Allowed

M/S Jaswant Nagar Cold Storage (Pvt.) Limited v. State of U.P. and 2 Others

Allahabad HC5 Feb 2021WRIC/3712/2021

Case brief

AI extract

What is this about?

Petitioner challenged an ex-parte final assessment order under Section 126 of the Electricity Act, 2003, passing without a hearing. The High Court set aside the order due to violation of principles of natural justice, holding it liable to be set aside and relegated the matter to the competent authority to proceed afresh with due procedure.

What did the court decide?

Impugned final assessment order dated 12.1.2021 set aside. Matter relegated to competent authority to pass fresh order strictly as per Section 126 within three months.

M/S Jaswant Nagar Cold Storage (Pvt.) Limited Vs… — Banking and Recovery | Allahabad HC (2021)

¶1

Court No. - 21

¶2

Case :- WRIT - C No. - 3712 of 2021 Petitioner :- M/S Jaswant Nagar Cold Storage (Pvt.) Limited Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Bidhan Chandra Rai Counsel for Respondent :- C.S.C.,Baleshwar Chaturvedi

¶3

Hon'ble Mahesh Chandra Tripathi,J. Hon'ble Sanjay Kumar Pachori,J.

¶4

Heard Shri Rahul Sripat, learned Senior Advocate assisted by Shri B.C. Rai for the petitioner; Shri Sanjay Kumar Singh, learned Additional Chief Standing Counsel for the State respondent no.1 and Ms. Usha Kiran, learned counsel for respondent nos.2 and 3.

¶5

M/S Jaswant Nagar Cold Storage (Pvt.) Limited, Kanpur is before this Court assailing the validity of the impugned exparte final assessment order dated 12.1.2021 passed by the respondent no.3/Executive Engineer, Electricity Distribution Division-III, Dakshinanchal Vidyut Vitran Nigam Limited, Saifai, Etawah, U.P. The request has also been made for issuing direction to the respondent no.3 to restore the electricity supply of the petitioner's cold storage forthwith and not to enforce in any manner ex-parte impugned assessment order dated 12.1.2021.

¶6

The facts in brief, as gathered from the record, are that M/S Jaswant Nagar Cold Storage (Pvt.) Limited, Kanpur is governed under the Companies Act, 2013. After commissioning of the Rooftop solar photovoltaic power plants, an agreement was entered on 30.5.2016 between the petitioner and Dikshinanchal Vidyut Vitran Nigam Ltd. for providing grid connectivity to the petitioner for injection of the electricity generated from its SPV plant of capacity 200 kilowatts into the power system of Licensee and as per conditions of the agreement and net-metering regulations/orders issued by the Uttar Pradesh Electricity Regulatory Commission. For the purpose of billing of electrical energy, a meter was installed in the meter room, which is locked by the respondent no.3. On 21.7.2020 a team of the respondent no.2 entered in the meter room and made inspection of the metering system, wherein it has been allegedly found that the seal of the meter cubical housing C.T./P.T. chamber was found tampered. After breaking CT, the checking team alleged that an electronic circuit was found in the C.T.. and the packed electronic

¶7

circuit was found in the CT/PT of the pole meter. The electricity supply was disconnected. Consequently, a complaint was lodged under Section 135 of the Electricity Act, 2003 to the local police station.

¶8

The petitioner brought the aforesaid facts to the notice of the respondent no.2 on 25.7.2020 requesting for an impartial investigation. Consequently, the respondent no.2 constituted an inspection team and directed them to submit a report. The checking team submitted its report on 25.7.2020 without testing of meter and CT and PT. The petitioner filed a detailed objection dated 26.7.2020 before the respondent no.3. Thereafter, a provisional assessment notice dated 23.7.2020 for Rs.3,35,54,110/- was served upon the petitioner on 27.7.2020, requiring the petitioner to file its objection within 15 days. The petitioner filed an application on 1.8.2020 before the Assessing Officer for providing a copy of the provisional assessment order. On 16.9.2020 the petitioner filed another application stating that the Cold Storage unit is a seasonal industry for nine months and for remaining three months from December, January and February, the cold storage are closed due to off season. The petitioner filed a detailed reply on 26.11.2020 denying the method of provisional assessment and the same was made on an exaggerated connected load. Without any notice or information or opportunity to the petitioner, the Assessing Officer/respondent no.3 has passed the impugned final assessment order/office memo dated 12.1.2021, wherein the petitioner is required to deposit a sum of Rs.3,35,54,110/- and compounding charges worth Rs.50 lakhs.

¶9

Ms. Usha Kiran, learned counsel for respondent nos.2 and 3. has raised a preliminary objection regarding maintainability of the present writ petition on the ground that against the impugned final order the petitioner has got efficacious alternative remedy to file an appeal under Section 127 of the Electricity Act, 2006 (in short, the Act) and as such, the writ petition is liable to be dismissed on the ground of alternative remedy.

