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2012 DIGILAW 1416 (PAT)

Durga Cold Storage & Ice Factory v. Bihar State Electricity Board

2012-10-05

AJAY KUMAR TRIPATHI

body2012
ORDER Since in all the three Writ Applications, common question of law have been raised by the petitioners, they all have been heard together and are being disposed off together. One common thread which runs through all the Writ Applications are that the petitioners are High Tension Consumers, having entered into a contract demand of varied kinds, ranging from 90 K.V.A. to 250 K.V.A. Though one of the initial prayers in all the three Writ Applications was to declare Clause 1.1 (ii) of the tariff, dated 01.11.2006 to be bad in law. This question is now being given up and the thrust of the argument now is the meaning and the interpretation, which is being given to Clause 1.1 (ii) of HTS 1 Consumers, falling in part B relating to High Tension Supply of the tariff relating to 01.11.2006 by the respondent Board. 2. Petitioners have entered into an agreement with the respondent-Bihar State Electricity Board. These agreements have been brought on record as Annexure- 3 in all the three Writ Applications. There are various clauses, listing the terms and conditions including the obligations which arise from the agreement. We are not concerned with any other part of the agreement except Clause 13 and 14, which is required to be referred to as well as have been relied upon by the respective-parties in building up the argument. In view of the same, Clause 13 and 14 are reproduced hereinbelow: “13. If at any time the consumer is prevented from receiving or using the electrical energy to be supplied under this agreement either in whole or in part due to strikes, riots, fire, floods, explosions, act of God or any other case reasonably beyond control or if the Board is prevented from supplying or unable to supply such electrical energy owing to any or all of the causes mentioned above then the demand charge and guaranteed energy charge set out in the Schedule shall be reduced in proportion to the ability of the consumer to take or the Board to supply such power and the decision of the Chief Engineer, Bihar State Electricity Board, in this respect shall be final. Note – The term Chief Engineer includes Additional Chief Engineer for the area concerned. 14. Note – The term Chief Engineer includes Additional Chief Engineer for the area concerned. 14. The Board shall be at liberty at any time to alter the demand charges, energy charges including fuel-surcharge and minimum guarantee charges as set out in the Schedule appended hereto and this Schedule shall be deemed as having been automatically revised with effect from the date Board enforces new tariff rates for the consumer.” 3. Clause 13 of the agreement has been in existence for a long period of time and the object and purpose behind the same was to grant remission to a consumer, whenever there was failure or inability on the part of the Board to supply power or for a consumer to utilize power in the facts and circumstances indicated therein. To put it simply a consumer was entitled to demand and beget remissions in the Demand charges as well as Guaranteed Energy charges which arose from the agreement. There is an obligation on the consumer to pay the minimum base energy charge, irrespective of the consumption, in case the consumption was lower than the contracted demand or if the consumption was higher then as per actual consumption. 4. Remission used to be demanded or claimed by a consumer in terms of the 1993 tariff on an annual basis depending on the figures, which was provided by the respondent-Bihar State Electricity Board in relation to the hours of supply. Bills for Annual Minimum Guarantee used to be raised once a year and remissions, if any, used to be claimed accordingly. But by brining changes in the tariff provision of year 2006, the annual minimum guarantee charge was termed as minimum base energy charge and bills were to be raised monthly. 5. According to the petitioners, they have no problem as such with regard to the tariff as such, but the manner in which the benefit of remission, which exist in terms of Clause 13 of the Agreement seem to be nullified, not on the basis of the tariff provision, but on the interpretation, which is sought to be given by the respondent-Bihar State Electricity Board which irks them. 6. 6. Bills have been raised against the petitioners in terms of Annexure- 5 on the basis of a presumption that the respondent-Board has been supplying energy to the consumers 24 hours a day for 30 days and the calculation or the demand has been raised on that basis. 7. Taking an example in the case of first petitioner (C.W.J.C. No. 3607 of 2007) the minimum monthly chargeable unit shown in the bill under challenge is 17496 units. This unit has been arrived at by multiplying the contract demand of 90 K.V.A. with load factor of 30 per cent and power factor of 90 per cent, for 30 days, 24 hours on all the days, meaning thereby 90 x 0. 