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2015 DIGILAW 216 (GUJ)

PASCHIM GUJARAT VIJ CO v. ELECTRICAL INSPECTOR

2015-02-23

ABHILASHA KUMARI

body2015
JUDGMENT 1. Rule. Mr. Udit D. Mehta, learned Assistant Government Pleader, waives service of notice of Rule for respondent No.1 and Mr. B.M. Vaishnav, learned advocate, waives service of notice of Rule for respondent No.2. On the facts and in the circumstances of the case and with the consent of learned counsel for the respective parties, the petition is being heard and decided finally. 2. By way of this petition, preferred under Article 226 of the Constitution of India, the petitioner Paschim Gujarat Vij Company Limited (PGVCL) has challenged the order dated 13.08.2013, passed by the Appellate Authority, setting aside the final bill adjudicated by the Competent Authority and directing the petitioner to issue a fresh bill. 3. The brief facts of the case are as follows: 3.1 The petitioner is a Company registered under the Companies Act, 1956, and is operating in the Western Zone of Gujarat. The petitioner is a Distribution Licencee under the provisions of the Electricity Act, 2003 (“the Act” for short) and a subsidiary Company of Gujarat Urja Vikas Nigam Limited. Respondent No.2 is a consumer of the petitioner, having been provided with an electricity connection for industrial purposes on the premises in question. The petitioner entered into an agreement with respondent No.2 and initially, a contractual load of 19.4 Horse Power (HP) was sanctioned. Subsequently, respondent No.2 made an application on 30.12.2009, for extra load of 75.32 HP, totalling to 95.00 HP, at Shed No.K1 43/2. After completing the formalities, the extra load was sanctioned to respondent No.2 for the particular premises. It is the case of the petitioner that along with the application, respondent No.2 did not submit any document suggesting that she had entered into a partnership with any person, or that the shed at K1 43/2, or at the adjoining premises, was being used by a partnership concern. On the strength of the application and the undertaking for payment of prescribed charges given by respondent No.2, the extra load was sanctioned on 26.03.2010, for the premises occupied by the petitioner for industrial purposes, namely, for an emery stone concern. A raid was conducted on the premises of respondent No.2 on 23.09.2011, and it was found that the extra load of 75.32 HP had been diverted for the purpose of sale to one Gopal Ice Factory, a tenant of respondent No.2. A raid was conducted on the premises of respondent No.2 on 23.09.2011, and it was found that the extra load of 75.32 HP had been diverted for the purpose of sale to one Gopal Ice Factory, a tenant of respondent No.2. A Checkingsheet was prepared in the presence of a representative of the tenant of respondent No.2. It was further found that the sub meter had been installed in the premises, which was connected with the main meter and was being used by the tenant of respondent No.2. It was further found that the said meter was in the very same premises occupied by the petitioner though there were two separate buildings. On the basis of the Checkingsheet, the Competent Authority prepared a Provisional Bill of Rs.10,07,235/- under Section 126(1) of the Act. After following the procedure under the said provision of law and considering the objections raised by respondent No.2, the Competent Authority finally assessed the amount of the Supplementary Bill at Rs.4,66,144.97 Paisa. Aggrieved by the final bill, respondent No.2 preferred a statutory appeal under Section 127 of the Act before respondent No.1 Appellate Authority. Respondent No.1 allowed the appeal, by setting aside the final bill dated 15.09.2012, on the ground that there was no sale of electricity and respondent No.2 had produced a document of the Partnership Deed dated 01.04.2011, between her and Gopal Ice Factory. Aggrieved by the abovestated order passed by respondent No.1, the petitioner is before this Court. 4. Mr. M.D. Rana, learned advocate for the petitioner, has submitted that the impugned order dated 13.08.2013, passed by the Appellate Authority is illegal, invalid and against the provisions of the Act and the Gujarat Electricity Regulatory Commission (Electricity Supply Code and Related Matters) Regulations, 2005. The Appellate Authority has not taken into consideration the fact that when respondent No.2 applied for the extra load of 75.32 HP in the month of December, 2009, no Partnership Deed was produced by her and neither was any information given to the petitioner regarding the existence of any partnership. Nor was any mention made of Gopal Ice Factory being a tenant on the premises. The application for extra load was made by respondent No.2 in December, 2009 and was finally sanctioned on 26.03.2010, solely for the industrial purpose of running