Balajee Wire Products v. Bihar State Electricity Board
1995-09-22
AFTAB ALAM
body1995
DigiLaw.ai
Order The petitioner, in this application, challenges an order, dated 22.05.95 (copy at Annexure 1), passed by the General Manager-cum-Chief Engineer, Central Bihar Area Electricity Board on the petitioner's claim for remission of minimum guaranteed charges in terms of clause 13 of the High Tension Agreement. The claim for remission relates to a three year period from 1989-90 to 1991-92. 2. Mr. Rekhi, learned counsel for the petitioner, assailed the order of the Chief Engineer on the following four grounds : (i) The action of the Chief Engineer in not taking into account the interruptions in supply of less than half an hour for computing the total hours of non-supply of energy was without any sanction of law. (ii) The Chief Engineer had acted contrary to law in not allowing remission of guaranteed energy charges on the basis of the admitted hours of non-supply of electricity and in denying remission of guaranteed energy charges on the plea that the petitioner's failure to consume the minimum guaranteed units was not due to the interruption in supply of energy but was due to the petitioner's own inability to consume energy. (iii) By taking the total K.V.A. recorded instead of the total K.V.A. charged (the former being lower than the later) as the basis for computing the remission of the demand charges (for the years 1990-91 and 1991-92), the Chief Engineer had adopted a wrong mode of calculation. (iv) The Chief Engineer had erred in law in not allowing any proportionate remission of demand charges in terms of clause 13 of the High Tension Agreement for the first year of supply. 3. As regards the first point, Mr. Shiva Kriti Singh, learned counsel appearing for the Board, fairly stated that as the provisions of the tariff and the agreement etc. stood during the relevant years or even as they exist today it was not open to the Chief Engineer to exclude the interruptions in the supply of less than half an hour for computing the total hours of non-supply of electricity. Mr.
stood during the relevant years or even as they exist today it was not open to the Chief Engineer to exclude the interruptions in the supply of less than half an hour for computing the total hours of non-supply of electricity. Mr. Singh stated that a proposal was under consideration to introduce an amendment in the relevant provisions in this regard and, according to him, a notification for this purpose was likely to be made shortly, but, till such time as the notification was issued introducing such an amendment it would not be open to exclude any interruptions of less than half an hour for calculating the total hours of non-supply of energy. This objection made on behalf of the petitioner is, therefore, upheld. 4. As regards the second point it may be noted that recently this Court has come across a number of cases where the consumer was not allowed remission of guaranteed energy charges in terms of clause 13 of the High Tension Agreement on the basis of the admitted hours of non-supply of electricity. The refusal to allow remission is based on the plea that the consumer's failure to consume the guaranteed units was not due to the Board's failure to maintain a continuous supply of energy but for other reasons. It is tried to be shown that the consumer failed to consume the guaranteed units even during the period when there was no interruptions in the supply of energy. And on that basis it is contended that the consumer's failure to consume the guaranteed units was primarily or solely due to factors for which the consumer was himself responsible, such as managerial lapses, dislocation in production caused by non-supply or delayed supply of raw materials stockpiling of the finished products etc. etc.; in other words, for reasons, other than, the Board's failure to supply energy. On this ground it is held that the consumer was not entitled to any proportionate remission even for the admitted hours of non-supply of electrical energy. In this case also the Chief Engineer has proceeded on similar lines. 5. In my opinion, this approach for examining a claim of remission on account of Board's failure to supply energy is wholly erroneous and foreign to the provisions contained in clause 13 of the High Tension Agreement.
In this case also the Chief Engineer has proceeded on similar lines. 5. In my opinion, this approach for examining a claim of remission on account of Board's failure to supply energy is wholly erroneous and foreign to the provisions contained in clause 13 of the High Tension Agreement. I may clarify here that the refusal to allow remission on the ground that the consumers' failure to consume the guaranteed units was not due to the Board's failure to supply energy but on account of factors for which the consumer himself was responsible may not be per se unreasonable and arbitrary. Objectively speaking there may be some substance in this line of reasoning. But it must be borne in mind that the Chief Engineer derives its power to adjudicate upon a claim for remission of minimum guaranteed charges from clause 13 of the agreement. It, therefore, follows that he must confine himself to that provision and must not take into consideration elements and factors which are foreign to that provision. Clause 13 on a plain meaning of the language, provides that the consumer is entitled to remission proportionate to the Board's inability to supply electrical energy. In case of the Board's inability to supply electrical energy the hypothetical question of the consumer's ability or inability to consume, had the Board been able to maintain a continuous supply is quite immaterial and irrelevant. 6. For the reasons stated it must be held that in this case the Chief Engineer was in error in not allowing remission of guaranteed energy charges on the basis of the admitted hours of non-supply and the second objection of the petitioner must also be upheld. 7. The third objection raised on behalf of the petitioner relates to the mode of calculation for remission of demand charges. To appreciate the precise objection of the petitioner it will be necessary to examine the actual calculation made in the impugned order and for this purpose one such calculation is extracted below : 'B' IN MAXIMUM DEMAND (7/90 to 3/91) 1. Contract Demand . . . . . 115 KVA 2. Total KVA recorded. . . . . 420.17 KVA 3. Total KVA charged . . . . . 776.25 KVA 4. Total KVA charged over & above 356.08 KVA 5. Total hrs. of power to be supplied (24 x 274) 6576 Hrs. 6. Total admitted hrs.
