EAST INDIA ENGINEERING COMPANY v. ORISSA STATE ELECTRICITY BOARD
1988-11-17
HARI LAL AGRAWAL, P.C.MISRA
body1988
DigiLaw.ai
JUDGMENT : P.C. Misra, J. - The Petitioner, a partnership firm registered under the Indian Partnership Act, runs an industry 'situated in the industrial area, Rourkela. The industry comprises of the Steel Foundry with an electric furnace. The Petitioner-firm had entered into an agreement dated 31-10-1983 with the Orissa State Electricity Board under which the latter had undertaken to supply electric energy for manufacturing and for other works of the said industry. The term of the agreement (vide Annexure-provide that the Orissa State Electricity Board during the continuance of the agreement shall supply electric energy to the Petitioner-firm up to but not exceeding a maximum demand of 500 KVA which is called as the "contract demand". It has also been stipulated therein that the Petitioner, the consumer, shall pay to the Board .for the power demand and electrical energy supplied under the agreement in accordance with the tariff mentioned therein. The tariff rate as per the contract consists of two parts: (i) demand charges at the rate of Rs. 35,00 per KVA of maximum demand, and; (ii) energy charges at the rate of 36 paise for each unit subject to certain other factors enumerated herein. The consumer has also agreed under the contract that .the aforesaid rate of tariff is subject to any revision that may be made by the Board from time to time. It is not disputed that by a notification dated 22-11-1986 the Orissa State Electricity Board in exercise of its power conferred by Sections 49 & 59 of the Electricity (Supply) Act, 1948 and all other powers available to the Orissa State,Electricity Board (Genera) Conditions of Supply) Regulations, 1981 as amended from time to time, revised the tariff rate applicable, to different categories of consumers of electricity in the State as per the "Tariff Rates Schedule" appended to the said notification. The portion of the notification relevant, for the purpose of this case is reproduced below for ready reference. TARIFF RATES SCHEDULE 1. Large Industries: (a) This tariff rate shall be applicable to supply of power for industrial purpose, with contract demands of 110 KVA/100 K. W. and above supplied at 11or 33 K. V. at one point of supply. The voltage of supply shall be at the sole discretion of the Board. (b) The monthly charges shall be: Demand charges at. Rs.
Large Industries: (a) This tariff rate shall be applicable to supply of power for industrial purpose, with contract demands of 110 KVA/100 K. W. and above supplied at 11or 33 K. V. at one point of supply. The voltage of supply shall be at the sole discretion of the Board. (b) The monthly charges shall be: Demand charges at. Rs. 35.00 per K. V. A. of maximum demand or 80% of can tract demand whichever is higher, plus energy charges at the following rate on units metered, less units billed separately under (f) and (g) below, without prejudice to the payment a'' monthly minimum charges as given in (c) below: (i) Paise 44 for each unit for industries with contract demand of 100 K. W. and above up to but excluding 500 K. W. (ii) Paise 48 for each unit for industries with contract demand of 500 K. W. and above upto but excluding 1000 K. W. (iii) Paise 52 for each unit of industries with contract demand of 1000 K. W. and above. (c) The monthly minimum charges shall be calculated at the above rates, on a demand of 80 per cent of contract demand, and on Units calculated at an average power factor of Order 9 and an average load factor of 20 per cent on the said contract demand. The "Tariff Rates Schedule" quoted above requires the consumer to pay (i) demand charges and also, (ii) one, by charges. The, rate of demand charges as per the said schedule is Rs. 35.00.per KVA of maximum demand or 80 per cent of. the "contract demand" whichever is higher, The rate of energy charges varies depending upon the contract demand. The energy charges for each unit of consumption for an industry with contract demand of 100 K. W. and above up to but excluding 500 K. W. is 44 paise; whereas the rate for industry with contract demand of 500 K. W. and above up to but excluding 1000 K. W. is 48 paise. The charge as per the said tariff schedule is 52 paise per unit for an industry having contract demand of 1000 K. W. and, above.