a unit of emery stone (diamond polishing unit). The extra load was not sanctioned for running an Ice Factory. Nor was any mention made of Gopal Ice Factory being a tenant on the premises. The application for extra load was made by respondent No.2 in December, 2009 and was finally sanctioned on 26.03.2010, solely for the industrial purpose of running a unit of emery stone (diamond polishing unit). The extra load was not sanctioned for running an Ice Factory. The application for extra load does not indicate or refer to any alleged Partnership Deed. In any case, the Partnership Deed is dated 01.04.2011, which is much later than the date of the application for extra load. It is submitted that the finding that there is no unauthorised use of electricity by respondent No.2 is incorrect as, admittedly, Gopal Ice Factory was running in the same premises as the emery stone concern of the petitioner, and that too without disclosing this fact to the petitioner. 4.1 It is contended that the Appellate Authority has issued directions contrary to Section 126 of the Act. The Appellate Authority ought to have considered that Gopal Ice Factory is a different concern than the concern of emery stone for which the extra load was sanctioned. No documents were produced by respondent No.1 indicating any partnership before the petitioner. The Partnership Deed is not registered and is no partnership in the eye of law. Nothing prevented respondent No.2 from producing the Partnership Deed at the time of making the application for enhancement of load. 4.2 That as per explanation to (b) (iv) of Section 126 of the Act, if electricity is used for purposes other than for which its usage is authorised, it constitutes authorised use of electricity. Further, as per explanation (b) (v), if electricity is used for premises or areas other than those for which the usage of electricity is authorised, it also constitutes unauthorised use of electricity. The present case would fall under both the above clauses of the explanation. 4.3 In support of the above submissions, reliance has been placed by the learned advocate for the petitioner, on a judgment of a Division Bench of this Court in the case of Paschim Gujarat Vij Co. Ltd. vs. Paras Ship Breakers Ltd. reported in 2010(2) GLH 626 . 5. Mr. 4.3 In support of the above submissions, reliance has been placed by the learned advocate for the petitioner, on a judgment of a Division Bench of this Court in the case of Paschim Gujarat Vij Co. Ltd. vs. Paras Ship Breakers Ltd. reported in 2010(2) GLH 626 . 5. Mr. Udit D. Mehta, learned Assistant Government Pleader, has supported the order of the Appellate Authority, by submitting that the said order is not vitiated by any illegality or irregularity so as to invite the Court’s interference. 6. Mr. B.M. Vaishnav, learned advocate for respondent No.2, has opposed the submissions advanced on behalf of the petitioner and has submitted that the entire consumption of electricity was used by respondent No.2, including that for the emery stone concern and the same has been fully recorded in the meter. Respondent No.2 has already paid for it and no financial loss has been caused to the petitioner. In such circumstances, no assessment under Section 126 of the Act was called for. 6.1 That the Appellate Authority has rightly held that when a new meter was installed on 26.03.2010 in the premises of respondent No.2, she was using a load of 95.00 HP for industrial purpose only. Hence, there is no change of purpose for the electricity used by respondent No.2. 6.2 That the Appellate authority has rightly held that the petitioner has sanctioned the additional load for industrial purposes, only, under LTP1 Tariff. Therefore, respondent No.2 is entitled to utilize the additional load for industrial purpose. 6.3 That the Appellate Authority has rightly held that the tariff for the use of emery stone as well as the Ice Factory is one and the same, that is, LTP1, therefore, since there is no change in purpose for the use of electricity, it cannot be said that there is unauthorised use of electricity. 6.4 It is further submitted on behalf of respondent No.2 that the Appellate Authority has rightly held that since the Competent Authority of the State Government, namely, the Collector of Electricity Duty, has directed to recover the electricity duty at the rate of 10%, the petitioner licencee is required to revise the assessment accordingly. The assessment is required to be revised on the basis of the load actually found unauthorisedly used after deducting the consumption of electricity for which the consumer has already paid to the petitioner. The assessment is required to be revised on the basis of the load actually found unauthorisedly used after deducting the consumption of electricity for which the consumer has already paid to the petitioner. 