Contract Demand . . . . . 115 KVA 2. Total KVA recorded. . . . . 420.17 KVA 3. Total KVA charged . . . . . 776.25 KVA 4. Total KVA charged over & above 356.08 KVA 5. Total hrs. of power to be supplied (24 x 274) 6576 Hrs. 6. Total admitted hrs. of non supply 587.44 Hrs. Say 588 Hrs. 7. Total Hrs. of power supplied -5988 Hrs. 8. Proportionate Relief in terms of (420.17 x 588) 41.25 KVA ______________ 5988 KVA Say 41 KVA 9. Admissible relief for 41 KVA @ Rs. 35/- Rs. 1435/- 8. From the above calculation it appears that the total KVA recorded was 420.17 KVA; this was lower than 75 per cent of the contract demand and, hence, the demand charges were raised on the basis of 776.25 KVA, that being 75 percent of the contract demand. However, from serial no. 8 of the calculation reproduced above it appears that in calculating the proportionate relief, it is the recorded KVA (420.17) which has been multiplied by the total admitted hours of non-supply. According to Mr. Rekhi, this is clearly contrary to clause 4(c) of the agreement which stipulates that Maximum Demand Charges will be based on the maximum KVA demand for the month or 75 percent of the contract demand whichever is higher. 9. Mr. Rekhi submitted that for the purpose of raising the demand charges the higher of the two figures (that being 75 percent of the contract demand) was taken into account. So for the purpose of calculating remission of demand charges also the higher figure should have formed the basis of the calculation. 10. Mr. Shiva Kriti Singh, learned counsel for the Board, accepts this position. He, however, points out one more mistake in the calculation of proportionate relief (serial no. 8 of the reproduced calculation). Mr. Singh pointed out that not only the higher of the two figures (being 776.25 at serial no. 3) should have been multiplied by the total admitted hours of non-supply but the product should have been divided not by the total hours of power supplied at serial no. 7 but by the higher figure of total hours of power to be supplied at serial no. 5. 11. In my opinion. Mr. Shiva Kriti Singh, is quite right in his submission.
7 but by the higher figure of total hours of power to be supplied at serial no. 5. 11. In my opinion. Mr. Shiva Kriti Singh, is quite right in his submission. The position that emerges, thus, is that the remission in the demand charges should be calculated in the following manner : Total KVA charged x Total hours of non-supply _______________________________________ Total hours of power to be supplied 12. For the reasons stated I find that the remission of demand charges has also not been properly computed in the impugned order. 13. On the last question regarding the refusal to grant remission in demand charges for the first year of supply, Mr. Shiva Kriti Singh strenuously argued that the Chief Engineer-cum-General Manager was justified in not allowing remission for the first year of supply. Mr. Singh pointed out that clause 4(c) of the agreement was in two parts; the first part stipulated that maximum demand charges would be raised on the maximum KVA demand for the months or 75 percent of the contract demand, whichever is higher and this was made subject to the provisions of clause 13. The second part of clause 4(c) provided that for the first year of supply the maximum demand charges will be based on the actual monthly demand for that month and this, according to him was not subject to provisions of clause 13. According to Mr. Singh, during the first year of supply the consumer was given the concession that he would be charged on the basis of the actual maximum demand for the month regardless of his failure to achieve 75 percent of the contract demand. As a counter measure to this concession he was also disentitled from any remission in terms of clause 13. 14. I am unable to agree to this view. In my opinion, clause 13 is intended to deal with the special situation when for reasons enumerated there, either the consumer is prevented from receiving or using the electrical energy or the Board is unable to supply it (it is another matter that what was supposed to be a special situation has come to be an every day affair).
In my opinion, clause 13 is intended to deal with the special situation when for reasons enumerated there, either the consumer is prevented from receiving or using the electrical energy or the Board is unable to supply it (it is another matter that what was supposed to be a special situation has come to be an every day affair). On the other hand, the concession made available to a consumer in the first year of supply under clause 4(c) of the agreement is under normal conditions, presupposing a normal supply of energy in the first year of the contract as also in the succeeding years. However, in case the Board is prevented from supplying energy for reasons enumerated in clause 13 of the agreement I see no reason to hold that the right for remission under that clause will not be available to a consumer in the first year of the supply. In my considered opinion, the provision for remission under clause 13 would be available to consumers equally and in all respects regardless of the year of supply. 15. Thus, the fourth objection, raised by Mr. Rekhi in this case, must also be upheld. 16. For the reasons, stated above, the impugned order is set aside and the matter is remitted back to the Chief Engineer-cum-General Manager, Central Bihar Area Electricity Board for deciding the matter afresh in the light of the observations and directions made in this judgment. 17. It is expected that the Chief Engineer will finally dispose of the petitioner's claim within three months from the date of receipt/production of a copy of this order. 18. In the result, this application is allowed. No order as to costs.