Toja Tyre & Treaders Pvt. Ltd. v. Kerala State Electricity Board

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR** **FRIDAY, THE 29TH FEBRUARY 2008 / 10TH PHALGUNA 1929** **OP.No. 20313 of 1998(R)** **----------------------------------** **PETITIONERS:** - **---------------------** **1. TOJA TYRE & TREADERS PVT. LTD., VII/545, CHOWARA ROAD, KALADY, REP.BY THE MANAGING DIRECTOR.** **2. TOLLIN RUBBERS PVT. LTD., VII/545, CHOWARA ROAD, KALADY, REP.BY ITS MANAGING DIRECTOR.** **3. CARBIDE POLYMERS (P) LTD., MAYFAIR BUILDINS, SASTRI ROAD, KOTTAYAM, REP.BY ITS DIRECTOR.** **4. PERIYAR FERRO ALLOYS (P) LTD., MAYFAIR BUILDING SASTRI ROAD, KOTTAYAM REP.BY ITS DIRECTOR.** **5. ANJANEYA CHEMICALS, NEW INDUSTRIAL DEVELOPMENT AREA, KANJIKODE, PALAKKAD, REP.BY ITS MANAGING PARTNER.** **6. MODERN CHEMICAL INDUSTRIES, CHITTOOR, PALAKKAD, REP.BY ITS MANAGING DIRECTOR.** **7. A.P.STEEL RE- ROLLING MILL LTD., NEW INDUSTRIAL DEVELOPMENT AREA, KANJIKODE, PALAKKAD, REP.BY ITS DIRECTOR.** **8. POPULAR CARBIDES, XIV/793 COIMBATORE ROAD, PALAKKAD REP.BY ITS MANAGING PARTNER.** **9. S.R.ELECTRO PRODEUCTS, NEW INDUSTRIAL DEVELOPMENT AREA, KANJIKODE, PALAKKAD , REP.BY ITS DIRECTOR.** **10. THANKAM CHEMICALS, EDAYAR, ALUVA, REP.BY ITS PROPRIETOR.** ## **OP. NO.20313/1998** **11. ARUN LAKSHMI ALLOYS (P) LTD., NEW INDUSTRIAL DEVELOPMENT AREA, KANJIKODE, PALAKKAD , REP.BY ITS DIRECTOR.** **12. HAMSAVENI CARBIDES, NEW INDUSTRIAL DEVELOPMENT AREA, KANJIKODE PALAKKAD , REP.BY ITS DIRECTOR.** **13. HI- TECH ELECTROTHERMICS (P) LTD., INDUSTRIAL DEVELOPMENT AREA, EDAYAR MUPPATHADAM, REP.BY ITS MANAGER.** **14. LAKSHMI CHEMICALS INDUSTRIES INDUSTRIAL DEVELOPMENT AREA, EDAYAR, MUPPATHADAM, REP.BY ITS PROPRIETOR.** **15. W. ELECTRO CHEMICALS,. WARD NO.6/872, LILLY FLOWER GARDEN, FERRY ROAD KALAMASSERY, REP.BY ITS MANAGING PARTNER.** **16. MOLIKEM ALLOYS, POYYA, MALA, REP.BY ITS PROPRIETOR.** **17. MALAYALAM CHEMICALS (P) LTD., EDAYAR ALUVA, REP.BY ITS DIRECTOR.** **18. GRAMOX PAPER & BOARDS LTD., REP.BY ITS DIRECTOR.** **19. COCHIN ALLOY PRODUCTS (P) LTD., EDAYAR, ALWAYE, REP.BY ITS MANAGING DIRECTOR.** **20. VEEYESSAR ELECTROTHERMICS (P) LTD., KANJIKODE , PALAKKAD REP.BY ITS MANAGER.** **21. STAR RE- ROLLING MILLS, KALLADIPATTA, PATTAMBI, REP.BY ITS PROPRIETOR.** **22. CHAKKIATH MOODA EXTRACTIONS, MATTOOR, KALADY, REP.BY ITS MANAGING PARTNER.** ## **OP. NO.20313/1998** **23. VANCHINAD FORGINGS PVT. LTD., NEW INDUSTRIAL DEVELOPMENT AREA, KANJIKODE , PALAKKAD, REP.BY ITS DIRECTOR.** ## **24. SAGAR CHLORATES (P) LTD., NEW INDUSTRIAL DEVELOPMENT AREA, KANJIKODE , PALAKKAD REP.BY ITS MANAGER.** **BY ADV. SRI.RAJESH THOMAS SRI.FIROZ K.ROBIN** ## **RESPONDENTS:** **-----------------------** **1. KERALA STATE ELECTRICITY BOARD, REP.BY ITS SECRETARY, VYDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM.** **2. SPECIAL OFFICER (REVENUE), KERALA STATE ELECTRICITY BOARD, VYDYUTHI BHAVAN, PATTOM, THIRUVANANTHAPURAM.** **BY ADV. SRI.P.SANTHALINGAM, SC, KSEB SRI.C.K.KARUNAKARAN, SC FOR KSEB** **THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 29/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **OP. NO.20313/1998** ## **ORDER ON CMP. NO.35781/1998 IN OP. NO.20313/1998** ## **DISMISSED** ## **29.02.2008 SD/- T.R.RAMACHANDRAN NAIR, JUDGE** ## **APPENDIX** ## **PETITIONERS EXHIBITS** **EXT.P1:- COPY OF THE GOVT. ORDER G.O.(MS) 4/92 DT. 6.2.92.** **EXT.P2:- COPY OF THE BOARD ORDER DT. 27.3.92.** **EXT.P3:- COPY OF THE ORDER DT. 26.9.95 PASSED BY THE IST RESPONDENT IN THE CASE OF THE IST PETITIONER.** **EXT.P4:- COPY OF THE BOARD ORDER DT. 25.7.97.** **EXT.P5:- COPY OF THE ORDER DT. 1.7.97.** **EXT.P6:- COPY OF THE ORDER DT. 11.2.98.** **EXT.P7:- COPY OF THEGOVT. ORDER DT. 11.12.97.** **EXT.P8:- COPY OF THE GOVT. ORDER DT. 23.1.98.** **EXT.P9:- COPY OF THE BOARD ORDER DT. 12.12.97.** **EXT.P10:- COPY OF THE CALCULATION SHEET FOR THE MONTH OF JANUARY 98.** **EXT.P11:- COPY OF THE CALCULATION FOR THE MONTH OF DECEMBER 07.** **EXT.P12:- COPY OF THE REPRESENTATION DT. 26.2.98 FILED BY THE IST PETITIONER BEFORE THE IST RESPONDENT.** **EXT.P13:- COPY OF THE JUDGMENT DT. 5.3.98 IN OP. 4336/98.** **EXT.P14:- COPY OF THE JUDGMENT DT. 27.1.98 ION OP. 1776/98.** **EXT.P15:- COPY OF THE ORDER DT. 1.8.98.** **EXT.P16:- COPY OF THE JUDGMENT DT. 17.3.98 IN OP. 3862/98.