¶10

Shri Rahul Sripat, learned Senior Advocate appearing for the petitioner submits that so far as the final assessment order under Section 126 of the Act is concerned, the same has been passed dehors the provisions contained under Section 126 of the Act, which mandates that before passing final assessment order the hearing is to be

¶11

accorded to the petitioner. In case the final assessment has been carried out contrary to the provisions contained in the Act, the alternative remedy is not absolute bar and the impugned assessment order cannot be sustained in the eye of law. In support of his submission, he has placed reliance on the order of this Court in Ashok Kumar and ors vs. State of UP and ors reported in (2008) 5 All LJ 383 (DB). The relevant part of the judgement is reproduced herein below:-

¶12

"57. The term "unauthorized use of electricity" is defined in explanation (b) to Section 126 which includes usage of electricity (i) by any artificial means; or (b) 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. Before issuing an assessment notice, therefore, the assessing officer must record its conclusion that the person concerned or any other person benefited has used electricity unauthorizedly in terms as defined in Explanation (b) of Section 126. The Act in respect to the stage of recording of conclusion by assessing officer regarding user of electricity by the person unauthorizedly does not provide specifically for any opportunity of hearing to the person concerned but also simultaneously does not prohibit the same. The allegation of unauthorised use of electricity by a person concerned, as defined in Explanation (b) also covers within its ambit certain acts/omission which constitute an offence under Section 135 of the Act, 2003. Therefore, it is a serious matter and no person can be indicted and held guilty of user of electricity unauthorizedly unless he is given an opportunity of hearing before coming to such conclusion. Where a person is held guilty of unauthorised user of electricity, besides making him responsible for paying penalty in the shape of assessment under the Act, 2003 it also causes stigma on his conduct. He is declared an anti-social person indulging in a serious unsocial activity, by causing loss to the society and country in general and electricity undertaking in particular. Such condemnation of a person would not be permissible on the mere vagaries of the authority i.e. assessing officer unless such a person is given a fair opportunity of hearing i.e. putting his defence before the said authority. This Court is clearly of the view that before making provisional assessment, the assessing officer, in law, is bound to afford an opportunity to the consumer or person concerned of the allegations of means and ways in which he is said to have unauthorizedly used electricity, and, should be given an opportunity of placing his defence. Thereafter the assessing officer shall record its conclusion with respect to unauthorised use of electricity, to confer upon himself the jurisdiction to issue provisional assessment notice. The object of opportunity at the two stages namely, before arriving at the conclusion of unauthorised use of electricity and before making final assessment are distinct. In the former, it is the very issue whether the consumer is guilty of unauthorised use of electricity or not and in later case it is the quantum of amount which

¶13

he is required to pay as a compensation and a fiscal preventive measure for committing such irregularity. The first one is the stage of finding the person guilty and later one is the stage of determining extent of monetary liability for compensating electrical undertaking qua the alleged unauthorised use of electricity by such persons. It is only when the proceedings are conducted in the above manner, the assessment made can be held valid and not otherwise.

¶14

It is true that judicial cognizance can/should be taken of the fact that theft of electricity has become a serious menace and a social evil not only in the State of U.P. but in the entire country. The electricity has become a necessity in the present day of society and development of society as well as nation cannot be conceived of without electricity. The availability of electricity however is much in deficiency. A huge amount of electricity, consumed by scrupulous persons is causing a serious loss to public revenue hampering and obstructing the development of electrical sector in particular as well as society and nation in general. Therefore, to check theft of electricity and/or unauthorized use of electricity, stern measures are required to be taken. The various provisions of Act, 2003 shows that the legislature is also concerned about it and has take several measures from time to time including making harsh provisions in the statute.

¶15

However, this by itself would not justify condemnation and indictment of a citizen or a consumer of electricity by holding him guilty of unauthorized use of electricity on the vagaries of the officers of electrical undertaking unless he is disclosed the manner in which he was found using electricity unauthorizedly on inspection by the officer concerned and given an opportunity to explain his case, if any. It is well settled law that no person can be indicted or condemned without giving a minimal opportunity of hearing. In the case of unauthorized use of electricity found by the assessing officer at any place or the premises etc. or otherwise, the same has to be disclosed to the person concerned giving him an opportunity to put his defence. The principles of natural justice unless excluded by express provision of the Act or by necessary implication cannot be said to be inapplicable when a citizen or person is being indicted of a serious charge, i.e., unauthorized use of electricity, which in some of the cases an offence under Section 135 of Act, 2003.

