WA Nos. 2139 & 2194 of 2017 in W.P.(C) No. 3139/2014 (M.A. Moideen, M.A. Fathima, M.A. Shahinaz, M.A. Femina v. Deputy Chief Engineer (Distribution), Kerala State Electricity Board, and others)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE & THE HONOURABLE MR. JUSTICE P.SOMARAJAN FRIDAY, THE 8TH DAY OF JUNE 2018 / 18TH JYAISHTA, 1940 WA.No. 2139 of 2017 IN WPC. 3139/2014 AGAINST THE JUDGMENT IN WP(C) 3139/2014 of HIGH COURT OF KERALA DATED 23/3/2017 APPELLANT(S)/PETITIONERS 3 TO 6 -------------------------------- 1 DR.M.A. MOIDEEN AGED 57 YEARS, S/O. DR. M.A ABDULLA, PARTNER, M/S. CHEST HOSPITAL, KOZHIKODE. 2 M.A FATHIMA, AGED 59 YEARS, D/O. DR. M.A ABDULLA,RESIDING AT SHIRAZ, KANOLIPARAMBA, PUTHIYARA, CALICUT - 673 004. 3 M.A SHAHINAZ, AGED 57 YEARS, D/O. DR.M.A ABDULLA,RESIDING AT 1/3909A, FAJR, PRASANTHAM COLONY, EAST HILL, KOZHIKODE. 4 M.A FEMINA, AGED 51 YEARS,. D/O. DR. M.A ABDULLA, RESIDING AT27/1323A, GULZAR, WATER TANK ROAD, PUTHIYARA, KOZHIKODE. BY ADV.SRI.V.V.SURENDRAN RESPONDENT(S)/RESPONDENTS:- --------------------------- 1. THE DEPUTY CHIEF ENGINEER (DISTRIBUTION), ELECTRICAL CIRCLE, KERALA STATE ELECTRICITY BOARD, VYDYUDHI BHAVAN, GANDHI ROAD, KOZHIKODE - 673 011. 2. THE DEPUTY CHIEF ENGINEER(APPELLATE AUTHORITY), ELECTRICAL CIRCLE, KALPETTA, WAYANADU - 673 121. 3. THE EXECUTIVE ENGINEER, ELECTRICAL DIVISION, KERALA STATE ELECTRICITY BOARD, VYDYUDHI BHAVAN, GANDHI ROAD, KOZHIKODE - 673 011. 4. THE ASSISTANT ENGINEER, ELECTRICAL SECTION(CENTRAL), KERALA STATE ELECTRICITY BOARD, BEACH ROAD, KOZHIKODE - 673 032. 5. THE ASSISTANT ENGINEER, ANTI POWER THEFT SQUAD (APTS-N), VYDYUDHI BHAVAN, GANDHI ROAD, KOZHIKODE - 673 011. WA NO.2139/2017 -2- 6. THE ASSISTANT ENGINEER,(ASSESSING OFFICER), KERALA STATE ELECTRICITY BOARD, VYDYUDHI BHAVAN, GANDHI ROAD, KOZHIKODE - 673 011. BY SRI.SUDHEER GANESH KUMAR R., SC, KSEB THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 21/2/2018 ALONG WITH WA NO.2194/2017, THE COURT ON 8/6/2018 DELIVERED THE FOLLOWING: ## **A.M. SHAFFIQUE & P.SOMARAJAN, JJ.** ========================== WA Nos.2139 & 2194 of 2017 ==================== Dated this, the 8[th] day of June, 2018 ## **J U D G M E N T** ## _**Shaffique, J.**_ These appeals have been filed by the petitioners in WP(C) Nos.3139/2014 and 32249/2009 respectively challenging the common judgment dated 23/3/2017. Petitioners 3 to 6 in WP(C) No.3139/2014 alone are the appellants in WA No.2139/2017. The issue raised in the writ petitions is regarding the penal bills issued by the Kerala State Electricity Board (hereinafter referred to as the Board). 2. The facts made mention in the WP(c) No. 3139/14 are as under:- Petitioners were the partners of M/s Chest Hospital, Kozhikode. They have 11 Low Tension (LT) connections. It was decided to surrender those 11 LT connections in place of a single High Tension (HT) connection. Ext.P1 letter dated 9/4/2007 is the request sent by the petitioners to the Deputy Chief Engineer. An application was also submitted for the aforesaid purpose and the receipt issued by the Central Section, Kozhikode dated 22/9/2007 is produced as Ext.P2. WA Nos.2139 & 2194/2017 -:2:- The Electrical Inspectorate by order dated 28/2/2008 (Ext.P3) granted sanction for the work for availing HT supply and for an additional electrical installation of 38 KVA CT scanner subject to certain conditions. This fact was intimated to the Board as well. It is alleged that no action was taken by the Board pursuant to the same. Later, petitioners were directed to give an undertaking in a stamp paper worth `50/- which was also complied. Petitioners were asked to pay `12,200/- for considering the application which was also complied. On 24/6/2009, by Ext.P4, the 3[rd] respondent ordered allocation of power to the hospital. Even thereafter, power allocation was not made. On 23/10/2008, the Regional Auditing Officers (RAO) made a surprise inspection at the hospital premises and they formed an opinion that the petitioners had an unauthorized load with respect to 3 LT connections bearing consumer Nos.CB 7297, CB 2693 and CB 4504. Petitioners challenged the same by preferring an appeal which came to be rejected as per order dated 22/9/2009 (Ext.P5). The matter came to be challenged before this Court by filing WP(C) No.32249/2009. An interim order dated 17/11/209 was passed directing the respondents to call upon the petitioners regarding the further WA Nos.2139 & 2194/2017 -:3:- steps they have to take to obtain the HT connection. Petitioners allege that pursuant to the direction of this Court, the respondents have called upon the petitioners to take certain steps which they have complied and finally an agreement was signed in