 14; (b) the form and the manner of the application ``` WP(C) NO. 6950 OF 2017 ``` ``` -10- ``` under sub-section (1) of section 15; (c) the manner and particulars of notice under sub-section (2) of section 15; (d) the conditions of licence under section 16; (e) the manner and particulars of notice under clause (a) of subsection (2) of section 18; (f) publication of alterations or amendments to be made in the licence under clause(c) of sub-section (2) of section 18; (g) Grid Code under sub-section (2) of section 28; (h) levy and collection of fees and charge from generating companies or transmission utilities or licensees under sub-section (4) of section 28; (i) rates, charges and terms and conditions in respect of intervening transmission facilities under proviso to section 36; (j) payment of the transmission charges and a surcharge under-subclause (ii) of clause (d) of subsection (2) of section 38; (k) reduction [XXXX] of surcharge and cross subsidies under second proviso to sub-clause (ii) of clause (d) of sub-section (2) of section 38; (l) payment of transmission charges and a surcharge under sub-clause (ii) of clause(c) of section 40; ``` WP(C) NO. 6950 OF 2017 ``` ``` -11- ``` (m) reduction [XXXX] of surcharge and cross subsidies under the second proviso to sub-clause (ii) of clause (c) of section 40; (n) proportion of revenues from other business to be utilised for reducing the transmission and wheeling charges under proviso to section 41; (o) duties of electricity trader under sub-section (2) of section 52; (p) standards of performance of a licensee or class of licensees under sub-section (1) of section 57; (q) the period within which information to be furnished by the licensee under sub-section (1) of section 59; [(r) the manner for reduction of cross subsidies under clause (g) of section 61;] (s) the terms and conditions for the determination of tariff under section 61; (t) details to be furnished by licensee or generating company under sub-section (2) of section 62; (u) the procedures for calculating the expected revenue from tariff and charges under sub-section (5) of section 62; (v) the manner of making an application before the Central Commission and the fee payable therefor under sub-section (1) of section 64; ``` WP(C) NO. 6950 OF 2017 ``` ``` -12- ``` (w) the manner of publication of application under sub-section (2) of section 64; (x) issue of tariff order with modifications or conditions under sub-section (3) of section 64; (y) the manner by which development of market in power including trading specified under section 66; (z) the powers and duties of the Secretary of the Central Commission under sub-section (1) of section 91; (za) the terms and conditions of service of the Secretary, officers and other employees of Central Commission under sub-section (3) of section 91; (zb) the rules of procedure for transaction of business under sub-section (1) of section 92; (zc) minimum information to be maintained by a licensee or the generating company and the manner of such information to be maintained under sub-section (8) of section 128; (zd) the manner of service and publication of notice under section 130; (ze) any other matter which is to be, or may be, specified by regulations. (3) All regulations made by the Central Commission under this Act shall be subject to the conditions of previous publication. " 10. No material has been placed on record to establish that at any point of time before the ``` WP(C) NO. 6950 OF 2017 ``` ``` -13- ``` commencement of the new Act any demand was raised which can said to be a continuing liability and acknowledgment thereof to bring the claim within the period of limitation of two years even if the petitioner consumer had not acknowledged as per the provisions of Section 18 of the Limitation Act. Section 18 of the Limitation Act extends the period of limitation of the acknowledgment. Thus even the Corporation cannot claim the arrears to two years and it was never acknowledged nor any material has been placed on record. Had the material been placed on record there would have been some substance in the argument of the respondent Corporation. Section 45 of the Electricity Act prescribe that in the case of unauthorized use the period of demand can be confined to twelve(12) months. It is not a case of an unauthorized use thus the same provisions would not be applicable. Non availment of efficacious remedy in case the demand is found to be without jurisdiction cannot be a bar for a consumer to approach the extra ordinary writ jurisdiction of this Court ``` WP(C) NO. 6950 OF 2017 ``` ``` -14- ``` under Article 226 of the Constitution of India to bring the case within the realm of judicial review. As an upshot of the above findings, I am of the view that the demand Exts.P1, P3 and P5 was not backed by any substance or material to even confine to two years as per the provisions of Section 56 and thus is wholly without jurisdiction, cryptic and hereby quashed. Writ petition is accordingly allowed. ``` Sd/- ``` ``` AMIT RAWAL ``` ``` JUDGE ``` ``` vv ``` ``` WP(C) NO. 6950 OF 2017 ``` ``` -15- ``` ## **`APPENDIX OF WP(C) 6950/2017`** ## **`PETITIONER EXHIBITS`** - `EXHIBIT-P1: TRUE COPY OF NOTICE DATED 24/06/2016 ISSUED BY THE 1ST RESPONDENT.` - `EXHIBIT-P2: TRUE COPY OF LETTER DATED 07/07/2016 SENT BY THE PETITIONER.` - `EXHIBIT-P3: TRUE COPY OF LETTER DATED 10/08/2016 ALONG WITH ARREAR STATEMENT.` - `EXHIBIT-P4: TRUE COPY OF THE LETTER DATED 08/10/2016 TO THE 1ST RESPONDENT.` - `EXHIBIT-P5: TRUE COPY OF THE LETTER DATED 14/11/2016 ISSUED BY THE 1ST RESPONDENT.` - `EXHIBIT-P6: TRUE COPY OF BILLS ISSUED BY 1ST RESPONDENT FOR THE MOTHE OF JUNE 2016.` - `EXHIBIT-P7: TRUE COPY OF BILLS ISSUED BY THE 1ST RESPONDENT FOR THE MOTHE OF AUGUST 2016.` - `EXHIBIT-P8: TRUE COPY OF BILLS ISSUED BY THE 1ST RESPONDENT FOR THE MONTH OF JANUARY 2017.`