** **EXT.P17:- COPY OF THE JUDGMENT IN WA. NO.808/98.** _**/**_ **TRUE COPY/** **P.A. TO JUDGE** **tss** ## **T.R.RAMACHANDRAN NAIR, J.** ## **=========================** ## **OP.No.20313 of 1998-R.** ## **=========================** **Dated this the 29[th] day of February, 2008.** **J U D G M E N T** **The petitioners are industrial consumers running small scale industrial units. The dispute concerns energy bills for the month of December, 1997 and January, 1998. Power cut was in force till 14.12.1997. They approached this Court raising mainly two aspects, (1) the power cut was lifted with effect from 15.12.1997 and the quota system was withdrawn. Till 14.12.1997 the allocation of quota was on monthly basis. That system was in force for the period upto 14.12.1997. The demand of the Board for 30% at non concessional tariff is not justified. Another issue raised is that the Board was not justified in refixing the monthly quota to daily quota for the period 1.12.1997 to 15.12.1997 on a retrospective basis, after the power cut was lifted. The first issue** **OP.No.20313 of 1998-R. -: 2 :-** **raised is covered by various judgments of this Court especially WA.No.808/1998 and the judgment in OP.No.3862/1998 and the recent judgment of the the Division Bench in OP.No.9480/1998. Therefore the said contention is not available to the petitioners.** **2. The Government as well as the Board as per Exts.P1 and P2 granted separate tariff for industrial consumers during the period of concession. Because of the nonavailability of sufficient quantity of power, power cut was imposed on industrial units from time to time. By Ext.P4 it was partially withdrawn and the power cut was reduced from 70% to 50% with effect from 25.7.1997. Prior to the said order passed by the Government Ext.P5 Board order was in force. Clause 5 of Ext.P5 reads that, 'the daily consumption shall be limited to the proportionate quota for a day'. It is specifically mentioned in clause 6 that, 'the consumption in excess of the quota will be charged at double the above rate'. This was introduced on 1.7.1997. But later by Ext.P4 dated 25.7.1997 the Board issued a composite order after referring** **OP.No.20313 of 1998-R. -: 3 :-** **to various orders issued by the Electricity Board and the Government. Ext.P5 is item No.3 in Ext.P4. Sub-clause (vii) of clause 2 of Ext.P4 states that allocation of quota shall be on monthly basis. Therefore, admittedly the said condition in Ext.P4 introduced the allocation of quota on a monthly basis. According to the petitioners, they were utilising the sanctioned quota on that basis. Later the power cut was withdrawn with effect from 15.12.1997 anticipating not less than 100 MW power per day from Eastern Regional Electricity Board. Various rates have been fixed for the consumption of energy. Later this was adopted by the Board as per Ext.P9.** **3. By Ext.P6 which was brought out on 11.2.1998 the Board fixed the rate of consumption from 1.12.1997 to 14.12.1997, obviously with effect from 1.12.1997. Clause 1 of the same is extracted below:** **“(1) The normal consumption from 1.12.1997 to 14.12.1997 shall be computed as Normal consumption = Normal monthly quota x 14 units** **22”** **OP.No.20313 of 1998-R. -: 4 :-** **By the said clause the quota has been fixed on a daily basis evidently. Clause 2 says that, 'the excess consumption and proportionate increase in maximum demand shall be billed at three times of the Ruling Tariff. The petitioners attack the above two conditions on various grounds.** **4. It is pointed out that going by Ext.P4 what is fixed is monthly quota and therefore that is applicable till the lifting of power cut ie. upto 15.1.1997. Ext.P6 is dated 11.2.1998 by which the quota for the period from 1.12.1997 to 14.12.1997 is fixed on retrospective basis. But going by Ext.P4 the same is bad, since the consumers were entitled to consume their entire quota even on a single day. By fixing the quota on a daily basis, the Board is now attempting to impose penalty for the consumption in excess of the daily quota. It is stated that the same, which is imposed on a retrospective basis cannot stand scrutiny.