9x 0.3 x 30 x 24 = 17496. The argument made on behalf of the petitioners is that by working out or by raising a demand in the above manner of calculation additional liabilities are sought to be created upon a consumer even when there has not been supply on all the 30 days and for 24 hours a day. It cannot be the case of the respondent-Bihar State Electricity Board that they have capacity and capability to provide non-stop electricity for 24 hours a day for 30 days to any unit or industry. In other words, the benefit, which was sought to be given to such High Tension Consumers by raising a demand on the annual basis and grant of remission for non-period of supply is sought to be taken away by the respondent-Bihar State Electricity Board by adopting a mechanism or calculation, which has not been envisaged in Clause 1.1.(ii). The petitioners have no objection to the monthly bill, being raised, but then the monthly bill cannot be worked out in a mechanical fashion by presuming a supply to the extent of 30 days 24 hours a day. The shut-downs and non-supply have to be factored into such raising of demands. Merely changing the billing pattern from an yearly to monthly basis cannot absolve the respondent-Bihar State Electricity Board of what they are required to do in terms of not only the minimum base energy charge on the contract demand, but also on their obligation to supply energy on a regular basis. Merely changing the billing pattern from an yearly to monthly basis cannot absolve the respondent-Bihar State Electricity Board of what they are required to do in terms of not only the minimum base energy charge on the contract demand, but also on their obligation to supply energy on a regular basis. Counsel for the petitioners relies on a decision rendered by the Hon'ble Supreme Court in the case of Raymond Ltd. Versus M. P. Electricity Board, reported in (2001) 1 Supreme Court Cases 534. A similar kind of dispute had arisen with regard to minimum guarantee charge and the obligation of a consumer to pay under the standardized agreement with the State Electricity Board. The Hon'ble Apex Court after taking into consideration the various facets of law as well as the terms and conditions of the agreement crystallized its opinion with regard to obligation of a consumer as well as State Electricity Boards on the basis of such agreements relating to minimum guarantee. Petitioner relies upon paragraph 21 of the said decision, which has succinctly laid down the law as well as the obligation of a consumer as well as the supplier, i.e., the Board. Paragraph 21 reads as under: “21. So far as the cases under consideration and the liability of the consumers relating to minimum guarantee are concerned, the relevant clause relating to minimum guarantee charges as well as the tariff notification relied upon, would go to show that what was guaranteed was not the payment of a flat sum or amount of money to be calculated with reference to a particular number or percentage of units, dehors the quantum of electrical energy distributed and supplied by the Board. In other words, the guarantee was of “... such minimum consumption as when calculated at the tariff ...” will yield a particular monthly / annual sum to the Board. Even going by the tariff notification which prescribes also a minimum entitling the Board to collect it [vide clause 21(b)] it merely casts liability on the consumer to “guarantee a minimum monthly consumption equivalent to 40% load factor of the contract demand”. Even going by the tariff notification which prescribes also a minimum entitling the Board to collect it [vide clause 21(b)] it merely casts liability on the consumer to “guarantee a minimum monthly consumption equivalent to 40% load factor of the contract demand”. Consequently, for the consumer to honour his / its commitment so undertaken to give a minimum consumption there should essentially be corresponding supply by the Board at least to that extent, without which the consumption of the agreed minimum is rendered impossible by the very lapse of the Board. The minimum guarantee, thus, appears to be not in terms of any fixed or stipulated amount but in terms of merely the energy to be consumed The right, therefore, of the Board to demand the minimum guaranteed charges, by the very terms of the language in the contract as well as the one used in the tariff notification is made enforceable depending upon a corresponding duty, impliedly undertaken to supply electrical energy at least to that extent, and not otherwise (emphasis mine). It is for this and only reason we find that the ultimate conclusion arrived at by the Full Bench of the High Court does not call for any interference in these appeals.” Counsel representing the State Electricity Board when confronted with the above decision of the Hon'ble Apex Court, takes a stand that the said decision has no application to the bundle of facts in the present case in the sense that the tariff provision has undergone a change. The billing of the annual minimum guarantee charges used to be made once a year prior to 2006 tariff being notified. Once the same has been