6.5 That the Appellate Authority was required to allow the appeal totally by quashing the assessment entirely, in view of the violation of subsection (1) of section 126 of the Act. However, the appeal has only been partly allowed and the petitioner has been directed to revise the assessment for the unauthorized load of 19.04 HP proportionate to the consumption of 20,628 units on prorata basis for the entire period of 365 days. Therefore, it cannot be said that the contentions raised by the petitioner have not been taken into consideration by the Appellate Authority. 6.6 On the above grounds, it is prayed that the petition be dismissed. 7. This Court has heard learned counsel for the respective parties, perused the averments made in the petition, contents of the impugned order and other documents on record. 8. The admitted facts are as under: (a) Respondent No.2 is a consumer of the petitioner, having been granted an electricity connection for the industrial purpose of running an emery stone concern, with a contractual load of 19.04 HP, as per the initial agreement entered into between the petitioner and respondent No.2. (b) On 30.12.2009, respondent No.2 made an application for enhancement of the load by 75.32 HP, totalling to 95.00 HP, for the same premises, that is, Shed No. K1 43/2. A copy of the said application has been produced at Annexure-A with the petition. There is no mention in the application regarding any partnership entered into by respondent No.2, with any other person or entity. Moreover, the name of Gopal Ice Factory does not find mention therein. It is also not reflected in the application that respondent No.2 has a tenant on the same premises, by the name of Gopal Ice Factory, and the extra load is required for use by the tenant/partner Gopal Ice Factory. (c) The application for extra load was sanctioned in favour of respondent No.2 on 26.03.2010, for the purpose of the emery stone concern. (d) When the Officers of the petitioner conducted a raid in the premises of the petitioner, it was found that the extra load of 75.32 HP had been diverted for the purpose of sale to Gopal Ice Factory. (d) When the Officers of the petitioner conducted a raid in the premises of the petitioner, it was found that the extra load of 75.32 HP had been diverted for the purpose of sale to Gopal Ice Factory. It was further found that a submeter had been installed in the premises, which was connected to the main meter being used by the tenant of respondent No.1, namely, Gopal Ice Factory. These facts are reflected in the Checkingsheet prepared in the presence of the representative of the tenant of respondent No.2. (e) Before the Appellate Authority, respondent No.2 produced a Partnership Deed dated 01.04.2011, on the basis of which, the Appellate Authority arrived at a conclusion that the extra load of electricity was used by the partner Gopal Ice Factory, which was a partner of respondent No.2 and the purpose for such use was industrial, which is the same purpose for which the electricity connection was sanctioned in favour of respondent No.2. Hence, there was no change in tariff. (f) The date of the Partnership Deed is 01.04.2011. This clearly reveals that it was not in existence on 30.12.2009, when the application for enhancement of load was made by respondent No.2. The extra load was sanctioned by the petitioner, obviously without any knowledge of the Partnership Deed, which did not exist at that point of time. Nothing was mentioned by respondent No.2 in the application regarding a tenant in the premises by the name and style of “Gopal Ice Factory”. Admittedly, there is no mention in the application of the partnership allegedly entered into by respondent No.2 with Gopal Ice Factory. 9. Considering the above undisputed facts, it would be fruitful to advert to the provisions of Section 126 of the Act, which deal with the procedure to be followed in a case of unauthorised use of electricity. The said provision is reproduced hereinbelow: “126. Assessment. 9. Considering the above undisputed facts, it would be fruitful to advert to the provisions of Section 126 of the Act, which deal with the procedure to be followed in a case of unauthorised use of electricity. The said provision is reproduced hereinbelow: “126. Assessment. (1) If on an inspection of any place or premises or after inspection of the equipments, gadgets, machines, devices found connected or used, or after inspection or records maintained by any person, the assessing officer comes to the conclusion that such person is indulging in unauthorised use officer comes to the conclusion that such person is indulging in unauthorised use of electricity, he shall provisionally assess to the best of his judgment the electricity charges payable by such person or by any other person benefited by such use. (2) The order of provisional assessment shall be served upon the person in