The charge as per the said tariff schedule is 52 paise per unit for an industry having contract demand of 1000 K. W. and, above. The Consumer is also required to pay the monthly minimum charges at the above rates, on a demand of 80% of contract demand and on units calculated at an average power factor of O. P. and an average load factor of 20% on the said contract demand. In the year 1986 the State Government declared an Industrial Policy Resolution effective from 1st of April, 1986 under which the new as well as the existing industries with contract demand up to 500 KVA were exempted from tariff minimum charges. On the basis of the said Industrial policy, the Petitioner claims that the industry of the Petitioner with contract demand of 500 KV A is eligible for the said exemption. The Petitioner's grievance in this writ application is that the bills submitted by the Board given under Annexure-5 series are contrary to the Industrial Policy Resolution of 1986 read with circular issued by the Chief Secretary. Government of Orissa and the Chairman of the Orissa State Electricity Board and are, therefore, liable to be quashed and/or revised. Admittedly due to non-payment of the bills, supply of power to the Petitioner-firm was disconnected on 21.3-1986. and, therefore, the Petitioner has not, consumed any energy thereafter. The impugned bills, in Annexure-5 series, are for the period from April. 1986 to October. 1987 under which, according to the Petitioner, the minimum charges has been demanded contrary to the exemption granted by the Industrial Policy Resolution. The Petitioner, therefore, denies its liability to make payment of the amount under demand under Annexure-5 series and prays in this writ application to quash the said demand and to direct the opp.parties to submit, revised bills to the Petitioner without charging minimum, charges for the period from April. 1986 to October, 1987 and also prays to restore the power supply to the Petitioner. 2. In the return filed by the opp.parties, it has been stated that no minimum charges have been demanded from the Petitioner keeping in view the provisions of the Industrial Policy Resolution of 1986 and the revised bills submitted to the Petitioner comprise only the "demand charges" calculated on 80% of ' the contract demand which has not been exempted under the, said Policy Resolution. 3.
3. According to the Petitioner, both "the demand charges" and "the minimum charges" are relatable to consumption of electric energy' and since the Petitioner has not consumed any electricity after the discontinuance of the supply on 21-3-1986 he is not liable to pay any charges whatsoever, because of the exemption made in the Industrial Policy. 4. The learned Counsel for the opp.parties, however, urged that the demand,charges is payable by the consumer during the continuance of the agreement irrespective of the consumption of electric energy, which has riot been exempted by the Industrial Policy Resolution. As argued by Mr. Rath, the learned Counsel appearing for the opp.parties, the monthly minimum charge which is also payable even in case of non-consumption of electric energy, has been exempted in respect of the Industrial units with "contract demand" upto 500 K V. A, by the said Industrial Policy Resolution. He has referred to Clause 31 (e) of the Orissa State Electricity Board (Supply) Regulations, 1981 which provides that every consumer shall during the continuance of agreement also pay, when required, the monthly minimum charge even if no electricity is consumed for any reason whatsoever, or supply has been disconnected. It is thus clear that in the present case, even if the line supplied to the Petitioner industry was disconnected on 21-3-1986, the Board was entitled to recover the monthly minimum charges from the Petitioner. According to the opp.parties the said monthly minimum charges and not the "demand charges" have been exempted by the Industrial Policy Resolution of 1986. 5. In the aforesaid premises, the question for consideration is as to whether the Industrial Policy Resolution extends the exemption to both the kinds of charges payable by the consumer, as contended by the Petitioner or to the monthly minimum charge only as urged by the opposite' parties. 6. Clause C (i) of Chapter- 'F' of the Industrial Policy Resolution provides as follows: (c) (I) Exemption of E1ectricity Duty: No minimum charge will be levied in respect of the industrial units with contract demand up to 500 KVA. In other words the energy,bill will be made on the basis of actual monthly consumption of energy.... The language of the above quoted clause specifically exempts payment of minimum charge in respect of the, industrial units, with a contract demand up to 500 KVA.
