Fertilizer Corporation of India Ltd. Talcher v. State of Orissa
2017-05-04
B.R.SARANGI
body2017
DigiLaw.ai
JUDGMENT : B.R. Sarangi, J. Fertilizer Corporation of India Limited, a public sector undertaking under the Union of India, established a unit at Talcher for production of fertilizer for use and consumption of farmers of Orissa. It has filed this application challenging the demand raised in the bills for the month of July, 1996 and August, 1996 for an amount of Rs.4,85,38,261.80 and Rs.4,86,82,963.10 respectively and consequential rejection of the application filed for reduction of contract demand of 56.6 MVA to 16 MVA vide letter dated 3.5.1997 in Annexure-7. 2. The factual matrix of the case in hand is that the Fertilizer Corporation of India Limited (hereinafter referred to as “FCIL”) entered with an agreement on 23.12.1976 (Annexure-1) with erstwhile Orissa State Electricity Board to supply power not exceeding maximum demand of 55,600 KVA for running the industry for production of fertilizer. As per the regulation and agreement, the General Manager of FCIL wrote a letter on 05.06.1996 (Annexure-3) to the Executive Engineer, with a copy to the Chief Engineer, GRIDCO, for reduction of contract demand of 16 MVA from 55.6 MVA for a period of two months w.e.f. 01.07.1996 to 31.08.1996 for maintenance of some vital equipments and also deposited Rs.1000/- towards processing fees along with the said letter. The Executive Engineer forwarded the same to the Superintendent Engineer for consideration of the case of the petitioner. When the application was pending for consideration by the competent authority, the Executive Engineer on 01.08.1996 and 02.09.1996 issued bills for the months of July, 1996 and August, 1996 to the tune of Rs.4,85,38,261.80 and 4,86,82,963.10 respectively. Hence, this application. 3. Mr. Ganeswar Rath, learned Senior Counsel appearing along with Mr. B.K. Nayak, learned counsel for the petitioner states that when the petitioner’s claimed for reduction of contract demand on account of repair of its major equipments, the demand raised for the months of July and August, 1996 on the basis of contract demand existed in the agreement, cannot sustain in the eye of law. It is contended that if the maximum demand recorded as 15.616 MVA and 38.920 MVA respectively during the month of July and August, 1996, in that case, the demand raised on the basis of contract demand of 55.6 MVA cannot sustain in the eye of law, when the application for reduction of contract demand from 55.6 MVA to 16 MVA is pending before the authority concerned.
It is further contended that for “break down” of the industry, the petitioner is not liable to pay on the basis of the contract demand as per the agreement. If it will be construed to be a “shut down” the petitioner may be liable for the said amount. It is also contended that as against the demand in respect of the bills for the months of July and August, 1996, if the reduction of contract demand is allowed, then the amount would be substantially reduced and the petitioner would not be liable to pay the amount as demanded. 4. Mr. B.K. Sahoo, learned counsel for opposite party nos.2 to 5 raised a specific contention that the petitioner is not entitled to get the relief, as sought for in the writ application, inasmuch as since there is billing dispute, the petitioner has to approach the appropriate forum, namely, Grievance Redressal Forum to ventilate its grievance. In that view of the matter, the writ application is not maintainable. It is further contended that as the petitioner has sought for reduction of contract demand from 55.6 MVA to 16 MVA, and the application filed for the purpose is pending consideration before the concerned authority, the benefit sought for is not admissible under the law. More so, the reason for asking reduction of contract demand, which is for maintenance work of certain machineries for a stipulated period of two months, is also not admissible under law. Therefore, the relief sought for cannot be granted and, as such, the demand raised, being well within the jurisdiction of the authority concerned, does not warrant any interference by this Court. 5. Heard Mr. Ganeswar Rath, learned Senior Counsel along with Mr. B.K. Nayak, learned counsel for the petitioner and Mr. B.K. Sahoo, learned counsel for opposite parties no.2 to 5, and perused the records. Pleadings between the parties having been exchanged, with the consent of learned counsel for the parties, this writ application is disposed of finally at the stage of admission. 6. The undisputed fact being that the petitioner applied for contract demand for a period of two months for maintenance of its machineries. The said application is pending before the authority concerned and no order has been passed with regard to reduction of contract demand. But, under law, the contract demand cannot be reduced for a specific period as claimed by the consumer.
The said application is pending before the authority concerned and no order has been passed with regard to reduction of contract demand. But, under law, the contract demand cannot be reduced for a specific period as claimed by the consumer. In exercise of powers conferred under Section 181 (2) (t) (v) (w) and (x) read with Part-VI of the Electricity Act, 2003, Orissa Electricity Reforms Act and all other powers enabling it in that behalf, the Orissa Electricity Regulatory Commission makes regulations to govern distribution and supply of electricity and procedures thereof such as the system of billing, modality of payment of bill, the powers, functions and obligations of the distribution licensees and/or suppliers and the rights and obligations of consumers called “Orissa Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 2004”. 7. Chapter-VI of Orissa Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 2004 (for short “Code, 2004”) deals with contract demand. Regulation-2 (l) defines contract demand, which states as follows: “Contract demand” means maximum KW or KVA or HP as the case may be, agreed to be supplied by the licensee and reflected in the agreement executed between the parties. Where the agreement stipulates supply in KVA, the quantum in terms of KW may be determined by multiplying the KVA with 0.9” For just and proper adjudication of the case, Regulations 64, 66, 67, 68 and 69 are reproduced below: “64. Contract demand for loads of 110 KVA and above shall be as stipulated in the agreement and may be different from the connected load. Contract demand for a connected load below 110 KVA shall be the same as the connected load. However in case of installation with static meter/meter with provision of recording demand, the recorded demand rounded to nearest 0.5 Kw shall be considered as the contract demand requiring no verification.” xx xx xx “66. Reduction of Contract Demand – (1) Every application for reduction of contract demand shall be made to the designated authority of the licensee. (2) Subject to Regulation 67 below no application for reduction in contract demand shall be entertained within three months from the date of commencement of initial or revised supply unless the agreement provides otherwise. 67.