occupation or possession or in charge of the place or premises in such manner as may be prescribed. (3) The person, on whom an order has been served under sub-section (2), shall be entitled to file objections, if any, against the provisional assessment before the assessing officer, who shall, after affording a reasonable opportunity of hearing to such person, pass a final order of assessment within thirty days from the date of service of such order or provisional assessment, of the electricity charges payable by such person. (4) Any person served with the order of provisional assessment may, accept such assessment and deposit the assessed amount with the licensee within seven days of service of such provisional assessment order upon him. (5) If the assessing officer reaches to the conclusion that unauthorised use of electricity has taken place, the assessment shall be made for the entire period during which such unauthorised use of electricity has taken place and if, however, the period during which such unauthorised use of electricity has taken place cannot be ascertained, such period shall be limited to a period of twelve months immediately preceding the date of inspection. (6) The assessment under this section shall be made at a rate equal to [twice] the tariff applicable for the relevant category of services specified in subsection (5). Explanation. (6) The assessment under this section shall be made at a rate equal to [twice] the tariff applicable for the relevant category of services specified in subsection (5). Explanation. For the purposes of this section, (a) “assessing officer” means an officer of a State Government of Board or licensee, as the case may be, designated as such by the State Government; (b) “unauthorised use of electricity” means the usage of electricity (i) by any artificial means; or (ii) by a means not authorised by the concerned person or authority or licensee; or (iii) through a tampered meter; or (iv) for the purpose other than for which the usage of electricity was authorised; or (v) for the premises or areas other than those for which the supply of electricity was authorised.” (emphasis supplied) 10. As per explanation (b) (iv) of Section 126 of the Act, unauthorised use of electricity includes use thereof for a purpose other than that for which the usage of electricity is authorised or, as per (b) (v), in the premises or areas other than those for which the supply of electricity was authorised. 11. Thus, it may be seen that the scheme of Section 126 of the Act provides an effective mechanism to deal with unauthorised use of electricity. What constitutes “unauthorised use of electricity” has been adequately explained and illustrated in the explanations to Section 126 of the Act. Simply put, it means that use of electricity for a purpose and area not authorized by the Electricity Company is categorized as an unauthorised use of electricity. 12. In Paschim Gujarat Vij Co. Ltd. vs. Paras Ship Breakers Ltd. (Supra) relied upon by the learned advocate for the petitioner, a Division Bench of this Court has held as below: “10.1 Thus the use of electricity in many ways not authorized by Electricity Company is categorised as “unauthorized use of electricity.” In view of sub-clause (v) of clause (b), there is no doubt in our mind that in the present case, consumer must be stated to have made unauthorized use of electricity. Admittedly, the premises of plot no.2/B or 4 were not the premises or area on which electricity supply was authorized. Undisputedly, as is apparent from the application of the consumer for obtaining electricity supply, the plot on which such connection was to be granted and was to be used has been clearly specified. Admittedly, the premises of plot no.2/B or 4 were not the premises or area on which electricity supply was authorized. Undisputedly, as is apparent from the application of the consumer for obtaining electricity supply, the plot on which such connection was to be granted and was to be used has been clearly specified. When the consumer on its own will without specific permission from the Electricity Company, extended the connection by joining wires and used the same for running its factories, on plot no. 2/B or 4, the consumer clearly made unauthorized use of electricity. We are conscious that sub-clause (v) of clause(b) to the explanation under Section 126 was added by the amending Act No. 26/2007 with effect from 15.6.2007. In all cases arising subsequent to said date therefore, by virtue of said clause, our task has become quite simple. 