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Karnataka High Court · body

2014 DIGILAW 1017 (KAR)

Kanoria Industries Limited v. Hubli Electricity Supply Company Limited

2014-11-26

ANAND BYRAREDDY

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Judgment 1. Heard the learned counsel for the petitioner and the learned counsel for the respondents. 2. The petitioner was said to be an industry who was in arrears of payment of electricity charges in a total sum of Rs.55,28,195/-. It transpires that the petitioner had issued a cheque, in partial discharge of the outstanding amount in a sum of Rs.30,00,000/-, dated 12.12.2005, drawn on Syndicate Bank, Bagalkot. It however transpires that the cheque was dishonoured and returned unpaid. Since the last date for payment of the dues was fixed, the petitioner had immediately issued a pay order for a sum of Rs.55,28,195/-dated 16.12.2005, which was duly encashed by the respondents. However, the respondents chose to impose a penalty of Rs.60,000/- in terms of Regulation 29.05 (d) of the Electricity Supply and Distribution Code, 2001, (hereinafter referred to as 'the Code', for brevity) which provides that in the event of non-realisation of a cheque, no further cheques shall be accepted from such Consumer without prejudice to the Licensee taking action, such as levying cheque dishonour fee as per Section 30.18 and initiating other action as per law. It is further provided under Regulation 30.18 of the Code, as follows: "30.18 CHARGES FOR NON-REALISATION OF CHEQUE IS AS NOTED BELOW (CHEQUE DISHONOUR FEE) 1 Cheque amount upto Rs. 10000/- 5% of amount subject to minimum of Rs. 100/- 2 Cheque amount subject to Rs. 10,000/- and Rs. 1,00,000/- 3% of amount subject to minimum of Rs. 500/- 3 Cheque amount above Rs. 1,00,000/- 2% of amount subject to minimum of Rs. 3,000/- The respondents are said to have invoked Item No.3, since the cheque issued by the petitioner was for a sum of Rs.30,00,000/- and have sought to collect 2% of the amount, namely Rs.60,000/-. It is that which is under challenge in the present petition. But, the petitioner even before challenging the said levy, has paid the amount, under protest, and has then filed this petition. 3. The question for consideration before this Court is, whether the respondents were justified in imposing such a charge or fee in the circumstances of the case. 4. As seen from the tabular form prescribing the rate at which such fee could be imposed, there is a discretionary power made available to the respondents of imposing a minimum amount and a maximum amount. 4. As seen from the tabular form prescribing the rate at which such fee could be imposed, there is a discretionary power made available to the respondents of imposing a minimum amount and a maximum amount. Hence, the range within which such a fee would be imposed would be apparently dependant on the loss or the disadvantage that has occasioned to the respondents. 5. In the instant case, the disadvantage that has resulted to the respondents is that there is a belated payment of the amount, though within the last date prescribed. In that, if the respondents had received the sum of Rs.30,00,000/-as intended, they would have gained the benefit of that amount on the date of realisation which they ultimately did have on realisation of the amount covered under the pay order, which was issued immediately thereafter, after the cheque, issued in the first instance, was dishonoured. Therefore, the loss if at all is partial and is not relatable to the amount that is sought to be levied as "cheque dishonour fee" and hence, it was unreasonable. One other aspect which would enable the petitioner to succeed in this petition is the circumstance that the entire amount of Rs.60,000/- was deposited with the respondents immediately on the demand, under protest, and the respondents have had the benefit of that amount till date and even if nominal interest is calculated on the amount of Rs.60,000/-and the period being almost 10 years, the respondents would have derived the same amount of Rs.60,000/- by way of interest on the said amount. Therefore, the petitioner has made out a case for intervention. Accordingly, the petition is allowed. However, in the circumstances of the case and in order not to dilute the provision under which the respondents have sought to collect this amount, it would be reasonable to hold that the respondents are entitled to withhold Rs.10,000/- out of Rs.60,000/- deposited by the petitioner. Further, the respondents shall adjust the amount of Rs.50,000/- towards the power supply charges to the petitioner, in due course.