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2016 DIGILAW 783 (JHR)

Jharkhand Urja Vikas Nigam Ltd. v. Lord Balajee Manufacturing Steel Pvt. Ltd.

2016-05-05

SHREE CHANDRASHEKHAR, VIRENDER SINGH

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JUDGMENT : Virender Singh, J. Admit. 2. With the consent of the counsel for the parties, the Letters Patent Appeals are taken up for final consideration. 3. The learned counsel for the parties submit that the present Letters Patent Appeals involve identical question of law which can be decided without elaborately referring to the facts in each case. For better appreciation of the issue involved in the Letters Patent Appeals, the brief facts in LPA No. 333 of 2015 are noticed hereunder : M/s Lord Balajee Manufacturing Steel Pvt. Ltd is a HTSS consumer with Contract Demand of 1200 KVA. Aggrieved of the energy bills raised by the Electricity Board, the consumer approached VUSNF in Case No. 28/2007 for revising the energy bills from January,2004 on the basis of actual recorded KVA and not on the basis of 100 per cent Contract Demand. Vide order dated 06.12.2007, the VUSNF ordered monthly energy bills on the basis of actual KVA recorded in the meter as maximum demand in each month and the Electricity Board was directed to adjust the excess amount realised from the consumer in the subsequent energy bills with interest, in terms of Supply Code Regulations. The order passed by the VUSNF was affirmed by the Electricity Ombudsman vide order dated 9.5.2008 in Case No. EOJ/04/2008 and the writ petition filed by the Electricity Board vide W.P.(C) No. 3304/2008 challenging order dated 09.05.2008 was dismissed by the Writ Court on 19.02.2015. 4. The controversy which started with introduction of Tariff Order 2003-04 by the Jharkhand State Electricity Regulatory Commission (hereinafter referred to as JSERC) whether the 2004 Tariff Order would prevail over the agreement executed with the consumers and whether the 1999 Tariff fixed by the Bihar State Electricity Board now, Jharkhand Urja Vikas Nigam Limited insofar as, the 'Demand Charge' is concerned can be enforced, was set at rest by the judgment in 'Jharkhand State Electricity Board and others v. M/s Laxmi Business & Cement Co.Pvt. Ltd. and another' reported in (2014) 5 SCC 236 , has now been sought to be raised with a dash of twist that the controversy in the earlier proceeding was confined to HTS consumers whereas, the Nigam has now levied Demand Charge on the basis of 'Contract Demand' of HTSS consumers in terms of Clause-5 of 1999 Tariff. 5. 5. Before focusing on the dispute raised in the present proceeding, a brief history of the previous litigations needs to be recorded. 6. Before the Electricity Act, 2003 came into force on 10.06.2003, the Electricity Board was empowered to determine the operational rates at which the electricity was to be supplied to the consumers. Under Section 49 of the Electricity (Supply) Act, 1948, the Board was empowered to fix the terms and conditions and to frame uniform Tariff for supplying electricity to the consumers. The practise which prevailed at that time was that the Electricity Board required the consumers to enter into an agreement which provided 'Minimum Contract Demand'. In "The Jharkhand State Electricity Board v. M/s Kumardhubi Steels Pvt. Ltd.” reported in 2009 (3) JLJR 620 , the Vidyut Upbhokta Shikayat Nivaran Forum (VUSNF) accepted the challenge by the consumer to the energy bills raised by the Jharkhand State Electricity Board (JSEB) and directed the JSEB to revise the bills, which direction was affirmed by the Electricity Ombudsman and aggrieved thereof, the JSEB unsuccessfully approached the Writ Court and the order passed by the learned Single Judge was taken in appeal before the Hon'ble Supreme Court in Special Leave to Appeal (Civil) No. 20104/2009 however, the said petition was dismissed in-limine vide order dated 29.09.2009. In the said case, the plea taken by the JSEB was that in view of the saving Clause contained in the 2004 Tariff Order, the 1999 Tariff for raising Demand Charge can be enforced by the Board. The consumer, on the other hand, contended that after enactment of the Electricity Act, 2003 which repealed the Indian Electricity Act 1910 and the Electricity (Supply) Act, 1948, the Jharkhand State Electricity Regulatory Commission alone is empowered to frame Tariff Schedule and thus, the 1999 Tariff framed by the BSEB cannot be enforced and it is not saved by the saving Clause. A reading of the judgment in M/s Kumardhubi Steels Pvt. Ltd. case (supra) discloses that the learned Single Judge dismissed the writ petition mainly on the ground that the Board sought clarification from the Regulatory Commission on the point in dispute and the Regulatory Commission clarified that the 1999 Tariff cannot be enforced after the 2004 Tariff Order became effective. A reading of the judgment in M/s Kumardhubi Steels Pvt. Ltd. case (supra) discloses that the learned Single Judge dismissed the writ petition mainly on the ground that the Board sought clarification from the Regulatory Commission on the point in dispute and the Regulatory Commission clarified that the 1999 Tariff cannot be enforced after the 2004 Tariff Order became effective. Though, the Writ Court did not examine the contentions raised on behalf of the parties, in detail, the fact remains that the order passed by the Writ Court has been affirmed by the Hon'ble Supreme Court. 