10.2 *** *** *** 10.3 *** *** *** 10.4 *** *** *** 10.5 Coming back to the question on hand, we find that Section 126 of the Act seeks to curb unauthorized use of electricity by any person. Such consumption through unauthorized use is charged at double the normal tariff. Explanation (b) to Section 126 even prior to addition of sub-clause (v) therein included variety of uses of electricity not authorized by the Company in the term unauthorized use of electricity. Considering the scheme of Section 126 and the object sought to be achieved, it can be clearly seen that the explanation finds place not by way of a substantive provision but merely to explain or clarify or remove ambiguities if any, in the statutory provision and to provide an additional support to the dominant object of the Section. By providing explanation (b) to Section 126, the legislature did not intend to limit in any manner the import of the term unauthorized use of electricity' used in Section 126. Seen from this angle, it becomes clear that addition of sub-clause (v) in the explanation clause (b) to Section 126 of the Act was only a declaratory or clarificatory amendment in nature and would apply to and cover all cases whether arising before or after the said sub-clause (v) was introduced. Seen from this angle, it becomes clear that addition of sub-clause (v) in the explanation clause (b) to Section 126 of the Act was only a declaratory or clarificatory amendment in nature and would apply to and cover all cases whether arising before or after the said sub-clause (v) was introduced. 10.6 Quite apart from the above conclusion that we have reached we are of the opinion that case of the consumer would also fall under sub-clause(iv) of Clause(b) of the explanation namely for the purpose other than for which the usage of electricity was authorized From the original application filed by the consumer for grant of electricity connection, it can be seen that in item no.13 to a question Whether supply is asked for (i) expansion or (ii) extension of the existing industry or (iii) for altogether anew industry in the State, the consumer had stated New Industry. The exact location (namely plot no.5) where the factory of the consumer was situated was also indicated along with the said application. Thus the purpose for which electricity connection was demanded and granted was for setting up a new industry in plot no.5. Any other use would be covered also under Subclause(iv) of clause(b) of the explanation namely for the purpose other than for which the usage of electricity was authorised. 28. We also cannot lose sight of the fact that the Electricity Companies have to manage their affairs on the basis of estimated demand of electricity. Such estimation can be made only on the basis of particular load authorized to the consumer. Permitting such extensions without any restrictions would result into as has happened in the present case, drawing of electricity in excess of authorised load. Such rampant use would effectively destroy all the estimates of the company. Electricity Company cannot operate under rampant overdrawal of authorized load.” (emphasis supplied) 13. In the present case, though the extra load was sanctioned for the same premises used by respondent No.2 for the emery stone concern, it was, in fact, used by respondent No.2 for the running of Gopal Ice Factory, located in a different building in the same premises. The purpose for the use of electricity was different to that for which respondent No.2 was authorised by the petitioner. The purpose for the use of electricity was different to that for which respondent No.2 was authorised by the petitioner. The electricity connection was sanctioned to respondent No.2 for industrial use for the emery stone concern and the extra load was also sanctioned for the same purpose, and not for the purpose of running an Ice Factory. As such, the case of the petitioner would fall under explanation (b) (iv) and (v) of Section 126 of the Act and, in the view of this Court, it would fall under the definition of unauthorised use of electricity. 14. Respondent No.2 has not disclosed anything regarding the tenancy or partnership, as the case may be, while making the application for enhancement of load, on 30.12.2009. This is clear from a copy of the the said application. Nothing prevented respondent No.2 from disclosing this fact to the petitioner at the time of making the application. The petitioner has sanctioned the extra load for the emery stone concern and not for Gopal Ice Factory. The emery stone concern is a diamond polishing unit and Gopal Ice Factory manufactures ice. Both the purposes are different and may entail usage of different quantities of electricity. Respondent No.2 was authorised to use the electricity connection specifically for the industrial purpose of running an emery stone concern and not the Ice Factory. By extracting power from the main meter and installing a submeter for use in the Ice Factory, without permission from the petitioner, it would amount to an “unauthorised use of electricity”. 