¶16

On behalf of the respondents it is argued that in case, such a view is taken, that would amount to delay of issuance of notices and proceedings and may hamper the very objectives of the Act i.e. prevention of theft/unauthorized use of electricity. We are not impressed with the said objection. It is permissible to an 'assessing officer' to cover both the aspects of the matter in the show cause notice, which he is required to issue under sub-section 3 of Section 126 of the Act. The conclusion with respect to unauthorized use of electricity is a condition precedent for issuing provisional assessment notice and, therefore, unless opportunity is given and a finding is recorded whether there is unauthorized use of electricity or not, the question of assessment would not arise. Obviously, no person can come to the conclusion of unauthorized use of electricity

¶17

suo motu without giving an opportunity to the person concerned and any other procedure would not only be violation of principles of nature justice but would also be arbitrary, infringing Article 14 of the Constitution of India. In order to read Section 126 (1) constitutionally valid, we have no hesitation in observing that before coming to any conclusion the assessing authority would give an opportunity to the person concerned to find out whether he is/was indulged in unauthorized use of electricity.

¶18

From the above discussion it is also evident that the procedure prescribed in para 6.8 of Code 2005, while issuing provisional assessment notice has not been followed at all. Before issuing a demand notice under Section 3 of 1958 Act, admittedly no final order of assessment as contemplated under para 6.8 (c) (i) and (ii) has been passed by the assessing officer. There is no averment in the counter affidavit that MRI report and its findings were made available to the consumers at the time of inspection or alongwith provisional assessment notice after discussing and substantiating the alleged irregularity as required in para 6.8 (a) (iv) and (v). Therefore, it cannot be said that a valid and proper assessment notice was issued to the petitioners which could have been replied by them effectively. The kind of notice issued to the petitioners mentions only that on 15.01.2008 departmental officers/ enforcement squad found excess load/ theft of energy/other irregularities and, therefore, as per Code, 2005 the assessment to the following effect is made and if they want to give any objection, may file the same within seven days, failing which recovery proceeding would be initiated. This is non compliance of para 6.8 of Code, 2005.

¶19

Para 6.8 (b) (i) also require assessing officer to give 15 working days time for submission of reply and sub-clause (ii) thereof shows that he shall also fix a date of hearing on which date the consumer shall be heard in person.

¶20

No such procedure has been followed by the assessing officer in the case in hand, therefore, the impugned provisional notices cannot be sustained being wholly illegal, contrary to the procedure prescribed in para 6.8 of Code, 2005 read with Section 126 of the Act, 2003.

¶21

In the result, these writ petitions are partly allowed. The impugned provisional/final assessment notices issued under Section 126 of the Electricity Act, 2003 as well as demand notice issued under Section 3 of the U.P. Government Electrical Undertaking (Dues Recovery) Act, 1958, impugned in these writ petition, are hereby quashed. However, the respondents shall be at liberty to take appropriate steps and pass fresh order in view of the observations made above and in accordance with law. The petitioners shall be entitled to cost which is quantified to Rs. 2000/- for each set of writ petition."

¶22

So far as the factual and legal aspect of the matter is concerned, the same is not disputed by Ms. Usha Kiran, learned counsel for the respondent nos.2 and 3.

¶23

We have also occasion to peruse the impugned order and find that at no point of time while passing the final assessment order any opportunity of hearing whatsoever has been extended to the petitioner. So far as the issue involved in the present matter is concerned, the same is no more res integra and as such, the impugned order cannot sustain and the same is liable to be set aside.

¶24

Consequently, the writ petition is allowed and the impugned order dated 12.1.2021 is set aside. The matter is relegated to the competent authority to proceed strictly as per provisions contained under Section 126 of the Act and finalize the same as expeditiously as possible and preferably within a period of three months from the date of receipt of a copy of the order.

¶25

It is made clear that we have not expressed any opinion on the merits of the case.

¶26

The party shall file computer generated copy of such order downloaded from the official website of High Court Allahabad, self attested by the applicants alongwith a self attested identity proof of the said person (preferably Aadhar Card) mentioning the mobile number to which the said Aadhar Card is linked.

¶27

The concerned Court/Authority/Official shall verify the authenticity of such computerized copy of the order from the official website of High Court Allahabad and shall make a declaration of such verification in writing.

¶28

Order Date :- 5.2.2021 RKP

M/S Jaswant Nagar Cold Storage (Pvt.) Limited v. State of U.P. and 2 Others

Case brief

What is this about?

What did the court decide?

M/S Jaswant Nagar Cold Storage (Pvt.) Limited v. State of U.P. and 2 Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Anand Kumar Singh Vs Nandani @ Gudiya

Saneep Chauhan Vs Seema Chauhan

Parshuram Nishad Vs Director, Women and Child Development and 4 Others

Gireesh Chandra Sahu Vs State of U.P. and 2 Others

Smt. Ishrat Jahan Vs Chief Executive Engineer, Vidyut Urban Distribution (Khant-First) Nigam Ltd. and Another

Shankar Kumar Vs State of U.P. and 2 Others