Reduction of Contract Demand – (1) Every application for reduction of contract demand shall be made to the designated authority of the licensee. (2) Subject to Regulation 67 below no application for reduction in contract demand shall be entertained within three months from the date of commencement of initial or revised supply unless the agreement provides otherwise. 67. Contract demand above 20 KW shall not be allowed to be reduced more than once within a period of thirty-six months from the date of initial supply or from the date of last reduction. Contract demand of 20 KW and below shall not be allowed to be reduced more than once within a period of twelve months from the date of initial supply or from the date of last reduction. The designated authority of the licensee may for reasons to be recorded, allow such reduction more than once within the aforesaid period of thirty-six months or twelve months as applicable. 68. Every application for reduction of contract demand shall be accompanied by (1) such processing fees as may be notified by the licensee for the particular category of consumer, (2) test report from the licensed contractor where alteration of installation is involved, (3) meter reading of the previous three months, and (4) letter of approval of Electrical Inspector wherever applicable. 69. No permission shall be granted to reduce the contract demand if on a consideration of the investment made by the licensee for effecting power supply to the consumer, the reduction is likely to result in the investment becoming non-remunerative according to the norms fixed by the licensee with the approval of the Commission, unless the consumer is agreeable to bear the financial burden of making the investment viable due to such reduction.” 8. In view of the provisions contained in Regulation-66, power has been vested with the consumer to make an application for reduction of contract demand to the original authority of the licensee and, as such, contract demand above 20 KW shall not be allowed to be reduced more than once within a period of thirty-six months from the date of initial supply or from the date of last reduction. The designated authority of the licensee may for reasons to be recorded, allow such reduction more than once within the aforesaid period of thirty six months or twelve months as applicable.
The designated authority of the licensee may for reasons to be recorded, allow such reduction more than once within the aforesaid period of thirty six months or twelve months as applicable. As such, the regulation does not contemplate for reduction of contract demand for a period of two months for maintenance of heavy machineries of the petitioner. The reasons for non-allowing reduction of contract demand frequently is obvious because of the fact that on the basis of the agreement executed between the supplier and the consumer, much of power is kept reserved for reduction of contract demand for a specific period and that can only be allowed once within a period of thirty-six months. Therefore, as has been stated in the writ application and also argued by Mr. G. Rath, learned Senior Counsel for the petitioner, the reduction of contract demand for a period of two months only is not permissible under law. The consumer is bound by terms and agreement and also the regulation applicable to it from time to time. 9. In view of such position, if the petitioner will be permitted to reduce the contract demand at its own suit will, then it will be violative of the conditions stipulated in the agreement vis-à-vis the provisions of the Regulations applicable to it. Reduction of contract demand is not admissible frequently in view of the fact that the demand charges are payable because of the quantity of energy contracted has been reserved and/or kept ready to be supplied to the consumer as per his requirement, as and when required by the consumer during the continuance of the term of agreement. Therefore, even if during the disconnection period the petitioner is liable to pay the demand charges on the basis of the contract demand, reason being the computation of demand charges in an alternative method does not depend upon the consumption of energy. Therefore, the law is well settled by this Court as well as the apex Court time and again that the demand has to be raised on the basis of contract demand, even if power supply of the consumer has been disconnected for other reason.
Therefore, the law is well settled by this Court as well as the apex Court time and again that the demand has to be raised on the basis of contract demand, even if power supply of the consumer has been disconnected for other reason. Therefore, the reason for asking for reduction of contract demand for a period of two months, being for repair of heavy machineries, is not admissible and, as such, no billing can be done on the basis of actual consumption made during the said period on the presumption of reduction of contract demand as claimed in the writ petition. Rather, the demand has to be made on the basis of contract demand, as the power is made available for the consumer to utilize the same. But for some reason or other, if it cannot utilize the same, that ipso facto cannot disentitle the petitioner not to pay the demand raised by the authority concerned. 10. In view of the aforesaid facts and circumstances, the claim made by the petitioner in this writ application cannot sustain. Further, if the petitioner raises dispute with regard to billing, this Court has no jurisdiction to entertain the same, inasmuch as for billing dispute the writ application is not maintainable. However, if the petitioner so likes, it may approach the appropriate forum ventilating its grievance in accordance with law. Therefore, considering the case from both angles, factually as well as legally, this Court finds no merit in the writ application. 11. The writ application is thus dismissed. No order to cost.