changed to a monthly basis, the obligation of the Electricity Board is limited to the extent of supply of energy of 30 per cent of the load factor. If the same is taken into consideration by their formula and calculation, the maximum supply which the respondents are required to make is for 7.20 hours in a day. If supply of energy has been made to any of these petitioners to the above extent, then it does not matter whether the calculation is done on the basis of 24 hours supply for 30 days or less. If supply of energy has been made to any of these petitioners to the above extent, then it does not matter whether the calculation is done on the basis of 24 hours supply for 30 days or less. In alternative, it is also urged that by virtue of the new amendment in tariff provision, contained in Clause 1.1 (ii) and reading of Clause 14 of the agreement, Clause 13 becomes redundant. In other words, the remission, which was provided for in the agreement no longer has any meaning and the new amended tariff provision will have the effect of modifying the terms and conditions of the agreement automatically, as and when enforcement of a new tariff rate for a consumer is brought about. According to them Clause 13 of the Agreement has become infructuous and is of no avail any more to any of the consumer after 2006. If the Court takes into consideration the ratio of the decision of the Apex Court, as reproduced in earlier part of the Order, then there is some difficulty in accepting the rigid stand taken by the respondent-Bihar State Electricity Board in the manner in which they are calculating the demand charge upon the petitioners in a mechanical fashion. If the calculation which has been shown by the petitioner in the rejoinder is taken into consideration, then the unit which has been shown in the bills has been worked out on the basis as has been noticed in earlier part of the Order. No other calculation will give the final figure which has been demanded or claimed from the petitioners by way of energy charges which are subject matter of challenge in the Writ Application. If the component of supply for 30 days for 24 hours a day is reduced in any manner, then the final figure or demand which had been raised by the respondent-Bihar State Electricity Board can never be worked out. The formula applied in calculation by the Board is based on a presumption of 24 hours and 30 days of non-stop supply, meaning thereby that the periods of non-supply have no meaning. Such an interpretation has serious fall out for such consumers. The formula applied in calculation by the Board is based on a presumption of 24 hours and 30 days of non-stop supply, meaning thereby that the periods of non-supply have no meaning. Such an interpretation has serious fall out for such consumers. If that be so, then the Court is in agreement with the submission made by the counsel representing the petitioners that there has been no change with regard to the remission which a consumer is entitled to beget due to non-supply because the liability of the Board is not limited to making supply to the extent of 30 per cent of the load factor and 90 per cent of the power factor, but is much more, as has been observed by the Hon'ble Apex Court in the case of Raymond Ltd. (supra). There is no conflict or dispute with regard to the provision or amendment brought about in the tariff provision of 2006, especially Clause 1.1 (ii), but it is the interpretation which has sought to be given by the respondent-Bihar State Electricity Board to work out the liability of a consumer by adopting a mechanical formula not supported by the tariff provision or law by which such billing can be made or raised. If that is so, then the Court is constrained to record that respondent-Bihar State Electricity Board is trying to enrich itself at the cost of the High Tension Consumers without meeting its obligations of effecting supply of energy to the extent and in the manner in which they are required to do. There is, therefore, a flaw in the manner of calculation on which the demand has been raised upon the petitioners, contained in Annexure – 5 in all the three Writ Applications, which stand quashed. The Writ Applications are allowed. The respondents are directed, therefore, to work out the charges may be on a monthly basis, but keeping in mind the hour of supply made to the consumer / petitioners for the period in question. The Writ Applications are allowed. The respondents are directed, therefore, to work out the charges may be on a monthly basis, but keeping in mind the hour of supply made to the consumer / petitioners for the period in question. The Court is of the opinion that the new provision, which is being talked about by the respondent-Bihar State Electricity Board in Clause 1.1 (ii) in no manner has the effect of negating the effect of Clause 13 of the Agreement or in no manner Clause 13 becomes infructuous, as is the stand taken by them, by any reading of the provision of the tariff, as well as Clause 13 and 14 of the Agreement till clause 13 remains. Writ Applications are allowed as above.