January, 2010, which is produced as Ext.P7. It is submitted that all along Board was issuing penal bills and the petitioners have been asking them to stop issuing penal bills in view of the pendency of WP(C) No.32249/2009. It is submitted that on 23/6/2012, petitioners received Ext.P8 letter from the 4[th] respondent calling upon the petitioners to carryout certain activities. Petitioners were asked to lay 75 metres of 11 KV, XLPE UG cable of size 3 x 300 from the metering panel at the petitioners premises to the nearest Ring Main Unit (RMU) located in the area or to install an RMU at the premises of the petitioners. Petitioners sent a reply Ext.P9 on 23/7/2012 complaining about the lethargic approach of the Board. Again an inspection was conducted in the premises and a mahazar was prepared on 25/6/2012 (Ext.P10). A provisional assessment has been made on the basis of the said inspection and the petitioners have been called upon to pay a sum of `4,32,917/- in respect of CB 4871-5. In respect of CB 7297, WA Nos.2139 & 2194/2017 -:4:- petitioners were called upon to pay `1,60,530/-. Exts.P11 and P13 are the provisional assessments. Ext.P14 is the reply submitted by the petitioners to the said demands. However, without any thing further, they were issued with Exts.P16 and P17 bills. Petitioners preferred a writ petition before this Court as WP(C) No.19672/12 challenging the bills. Pursuant to the direction issued by this Court, assessing officer issued Exts.P18 and P19. By judgment dated 9/4/2013, this Court directed the Board to give an H.T. connection to the premises of the petitioners within a period of two months on payment of requisite fee for installation of the RMU. With reference to the assessment made as per Exts.P18 and P19, petitioners were relegated to prefer an appeal before the Appellate Authority. Appeals were heard by the 2[nd] respondent and by a common order dated 23/6/2013 they were dismissed. Pursuant to the same, demand notices were issued as Exts.P24 and P25. Petitioners therefore challenged Exts.P23, P18, P19, P11 and P13 assessments and Exts.P16 and P17 bills. Further they seek for a writ of mandamus to direct the Board to refund `5,03,098/- collected by the Board towards installation and incidental charges for installing the RMU and to refund the WA Nos.2139 & 2194/2017 -:5:- amounts illegally connected as penal fixed charges. 3. In WP(C) No.32249/2009, petitioners challenged Ext.P20 order dated 22/9/2009 of the Deputy Chief Engineer which is produced as Ext.P5 in WP(C) No.3139/2014. 4. For easy reference, the documents are referred to as shown in WP(C) No.3139/2014, unless otherwise stated. 5. In the impugned order dated 22/9/2009, the question was whether petitioners have used any unauthorised additional load, whether the application for conversion of the service connection to HT is a bar against penalisation of unauthorised load and whether the procedural formalities had been complied with. It was held that the additional load over and above the sanctioned load as recorded in the site mahazar is correct. The next contention was repelled after referring to Clause 26 of the Conditions of Supply, 2005. It was observed that before getting the sanction from the licencee, connecting of additional load was irregular and hence the penal bill was correctly issued and that the procedural formalities had been fully complied with. The Appellate Authority further found that additional unauthorised load of 3 KW was detected in the appellant's premises in respect WA Nos.2139 & 2194/2017 -:6:- of consumer No.7297, 17 KW in respect of Consumer No.2693 and 29 KW in respect of consumer No.4504 which is to be penalised for twelve months as per Sections 126(5) and (6) of the Electricity Act, 2003. Accordingly assessment in respect of Consumer No.2693 was revised to 17 KW as against 19 KW. No surcharge was levied. 6. In the counter affidavit filed in WP(C) No.3139/2014, the respondents supported the stand taken by them in the matter. It is contended that the petitioners were indulged in unauthorised use of electricity and hence they are liable to be penalised u/s 126 of the Electricity Act, 2003. It is submitted that in order to effect an HT service connection, the consumer as well as the licensee have to comply with several procedures/formalities prescribed under the statute and the Supply Code and all minute details are to be inspected and verified before effecting supply. It is further submitted that respondents have complied with the direction in WP(C) No.32249/2009 and the application for HT service connection was processed on 18/11/2009. The scheme of approval from Electrical Inspectorate was given only