In other words the energy,bill will be made on the basis of actual monthly consumption of energy.... The language of the above quoted clause specifically exempts payment of minimum charge in respect of the, industrial units, with a contract demand up to 500 KVA. There is no dispute that the contract demand of the Petitioner firm is 500 KV A and, therefore, it becomes eligible for exemption of minimum charges under the Industrial Policy of 1986. The Petitioner would be entitled to the relief claimed in this writ application only, if the exemption so made could extend also to the "demand charges". A plain reading of the terms of the agreement together with the revised tariff rates already referred to above clearly shows that the consumer is liable to pay 'demand charges' at the rate of Rs. 35.00 per KVA of maximum demand or 80% of 'contract demand' which is higher plus energy charges. Minimum charge is playable by the consumer as per Clause 31 (e) of the,Regulation, even in a case where the consume does not consumer any electricity either on account of disconnection of electric supply or for any other reason whatsoever. What has been exempted under the Industrial Policy is the payment of such minimum charges but not the demand charges which is payable, because the quantity of energy contracted has been reserved and/or kept ready to be supplied to the consumer as per his requirement as and when required by the consumer during the continuance of the term of agreement. "Maximum Demand" as defined under Clause 3 (xx) means the average amount of kilowatts or kilovolt-amperes, as the case may be, delivered to the point,of supply of the consumer and recorded during a thirty minutes period of maximum use in the month or it shall mean twice the largest number of kilowatt bours (K. H.) or kilovolt ampere hours (K. V. A. H.) delivered to the point of supply by the consumer during any consecutive 30 minutes period. During the period of discontinuances of electric supply as in the present case, there shall be no question of any maximum demand as there has been no supply of electric energy at all. In such a case, the other mode of calculating the "demand charges" is bound to be adopted.
During the period of discontinuances of electric supply as in the present case, there shall be no question of any maximum demand as there has been no supply of electric energy at all. In such a case, the other mode of calculating the "demand charges" is bound to be adopted. The computation of demand charges in the aforesaid alternative method' does not depend upon the consumption of energy and, therefore, the submission of the learned Counsel for the Petitioner that the demand charges, cannot be computed in the absence of supply of electric energy cannot be accepted. In other words, the Industrial Policy Resolution does not exempt the consumer from payment of the "demand charges" and, therefore, the Petitioner is liable to pay the "demand charges" even though supply of power to the Petitioner-firm was disconnected on 21-3-1986. 7. The learned Counsel' appearing for the Petitioner relied on a decision of this Court (to which I was a party) delivered in First Appeal No. 139 of 1974 in which it was held on the construction of Clause 13 of the agreement involved in that case that consumer is not liable to pay the minimum charges after the energy supplied to him is discontinued by the supplier. Mr. Rath, appearing for the opp.parties has in this connection argued that in an appeal preferred against the aforesaid judgment, the Supreme Court has stayed the operation of that judgment and that the points for consideration in that case were entirely different from that of this case. In the First Appeal referred to above, the legality of the,charges levied for the period from 1-4-1968 to 5-3-1970 was in issue. The Orissa State Electricity Board (Supply) Regulation, 1981 was not applicable to the demand made in that case. As already stated Clause 31 (e) of the said Regulations specifically provides that the monthly minimum charge is leviable even if no electricity is consumed for an reason whatsoever. The same is the position where the supply has been disconnected. The said decision otherwise also is not applicable to this case as the question of payability of monthly minimum charges in the case of discontinuance of supply of energy, which was dealt with in that case does not arise to be decided in this case as the 'monthly minimum charge" has been undoubtedly exempted by the Industrial Policy Resolution. 8.
The said decision otherwise also is not applicable to this case as the question of payability of monthly minimum charges in the case of discontinuance of supply of energy, which was dealt with in that case does not arise to be decided in this case as the 'monthly minimum charge" has been undoubtedly exempted by the Industrial Policy Resolution. 8. I, therefore, find no merit in this writ application which is accordingly dismissed. There would, however, be no order as to Costs. Final Result : Dismissed