7. The second round of litigation started with the writ petition filed by M/s Laxmi Business & Cement Co. Pvt. Ltd. which was a HTS consumer. The grievance raised by M/s Laxmi Business & Cement Co. Pvt. Ltd. was to raising of energy bills on the basis of minimum 75% of the Contract Demand though, the maximum load recorded was less than 75% of the Contract Demand. The Electricity Board however, referred to a Clause in the supply agreement where under, the Board can levy Demand Charge on the basis of 75% of the Contract Demand or the actual consumption recorded, whichever is higher. One fact which was noticed by the Court was that in its Tariff petition the Electricity Board did not propose to continue with the provision for raising Demand Charge on the basis of 75% of the Contract Demand or the actual consumption, whichever is higher. The learned Single Judge noticing that similar contentions raised in M/s Kumardhubi Steels Pvt. Ltd case though, it was a HTSS category consumer, were rejected, held that the judgment in M/s Kumardhubi Steels Pvt. Ltd case was fully applicable in M/s Laxmi Business & Cement Co. Pvt. Ltd case. After the dismissal of the Letters Patent Appeal filed by the Jharkhand State Electricity Board against the order of the Writ Court, the controversy reached the Hon'ble Supreme Court which, as noticed above, stands settled by the judgment in “Jharkhand State Electricity Board and others v. Laxmi Business & Cement Company Pvt. Ltd. and another”, reported in (2014) 5 SCC 236 . 8. 8. In the present proceeding, the appellant-Jharkhand Urja Vikas Nigam Limited has once again sought to contend that Section 185 of the Electricity Act, 2003 would prevail the supply agreement executed prior to 10.06.2003 between the Electricity Board and the consumers and the appellant-Jharkhand Urja Vikas Nigam Limited can enforce Clause-5 of the 1999 Tariff which provides that the Demand Charge shall be levied on actual maximum demand recorded in the meter during the month or 100% of the Contract Demand, whichever is higher. 9. Mr. Ajit Kumar, the learned Senior Standing Counsel appearing for the appellant submits that the 2004 Tariff Order specifically records that the Commission did not change the basis for levying Fixed Charges. It is submitted that Clause-5 of the 1999 Tariff provides only the manner in which Demand Charges have to be levied and Clause-5 does not fix the Tariff for Demand Charge and while so, the appellant-Urja Vikas Nigam Limited cannot be restrained from calculating Demand Charge as prescribed under Clause-5 of the 1999 Tariff. Distinguishing the earlier decision in M/s Kumardhubi Steels Pvt. Ltd and M/s Laxmi Business & Cement Co. Pvt. Ltd cases, the learned Senior Standing Counsel referred to Table 5.27 which deals with HTS-I consumers and Table 5.35 and 5.36 which deal with HTSS consumers and submitted that for HTS-I consumers the Electricity Board did not propose the 1999 Tariff and it was held that the Electricity Board is bound by 2004 Tariff Order whereas, for HTSS consumers the Electricity Board specifically took a stand on Demand Charges to be levied on such consumers and therefore, it is empowered to levy Demand Charge on the basis of actual maximum demand recorded in the meter or 100% of the Contract Demand, whichever is higher. 10. Per contra, Mr. M.S. Mittal, the learned Senior Counsel for the respondent in LPA No.333 of 2015 reiterates the stand taken by the consumer before the Forum, the Electricity Ombudsman and the Writ Court and submits that the questions raised by the appellant have been conclusively answered by the Hon'ble Supreme Court in M/s Laxmi Business & Cement Co. Pvt. Ltd case. 11. The (Electricity Supply Code) Regulations, 2015 defines 'Consumption Charges' to mean charge payable for the consumption of electrical energy in KWh multiplied by appropriate Tariff rates, along with Demand/Fixed Charges, Fuel Surcharge Adjustment (FSA) and Customer and Other Charges etc., whichever is applicable. Pvt. Ltd case. 11. The (Electricity Supply Code) Regulations, 2015 defines 'Consumption Charges' to mean charge payable for the consumption of electrical energy in KWh multiplied by appropriate Tariff rates, along with Demand/Fixed Charges, Fuel Surcharge Adjustment (FSA) and Customer and Other Charges etc., whichever is applicable. Under Regulation 2.3(v) 'Contract Demand' and under Regulation 2.3(aa) 'Demand Charge' are defined as under: 2.3(v)- “Contract Demand” means demand in Kilowatt (kW) or Kilo Volt amperes (KVA) as mutually agreed between the Distribution Licensee and the consumer and as entered into agreement or agreed through other written communication. 