on 22/2/2008. The penal bills were issued to the consumer for non WA Nos.2139 & 2194/2017 -:7:- regularizing the load or for not removing the unauthorised load. Once unauthorised load is detected in the premises, it is for the consumer to remove the same with information to the Board or to regularise the additional load. It is further submitted that if the consumer had submitted relevant documents before 2009, the service connection would have been effected without insisting for RMU. After introduction of APDRP scheme, it was mandatory that 11 KV supply can be made only through RMU in APDRP notified areas. Petitioners' premises come under the project area and when the projects are completed, all the 11 KV supply will be routed through RMU's. They further contended that there was no delay on the part of the Board. 7. The learned Single Judge observed that though the approval of the Electrical Inspectorate was issued on 28/2/2008, it is submitted only on 19/8/2008. Board sent a communication on 12/1/2009 directing separate agreements for dismantling the LT connection and effecting HT connection. On 24/6/2009, HT power allocation was sanctioned and on 18/7/2009, petitioner was called upon to remit supervision charges for laying the HT cable. The payment was made on 22/8/2009, pursuant to which, on WA Nos.2139 & 2194/2017 -:8:- 18/11/2009, petitioners were directed to complete the work and produce the energisation approval from Electrical Inspector. Petitioners completed the HT cable laying work and the matter was communicated to the Board on 27/11/2009. The Deputy Chief Engineer thereafter directed the petitioners to submit the permission from the Electrical inspector to detach 5 LT connections from the existing connections. The petitioners had resubmitted the application for HT connection. It seems that the request was made to the petitioners to install the RMU only on 23/6/2012 and inspection was conducted two days after the said date. Learned Single Judge observed that conversion took some time and it cannot be stated that there was undue delay. The communications between the parties would show that some time was taken in remitting the required fee, completing the work and for other matters. It was observed that in so far as the load had been connected in excess of the sanctioned load, imposition of penalty was proper and the appellate authority was justified in confirming the demand. 8. Though it is argued by the learned counsel for appellant that the learned Single Judge had not properly WA Nos.2139 & 2194/2017 -:9:- appreciated the factual circumstances involved in the matter, the question to be considered is whether there was any justification on the part of the Board to issue penal bills for the unauthorised load and whether their action in delaying the grant of 11 LT connection had resulted in any loss to the petitioners. 9. Learned counsel appearing for the Board placed reliance upon a recent judgment in _**Sulabha Marketing (P) Ltd. v. Kerala State Electricity Board, Tvm**_ (2017 (3) KHC 563) wherein a Division Bench of this Court had occasion to consider what would amount to unauthorised use of electricity. The issue that had cropped up for consideration before the Division Bench was regarding the quantification of penalty u/s 126 of the Electricity Act, 2003. The Division Bench had heard a batch of writ petitions based on reference orders and appeals arising from certain orders passed by the learned Single Judge. After relying on the entire statutory provisions relating to the same and after referring to the judgments, a long line of precedents, it was held at paragraph 31 as under:- _“31. For the reasons stated hereinbefore, we hold as follows;_ - _**(i)** The presence of the assessing officer at the time of_ WA Nos.2139 & 2194/2017 ## -:10:- _inspection and detection of unauthorised use of electricity in the premises of a consumer is not a mandatory requirement for initiating assessment proceedings under Section 126(1) of the Act._ _**(ii)** The expression 'unauthorised use of electricity' under Section 126 of the Act deals with cases of unauthorised use even in the absence of intention. Hence, the intention of the consumer is not the foundation for invoking powers of the competent authority and passing of an order of assessment under Section 126 of the Act._ _**(iii)** Whenever a consumer commits the breach of the terms of the agreement, Regulations and the provisions of the Act by consuming electricity in excess of the sanctioned/connected load, such consumer would be in blame and under liability to pay at the rate equal to twice the tariff applicable for the relevant category of services in terms