15. When the premises were raided, it was found that respondent No.2 was using the extra load of 75.32 HP by diverting it to Gopal Ice Factory. A submeter had been installed in the premises, which was connected to the main meter. This has clearly been done without the permission of the petitioner, therefore, it would constitute an unauthorised use of electricity. 16. It is clear from a perusal of the impugned order, that what has weighed with the Appellate Authority, is the Partnership Deed dated 01.04.2011 and the aspect that the use of electricity for Gopal Ice Factory is also an industrial use. According to the Appellate Authority, as there was no change in tariff and respondent No.2 had paid the electricity bills, the Supplementary Bill issued by the petitioner was not in order. According to the Appellate Authority, as there was no change in tariff and respondent No.2 had paid the electricity bills, the Supplementary Bill issued by the petitioner was not in order. This aspect has been elaborated upon by the learned advocate for respondent No.2, in his submissions. 17. It may be noted that when respondent No.2 made an application for enhancement of the load on 30.12.2009, the Partnership Deed was not even in existence. The application for enhancement of load was made on 30.12.2009 and was sanctioned on 26.03.2010. Respondent No.2 did not disclose to the petitioner, any information regarding any Partnership Deed or the induction of a tenant in the premises. For the first time, the Partnership Deed surfaced before the Appellate Authority and found favour with it. On the strength of the Partnership Deed and the aspect that the use of electricity by Gopal Ice Factory is also for industrial purpose, the Appellate Authority has directed the petitioner to revise the Supplementary Bill by holding that there is no unauthorised use of electricity on the part of respondent No.2. 18. After considering the submissions advanced by the learned counsel for the respective parties and the reasons recorded in the impugned order, this Court is unable to agree with the conclusions arrived at by the Appellate Authority. It may be true that the use of electricity for the manufacture of ice may amount to industrial use and the electricity connection was sanctioned in favour of respondent No.2 for industrial purposes. However, that does not give respondent No.2 any leave or licence to extract energy from the main meter and divert it to the socalled tenant/partner by installing a submeter without disclosing anything regarding the partnership or tenancy in her application for enhancement of load. Respondent No.2 cannot use electricity sanctioned for an emery stone concern in an Ice Factory without permission from the petitioner. In any case, use of electricity for a purpose other than the one for which it is sanctioned is an unauthorised use. The aspect that use of electricity for the emery stone unit and the Ice Factory is an industrial purpose, cannot be considered to be a mitigating factor. The petitioner has not permitted the extra load for use for a different purpose. The emery stone unit for which the electricity connection has been sanctioned is distinct from an Ice Factory. The aspect that use of electricity for the emery stone unit and the Ice Factory is an industrial purpose, cannot be considered to be a mitigating factor. The petitioner has not permitted the extra load for use for a different purpose. The emery stone unit for which the electricity connection has been sanctioned is distinct from an Ice Factory. There is no doubt that the petitioner has diverted electricity from the main meter for use in the Ice Factory, without authorisation. 19. Respondent No.2 might have paid the bills for consumption of electricity, but when an unauthorised use of electricity is discovered, sub-section (6) of Section 126 comes into play and the Supplementary Bill is to be calculated in conformity with the same. The reasoning of the Appellate Authority, and the conclusion arrived at on the basis of such reasoning, is not in consonance with law. On the contrary, it militates against the provisions of Section 126 of the Act. The view of this Court is fortified by the observations of the Division Bench of this Court in Paschim Gujarat Vij Co. Ltd. vs. Paras Ship Breakers Ltd. (supra). 20. This Court is of the view that the act of respondent No.2 in diverting the extra load sanctioned to it for the emery stone concern to the Ice Factory without authorisation or permission, is not an innocuous act but amounts to an unauthorised use of electricity. This vital aspect has been overlooked by the Appellate Authority while passing the impugned order. 21. For the aforestated reasons, the impugned order dated 13.08.2013, passed by the Appellate Authority deserves to be quashed and set aside. Accordingly, it is quashed and set aside. 22. The petition is allowed in the above terms. Rule is made absolute, accordingly. There shall be no orders as to costs.