** **5. As noticed earlier the other grounds relate to the imposition of higher rates for the energy supplied. The said issue** **OP.No.20313 of 1998-R. -: 5 :-** **as noticed earlier has been decided against the petitioners in a similar case OP.No.9480/1998 by a Division Bench of this Court by judgment dated 25.9.2007. The learned counsel for the petitioner fairly submitted that the issue regarding the said contention is covered by the said judgment where the Division Bench was pleased to hold that the tariff fixed by the Board for the balance 50% is perfectly legal.** **6. Therefore, the only issue that requires examination is whether Ext.P6 fixing a daily quota is correct or not. Obviously Ext.P4 Board order governed the field till the power cut was lifted. Even though in Ext.P5 the Board fixed the quota on a daily basis that issue stands modified by Ext.P4 which is adopted and issued subsequent to Ext.P5. Therefore the petitioners were entitled to avail monthly quota on that basis and to consume energy accordingly.** **7. The learned counsel for the petitioner relied upon a decision of a learned Single Judge of this Court reported in** _**Abdul**_ **OP.No.20313 of 1998-R.** **-: 6 :-** _**Azeez v. Kerala State Electricity Board**_ **(2002(1) KLT 870) and contended that penalty can be imposed prospectively and not retrospectively. In identical circumstances it was held that such imposition is bad in law. The following observations are relevant here:** **“It may be that long after issuance of Ext.P3 and while issuing Ext.P6 notice on introduction of 75% power cut, the respondents might have realised the necessity to direct the consumers to consume energy on an average basis per day, of the weekly quota in order to facilitate equal and even distribution of energy to all consumers. But due to the mere fact that such a stipulation is made by the respondents in a subsequent notice issued by them long after Ext.P3 notice issued by them it cannot be contended that the respondents had intended to Ext.P3 notice also that the monthly quota of energy should be consumed by the consumers in an manner on an basis average average per day. Therefore the levy of penal charges at Rs.2.70 per unit for 3605 units consumed by the petitioner for the month of June 1967 is absolutely illegal and unsustainable in this case. It is settled law that penalty can be imposed only prospectively and not retrospectively. Therefore on the basis of Ext.P6 notice issued by the respondents on 17.6.1997, the petitioner cannot be subjected to penal charges for the energy consumed by him within the monthly quota only on the ground that he consumed the energy within a few days without making it spread over for the entire month.”** **OP.No.20313 of 1998-R. -: 7 :-** **8. In the counter affidavit filed by the Board no explanation is offered on this aspect. At any rate, such re-fixation on a retrospective basis cannot be sustained. Petitioners had a legitimate right to follow the method prescribed by Ext.P4 till the lifting of the power cut unless it was modified during the period of the power cut by appropriate Board orders. When Ext.P5 was modified by Ext.P4 the consumers were expected to avail of the quota on that basis. For example, if one of the consumers had availed of the entire quota on a single day between 1.12.1997 and 15.12.1997, that is perfectly justified going by Ext.P4. But long after such consumption when they are told by Ext.P6 that they should have availed it only on a daily basis, the same would result in acute hardship. The Board is imposing penalty for the excess consumption on the premise that the consumers had exceeded the daily quota. Such retrospective imposition of penalty cannot be justified under any circumstances. Therefore, the method adopted in Ext.P6 is illegal and it is declared so.** **OP.No.20313 of 1998-R. -: 8 :-** **9. Therefore, the Board is directed to recompute the actual charges due from the petitioners in the light of the fact that they are entitled to avail the monthly quota and revised bills shall be accordingly issued after adjusting the amounts paid during the pendency of the Original Petition. The revised bills shall be issued within two months from the date of receipt of a copy of this judgment.** **The Original Petition is disposed of as above.** ## **T.R.RAMACHANDRAN NAIR, JUDGE.** **kvs/-**