of Section 126 of the Act._ _**(iv)** The term 'tariff' in Section 126(6) of the Act includes both fixed charges and charges for the electricity supplied, which has to be assessed in the case of a consumer indulged in unauthorised use of electricity, at a rate equal to twice the tariff applicable for the relevant category of services specified in subsection (5)._ _**(v)** In case of unauthorised use of electricity in a higher tariff, such assessment shall be made at the rate equal to twice the tariff applicable for the relevant category of services attracting such higher tariff for which electricity supplied was unauthorisedly used and not the relevant category of service to which the consumer belongs._ _**(vi)** However, in the case of a consumer, who is blamed with overdrawal of electricity in excess of_ WA Nos.2139 & 2194/2017 ## -:11:- _sanctioned/connected load in the very same premises and for the very same purpose, which do not involve any change in tariff applicable for the relevant category of services, which consumption has already been metered and paid by the consumer, since such usage being not by any artificial means or through a tampered meter, assessment under Section 126(6) of the Act can only be equal to twice the fixed charges payable and such consumer cannot be saddled with the liability to pay twice the energy charges applicable for the relevant category of services, unless regularisation of such additional connected load or enhancement of contract demand necessitates upgradation of the existing distribution system or enhancement of voltage level of supply._ _**(vii)** In all other cases falling under Explanation (b) to Section 126 of the Act, the assessing officer is empowered to assess unauthorised use of electricity at the rate prescribed in Section 126(6) and for the period specified in Section 126(5), as amended by the Electricity (Amendment) Act, 2007 for both fixed charges and energy charges. Penalty charges for current charges shall be levied for proportionate energy charge and normal current charge collected shall be deducted._ _**(viii)** Though Regulation 51(1) of the Conditions of Supply, 2005 employs the term 'penalised', what is contemplated under the said Regulation is only assessment of unauthorised use of electricity in terms of Section 126 of the Act for the period specified in Section 126(5) and at the rate specified in Section 126(6) of the Act. As such, Regulation 51(1) of the Conditions of Supply, 2005 is neither ultra vires the provisions of Section 126 of the Act_ WA Nos.2139 & 2194/2017 ## -:12:- _nor unenforceable._ _**(ix)** What is contemplated under Board Order dated 7.2.2008 is only assessment of unauthorised use of electricity in terms of Section 126 of the Act, as amended by the Electricity (Amendment) Act, 2007, for the period specified in Section 126 (5) and at the rate specified in Section 126(5) of the Act. As such, the said Board Order is neither ultra vires the provisions of Section 126 of the Act nor unenforceable._ By virtue of the aforesaid judgment, we do not think that the appellants can take any contention beyond what has already been held in _**Sulabha Marketing**_ (supra). 10. The learned counsel for the appellants however points out that the case projected by the appellants stands on a slightly different footing in so far as the appellants had applied for converting the LT connection to HT connection and though it was sanctioned, the Board did not take any steps to convert the LT connection to HT connection and in the meantime, certain additional load had been detected in the premises of the hospital based on which the penalty orders had been issued. 11. We do not think that the delay on the part of the Board, if any, in providing HT connection to the premises of the appellants by way of conversion would enable the consumer to WA Nos.2139 & 2194/2017 -:13:- take additional load more than what has already been prescribed. It has already been held that when a consumer commits breach of the terms of the agreement by consuming electricity in excess of the sanctioned/connected load, such consumer would be under obligation to pay penalty in terms of S.126 of the Electricity Act. In the light of the aforesaid law laid down in _**Sulabha Marketing**_ (supra) and taking into consideration the factual aspects involved in the matter, we do not think that the learned Single Judge had committed any error in dismissing the writ petitions. No grounds had been made out for interference with the judgment of the learned Single Judge. Writ Appeals are, therefore, dismissed. Sd/- ## **A.M. SHAFFIQUE, JUDGE** Sd/- ## **P.SOMARAJAN, JUDGE** Rp //True Copy// PS to Judge