2.3(aa)- “Demand Charge” for a billing period refers to a charge levied on the consumer based on the contracted/sanctioned load or maximum demand (reference to relevant sub-section of these Regulations), whichever is higher, and shall be calculated as per the procedure laid down in the Tariff Order approved by the Commission.” 12. There is no controversy on Minimum Charge payable to the Nigam. The point in dispute is with respect to contention of Demand Charge. The appellant has tried to built a case on the basis of a discussion under paragraph no. 5.4 of the 2004 Tariff Order which notices a distinction between 'Fixed Charge' and 'Minimum Charge'. The contention raised on behalf of the appellant that the Commission in paragraph no. 5.4 has observed that it has not changed the basis for levying Fixed Charge must be read in continuity and if it is read so, it has been made abundantly clear that the Fixed/Demand Charge should be levied in proportion to the “demand placed” by an individual consumer “on the system”. In paragraph no. 5.25 from where a discussion on HT Special Service (HTSS) consumer starts, the Regulatory Commission has noticed that the consumers with higher demand would pay more. Table 5.36 of the 2004 Tariff Order provides separate Tariff for Demand Charge, Energy Charge and Minimum Monthly Charge for HTSS consumers. The fact that the Electricity Board proposed the Demand Charge of Rs. 750/- as against the existing Demand Charge of Rs. 700/- per KVA per month for HTSS consumers would not make a distinction between HTS-I and HTSS consumers insofar as, the legality of raising Demand Charge on the basis of either the agreement executed with the consumer or on the basis of Clause-5 of the 1999 Tariff is concerned. 13. 750/- as against the existing Demand Charge of Rs. 700/- per KVA per month for HTSS consumers would not make a distinction between HTS-I and HTSS consumers insofar as, the legality of raising Demand Charge on the basis of either the agreement executed with the consumer or on the basis of Clause-5 of the 1999 Tariff is concerned. 13. After the decision in M/s Laxmi Business & Cement Co. Pvt. Ltd (supra) it must be construed in law that it is the 2004 Tariff Order alone which can be enforced for raising energy bills to the consumers. Moreover, once the whole dispute is viewed in the context of the foundational distinction as urged by the appellant-Urja Vikas Nigam Limited that the Induction Furnace consumers are special category of consumers who need constant supply of high load for the reason that supply of low voltage would cause irreparable loss to the Induction Furnace and thus, the consumer must be saddled with Demand Charge on the basis of 100% Contract Demand or the actual load whichever is higher, the whole dispute turns out to be 'Much ado about nothing'. If the requirement of an Induction Furnace is constant supply of high voltage and a consumer insists that he is required to pay Demand Charge on the basis of the highest load recorded in kilo-volt ampere (KVA) which was delivered to the consumer on the point of supply during any consecutive 30 minutes in the month, in all probability it would record 100% of the Contract Demand and if in any month the maximum recorded load was less than 100% of the Contract Demand, obviously it would be very negligible and this aspect has been taken care of by charging higher Demand Charge, as noticed by the Regulatory Commission in paragraph no.5.25 of the 2004 Tariff Order. The Court does not take cognizance of trivials. Moreover, at this distant point in time when the subsequent Tariff Order of 2010 has already been enforced, we would not reopen the issue on facts at this stage. 14. It needs to be mentioned here that the effect of Section 185 of the Electricity Act, 2003 has also been discussed in M/s Laxmi Business & Cement Co. Pvt. Ltd case and it has been held by the Hon'ble Supreme Court that the agreement executed with the consumer would stand replaced by the 2004 Tariff Order. 14. It needs to be mentioned here that the effect of Section 185 of the Electricity Act, 2003 has also been discussed in M/s Laxmi Business & Cement Co. Pvt. Ltd case and it has been held by the Hon'ble Supreme Court that the agreement executed with the consumer would stand replaced by the 2004 Tariff Order. The contention now raised that certain left over aspects in the 2004 Tariff Order can be taken care of by the appellant-Urja Vikas Nigam Limited is misconceived. In M/s Laxmi Business & Cement Co. Pvt. Ltd case, the Hon'ble Supreme Court has categorically held that, “It is, thus, beyond the pale of doubt that the State Electricity Boards have no power whatsoever to frame Tariff which is under the exclusive domain of the Commission”. 15. Viewed thus, we find no substance in the plea urged on behalf of the appellant-Urja Vikas Nigam Limited, hence we decline to interfere with the orders passed by the Writ Court. 16. Resultantly all the Letters Patent Appeals on hand merit dismissal. Ordered accordingly. Ordered accordingly.